Main points of investment
2023H1 achieved an income of 1.369 billion yuan, in line with expectations 1) in the first half of the year, 2023H1 achieved an income of 1.369 billion yuan, an increase of 44% over the same period last year, a net profit of 185 million yuan, an increase of 30% over the same period last year, and a deduction of 192 million yuan for non-net profit, an increase of 58% over the same period last year. 2) in the second quarter alone, 2023Q2 achieved an income of 718 million yuan, an increase of 32% over the same period last year, a net profit of 95 million yuan, and a deduction of 104 million yuan for non-net profit, an increase of 28% over the same period last year. The steady growth in performance stems from the fact that crystal alcohol products such as sorbitol continue to be in short supply since the beginning of the year. According to the data of the General Administration of Customs, from January to June this year, China's sorbitol / xylitol exports totaled 61% and 20% respectively compared with the same period last year, and the transfer dividend of sugar substitute orders continues.
The gross profit margin has increased, and the level of fee control has remained stable.
In terms of gross profit margin, 2023Q2 achieved a gross profit margin of 24.0%, a sharp rise in 1.8pcts over the same period last year, mainly due to the optimization of product structure. In terms of expense rate, 2023Q2's sales expense rate is 1.6%, management expense rate is 2.5%, R & D expense rate is 5.6%, and year-on-year changes are all within 1pcts. In terms of net interest rate, 2023Q2's net interest rate decreased by 13.3% compared with the same period last year, mainly due to the increase in non-recurrent losses such as foreign exchange and non-current asset disposal losses. after excluding them, 2023Q2 deducted the non-net interest rate by about 14.5%, which was almost the same as the same period last year.
The convertible bond project has been examined and approved by the Shanghai Stock Exchange, and the new production capacity of Zhoushan is expected to be gradually landed next year. 1) long-distance Airlines wants to have a "boat": this month, the company's convertible bond project has been examined and approved by the Shanghai Stock Exchange. to provide a solid capital endorsement for the continuous landing of new production capacity in Zhoushan. Production capacity is one of the biggest development bottlenecks of the company at this stage. In 2022, the utilization rate of crystal sugar and alcohol capacity has exceeded 95%, which is close to saturation, so it is urgent to build new capacity. The convertible bond project is expected to increase production capacity by 1 million tons, covering high gross profit products such as sorbitol, maltol, resistant dextrin, aloxone sugar, etc., aimed at alleviating the pressure on the company's production capacity while further enriching the product structure and consolidating competitive advantage.
2) the thoroughfare of growth is as straight as a string: direct sales account for 90%, which is deeply bound to high-quality customers, and the production capacity of the new factory is expected to be digested quickly. The company is mainly direct selling mode all the year round, with nearly 50% of the top five customers (Mars Wrigley / Bufandi / Coca-Cola Company / Mondelez International Inc / NONGFU SPRING CO., LTD.) before 2022, and 90% of 23H1 direct sales revenue. After years of deep cultivation in the industry, the company has formed a deep binding to high-quality big customers. We are optimistic about the rapid digestion of production capacity and the rapid release of performance after the landing of the new factory.
Profit forecast and valuation
The company's main business is sugar substitute manufacturing. We estimate that in 2023-2025, the company's revenue will be RMB 2608Universe 30.10Mab 3.775 billion, an increase of 18.54% Universe 15.41% Universe 25.42%, and the estimated net profit of homing home is RMB 4.01 Universe 4.99Univer, with a year-on-year growth rate of 25.59%, 24.36%, 30.29%, corresponding to PE of 15-12-9. Considering that the sugar-free era in China has just arrived, the demand for sugar substitute is in the ascendant, combined with the company's broad prospects and certain competitiveness, to maintain the "buy" rating.
Risk tips: product price fluctuations, exchange rate fluctuations, shipping cost fluctuations, intensified market competition, approval progress is not up to expectations, etc.