Report guide

The company released its semi-annual report in 2023, with revenue of 1.121 billion yuan, down 9.73% from the same period last year, net profit of 330 million yuan, down 17.77% from the same period last year, and net profit of 317 million yuan, down 12.97% from the same period last year.

Of this total, Q2 achieved revenue of 542 million yuan in a single quarter, down 14.61% from the same period last year and 6.17% from the previous year; the net profit from home was 221 million yuan, down 0.78% from the same period last year, and increased by 103.83%; and the net profit from non-return was 215 million yuan, up 6.33% from the same period last year and 110.88% from the previous year. The performance exceeded expectations.

Main points of investment

The price of raw materials fell, the price of VB1/VB6 stabilized and rebounded, and the company's Q2 gross profit margin increased by 11.29% month-on-month. PCT23H1's revenue from B vitamins / other vitamins / fine chemicals was 9.80 trillion yuan, respectively, and-10.56%, 27.21%, 190.56% respectively over the same period last year. Gross profit margins are 39.87% (year-on-year-4.10 PCT) / 11.51% (year-on-year-12.56 PCT) / 29.28% (year-on-year-21.97 PCT) respectively. In the first half of the year, the sales of the company's main vitamin products were stable, and the decline in revenue and net profit compared with the same period last year was mainly due to the drop in vitamin prices. According to Wande, the average price of VB1\ VB6, biotin and folic acid in the first half of the year was 111.02, 124.01 and 200.55 yuan / kg, respectively, with year-on-year changes of-28.6% and 7.3%, respectively. When product prices fell sharply, the company's B vitamin gross profit margin fell by only 4.10 PCT compared with the same period last year, mainly due to the fall in high commodity prices, driving down the cost of vitamin raw materials. According to Wande, the average prices of some raw materials phosphorus oxychloride, VB1 main raw materials GBL, acrylonitrile and acetonitrile 23H1 for VB1 are 5882 and 15108, respectively, and the average price is 10365 yuan / ton, with year-on-year changes of-36.2%, 56.1%, 15.6%, 48.9%, respectively. In the second quarter, the prices of VB1 and VB6 were + 4.2% and + 10.4% respectively, the prices of major vitamins stabilized and rebounded, the prices of superimposed raw materials went down, and the company's gross profit margin was gradually repaired. 23Q2 gross profit margin was 42.8% (month-on-month ratio + 11.29 PCT) and net profit rate was 40.81% (month-on-month ratio + 22.03PCT). The company's net interest rate rose significantly in the second quarter from the previous quarter, mainly due to the increase in exchange and financial income, which is expected to exceed 80 million. In the first half of the year, the net operating cash flow of the company was 401 million yuan, an increase of 61.77% over the same period last year.

DSM permanently withdrew from VB6 production, optimistic about the follow-up VB6 price upward on June 28, due to the internal adjustment of the industry, DSM announced the closure of Shanghai Spark Vitamin B6 factory and permanent withdrawal from B6 production. We believe that DSM's withdrawal may have a major impact on the VB6 industry pattern. At present, the price of VB6 is 147.5 yuan / kg, which is in the historical quantile of 9% in the past 10 years. We think that there is a lot of room for VB6 prices to go up in the future. Tianxin Pharmaceutical Co., Ltd. has a production capacity of 6500 tons of VB6 in 21 years, with a leading market share in the world. With the follow-up VB6 price, the company is expected to benefit greatly.

Projects under construction are progressing steadily, with new products and new production capacity opening up the company's growth space. 23H1 is under construction of 191 million yuan, a substantial increase of 55.53% over the end of 22. According to the company announcement, the pilot project of VB5, VA, cholesterol and 25-hydroxyvitamin D3 has been successfully carried out and gradually improved, and will enter the stage of large-scale production design and construction in the future. At present, the project progress of 1000 tons of VA and 7000 tons of VB5 is 8% and 15% respectively. With the gradual landing of the above projects, it is expected to further enrich the company's product categories and open up the company's growth space.

Profit forecast and valuation

It is estimated that the return net profit of the company in 23-25 is 6.35 million RMB, EPS 1.60 and PE 19.13, 17.40 and 13.29 respectively. The company is the leader of B vitamins, and the market share of existing products is leading the industry. in addition, the new production capacity of new products is gradually falling to the ground, further opening up the company's growth space and maintaining the "buy" rating.

Risk hint

The risk of vitamin price fluctuation; the release of new capacity is not as expected; the risk of raw material price fluctuation.