Event: the company released the 2023 medium report, the first half of the income achieved 290 million yuan,-22.6% year-on-year, to achieve a net profit of 46.18 million yuan, year-on-year-32.0%; of which single Q2 realized income of 160 million yuan, year-on-year-10.99%, realized return net profit of 25.59 million yuan, year-on-year-31.17%.
Main product capacity pressure drop, performance short-term pressure. According to the company's semi-annual report, the company's revenue and net profit fell in the first half of the year compared with the same period last year. From a sub-business point of view, the revenue of the natural spice business reached 95.17 million yuan, a decrease of 50.1% compared with the same period last year, mainly because the main products of the natural spice business, natural vanillin products, were affected by environmental protection policies, resulting in reduced production capacity, resulting in lower revenue. It is expected that the pressure will continue before the completion of the construction of the Thai base. The revenue of the synthetic spice business reached 47.63 million yuan, down 22.3% from the same period last year, mainly affected by the short-term decline in downstream demand, lower sales and lower revenue. It is expected that it will improve as the downstream demand improves. The revenue of the coolant reached 130 million yuan, an increase of 15.6% over the same period last year, mainly due to high downstream demand, increased product sales and increased revenue. It is expected that sales will continue to increase in the future and become the main source of revenue for the company.
Build a base in Thailand and open a new growth curve. The company plans to build a base in Thailand, including 1000 tons of vanillin, 200tons of oak moss, 100t of benzaldehyde, 50t of benzyl alcohol, 100t of methyl cinnamate, 150t of coolant and 150t of leaf alcohol. It is expected to be completed by the end of 2024. On the one hand, after the completion of the base, the production capacity of vanillin, the company's natural flavor products, will be greatly increased, and the impact of domestic production pressure drop will be weakened, opening up the space for revenue and profit growth. On the other hand, the Thai base has a tariff advantage. The United States currently accounts for the highest share of the company's overseas exports, accounting for more than 50% of the company's overseas revenue from 2016 to 2021. At present, there is an additional 25% tariff on goods exported to the United States, and the completion of the Thai base will help to increase the gross profit margin of the company's products exported to the United States and enhance the company's profitability.
The company has a wide range of spice products and stable customer cooperation. Founded in 2001, the company is a leading enterprise of high-end spices in China. The main products can be divided into natural spices, synthetic spices, coolants, etc., mainly used in food and beverage, daily chemical and other industries, the company's products have a wide range of downstream application fields and development space. The company's main end customers include well-known companies in the FMCG industry, downstream flavor enterprises and end customers. It has a relatively strict certification system for suppliers, a long inspection time, and will not be easily adjusted and replaced. the company has cooperated with large international flavor and flavor enterprises for many years, has a stable cooperative relationship and has product certification barriers.
Profit forecast and investment advice. It is estimated that the EPS from 2023 to 2025 will be 1.69,2.50,3.17yuan respectively, and the corresponding dynamic PE will be 20,14,11 times respectively. The company's products are widely used downstream, the demand is strong, and the overseas base is under construction. It is optimistic about the company's overseas business expansion and tariff advantages, giving the company 17 times PE in 24 years, with a target price of 42.50 yuan, covering it for the first time and giving it a "buy" rating.
Risk tips: downstream demand may be less than expected, raw material prices rise sharply, exchange rate fluctuations risk, capacity put in or less than expected.