A leader in the amino acid industry, synthetic biology is worth paying attention to. The company is a leading global amino acid company, with corn as the main raw material, and has an extensive downstream layout; at present, the company has formed a business structure centered on animal nutritional amino acids, flavoring products, and various superior products such as human medical amino acids and colloidal polysaccharides. Specific products include lysine, threonine, monosodium glutamate, xanthan gum, pharmaceutical amino acids, etc., with production capacity of lysine and monosodium glutamate each reaching one million tons. In the field of synthetic biology, after years of accumulation, the company has built a team for strain transformation, process optimization, and application development. It specializes in computer-aided strain design and amino acid production chassis cell genome editing, and seamlessly connects with the company's fermentation process and isolation and extraction laboratory to replace the production bacteria through selective iterative amplification. The rapid iteration of products and technology is a distinctive feature of the company's synthetic biology development.
The company's core management plans to increase its stock holdings by no less than 80 million yuan. A total of 35 members of the company's directors, supervisors, senior management and other core management plan to increase their total holdings of the company's shares by no less than RMB 80 million (including transaction fees) within six months from January 8, 2024 through methods permitted by the Shanghai Stock Exchange trading system (including but not limited to centralized bidding, bulk trading, etc.), with no price cap. This increase in holdings is 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, so it is planned to increase the company's stock holdings.
“Dividend+Repurchase” dual model. The company returns shareholders through “dividend+repurchase cancellation”. In terms of cash dividends, according to WIND, the total amount of the company's cash dividends in 2020-2022 was 926 million yuan, 1,217 million yuan, and 1,177 million yuan, respectively. In terms of repurchase and cancellation, the company's 2020-2022 share repurchase plan plans to cancel the share capital of 30.696 million shares, 26.0849 million shares, and 99.0393 million shares, respectively, using total own capital of 2004.805 million yuan (total repurchases of 34.222 million shares), 20020.15 million yuan, and 999.5 million yuan, respectively. On April 8, 2023, the board of directors of the company passed the latest round of share repurchase proposals. The total proposed repurchase capital is not less than 800 million yuan, not more than 1 billion yuan. By the end of December 2023, the company had repurchased approximately 63.596 million shares, with a total amount of approximately RMB 576.6452 million (not including transaction fees).
Profit forecast and valuation: We expect the company's net profit to be 35.22, 38.41, and 4.282 billion yuan in 2023-2025, respectively, with corresponding EPS of 1.20 yuan, 1.30 yuan, and 1.45 yuan respectively. Referring to companies in the same industry, we gave the company 10-12 times PE in 2024 (corresponding PB is 1.93-2.32 times), with a corresponding reasonable value range of 13.0-15.6 yuan, maintaining a “superior to market” rating.
Risk warning: Product prices have fallen, downstream demand has fallen short of expectations, and production capacity under construction has fallen short of expectations.