Incidents:
On January 8, 2024, the company issued an announcement. A total of 35 members of the company's directors, supervisors and other core management plan to increase their holdings of the company's shares within six months from January 8, 2024, to increase their total holdings of the company's shares by no less than 80 million yuan (including transaction fees).
The increase in the company's shares by executives shows confidence in medium- to long-term development
This increase in holdings is mainly based on the company's established core competitiveness in the field of synthetic biology and expectations for the broad development prospects of the industry. The company's management is confident in the company's intrinsic value and future development potential, and has the ability to continuously create value for investors. There is no price limit for the current holdings increase plan, and the shares of the company holding the increased holdings will not be reduced during the implementation of the plan and within 5 years after the increase in holdings is completed.
Actively pay dividends, maintain high dividends and high dividend rates for a long time
Since the restructuring and listing in 2010 (with the exception of 2011), the company has been giving back to shareholders with high dividend rates and dividend rates. The average dividend rate and dividend ratio for 2011-2022 reached 4.0% and 69.9%, respectively. Since listing, the company's cumulative dividend amount has reached 9.15 billion yuan, with a cumulative dividend rate of 50.3%; in the past five years (18-22), the cumulative cash dividend reached 5.14 billion yuan, with a cumulative dividend rate of 52.5%, and an average dividend rate of 5.85%.
Large repurchases demonstrate confidence in long-term development
In addition to high dividends, based on confidence in the company's long-term development and maintaining the company's value, the company has launched several share repurchase programs over the past 19 years. The latest repurchase plan was announced on April 29, 2023. It is proposed to use the repurchase price of no more than 12 yuan/share, the total repurchase amount not less than RMB 800 million, and no more than RMB 1 billion. The repurchase period is 12 months, and the repurchase of shares will be used to cancel the registered capital.
Moreover, in the past three years, the company has introduced shareholding plans for employees, including directors, supervisors, and core members, covering a wide range of personnel, demonstrating the management's confidence in the company's long-term development.
Profit Forecasts, Valuations, and Ratings
We expect the company's revenue for 2023-25 to be 279/309/32.4 billion yuan, with year-on-year growth rates of 0%/11%/5%, and net profit to mother of 35/45/4.9 billion yuan respectively, year-on-year growth rates of -21%/28%/9%, EPS 1.2/1.5/1.7 yuan/share, respectively, and a 3-year CAGR of 4%. In view of the high concentration of the company's main business and improved prosperity, and deep cultivation of synthetic biology to open up room for growth, we maintained the company's target price of 15.52 yuan and maintained a “buy” rating.
Risk warning: Prices of su/lysine and corn/coal fluctuate greatly, potential competitors enter, and progress in the field of synthetic biology falls short of expectations