The company released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved revenue of 868 million yuan, +20.28% year on year, net profit of 193 million yuan, +27.98%; in the first quarter of 2024, the company achieved operating income of 255 million yuan, +29.63% year over year, and net profit to mother of 54 million yuan, +20.47% year over year. The performance was in line with expectations.
The company's dietary fiber business and healthy sweetener business are growing rapidly. By business, in 2023, the company's prebiotic series business achieved revenue of 257 million yuan, +4.49%; the company's dietary fiber series business achieved revenue of 444 million yuan, +31.08% year on year; and health sweetener series products achieved revenue of 137 million yuan, +44.91% year over year, mainly due to the rapid growth in demand for this product in overseas markets.
The company's new projects brought a new round of growth. According to the company's annual report, the company's “functional sugar drying project with an annual output of 20,000 tons” was fully put into operation during the reporting period. After completion, the project can produce 8,000 tons of fructooligosaccharide (powder), 5,000 tons of resistant dextrin (powder), and 7,000 tons of polydextrose products (powder), which is expected to increase annual revenue of 375 million yuan.
The “Project with an Annual Production of 30,000 Tons of Soluble Dietary Fiber” and the “Project with an Annual Production of 15,000 Tons of Crystalline Sugar” are expected to be successfully put into operation in May 2024.
New products are mass-produced and recognized by customers. The company focused on launching high-end products such as isomalt and stachose, and was recognized by customers, enriching the product structure and enhancing the company's overall competitiveness. During the reporting period, the company gradually achieved large-scale sales of isomalt and stachylose products, driving the company's revenue and performance to continue to grow.
Considering the commissioning of the company's 15,000 tons of alloxone sugar and 30,000 tons of dietary fiber projects, we forecast that the net profit of the company to the mother in 2024-2025 will be 302 million yuan and 386 million yuan, respectively, and introduced 483 million yuan in net profit to the mother in 2026. The corresponding EPS is 1.22, 1.55, and 1.94 yuan/share, respectively, and the corresponding PE is 21.64X, 16.95X, and 13.53X, respectively, maintaining a “buy” rating.
Risk warning
There is a risk of sharp fluctuations in raw materials, insufficient demand affects sales volume and product prices, and the launch of new projects falls short of expectations.