Description of the event
In 2023, the company achieved revenue of 870 million yuan (+20.3% YoY), realized attributable net profit of 190 million yuan (+28.0% YoY), and realized non-net profit of 180 million yuan (+24.6% YoY). Among them, Q4 achieved revenue of 210 million yuan in a single quarter (+25.0% YoY, -11.0% YoY), realized net profit of 52 million yuan (+57.4% YoY, +2.8% YoY), and realized imputed non-net profit of 42 million yuan (+27.6% YoY, -12.9% YoY). With 2024Q1, the company achieved revenue of 250 million yuan (+29.6% YoY, +17.6% YoY), realized net profit of 54 million yuan (+20.5% YoY, +3.7% YoY), and realized non-net profit of 51 million yuan (+25.8% YoY, +21.4% YoY). In 2023, the company will pay a cash dividend of RMB 2.4 (tax included) for every 10 shares.
Incident comments
The dietary fiber sector grew significantly in 2023, and sales of healthy sweeteners continued to increase. In 2023, the company's dietary fiber series achieved operating revenue of 444 million yuan (+31.1% year over year), accounting for 52.0% of total revenue, and achieving a gross profit margin of 39.0% (+4.6pct year on year). Benefiting from the increased penetration rate of terminal dietary products, the company's sales of resistant dextrin and polydextrose continued to grow in food and beverage customers, and the dietary fiber series achieved sales volume of 42,600 tons (+58.3% over the same period last year). In 2023, the company's healthy sweetener series achieved operating revenue of 137 million yuan (+44.9% YoY), accounting for 16.1% of total revenue, and achieving a gross profit margin of 24.4% (-7.3pct year on year). The rapid increase in revenue from healthy sweeteners was mainly due to the rapid increase in demand for allodonose in overseas markets, and sales of healthy sweeteners achieved 6279 tons (+58.6% year over year). In 2023, the company's prebiotic series achieved operating revenue of 257 million yuan (+4.5% year over year), accounting for 30.1% of total revenue, achieving a gross profit margin of 28.9% (-2.5 pct year on year), and achieved sales volume of 21,600 tons (+24.5% year over year). In 2023, the company achieved a gross profit margin of 32.7% (+1.1 pct year on year) and a net profit margin of 22.2% (+1.3 pct year on year).
2024Q1 dietary fiber performed brilliantly. The 2024Q1 dietary fiber series achieved revenue of 135 million yuan (+32.9% YoY, +25.7% month-on-month), healthy sweeteners achieved revenue of 0.24 million yuan (YoY -34.9%, +14.6% month-on-month), and prebiotics achieved revenue of 73 million yuan (+55.4% YoY, -3.6% month-on-month). 2024Q1 achieved a gross profit margin of 33.8% (-3.6pct YoY, +4.6pct month-on-month) and a net profit margin of 21.2% (-1.6pct YoY, -2.8pct month-on-month).
New projects are about to be released and are expected to contribute to considerable growth. The company's “functional sugar drying project with an annual output of 20,000 tons” has been fully put into operation in 2023. 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), and is expected to increase annual revenue of 375 million yuan. The company's fund-raising project “Project with an Annual Output of 30,000 Tons of Soluble Dietary Fiber” and the “Project with an Annual Output of 15,000 Tons of Crystalline Sugar” invested and built with its own capital are progressing in an orderly manner according to the planned schedule, and it is expected that they will be successfully put into operation in May 2024. At the same time, the company announced in October 2023 that it plans to invest in the construction of a functional sugar production base project in Thailand, with an estimated investment amount of 450 million yuan. On the one hand, Thailand has a clear advantage in raw material costs, and the completion of the project is conducive to reducing the company's production costs. At the same time, the US, as the company's most important overseas market, still imposes high tariffs on some products, while the construction of the Thai production base and exports of related products to the US only levy basic tariffs. The company focuses on R&D investment, continuously develops new technologies and products, and achieved R&D investment of 32.559 million yuan (+20.4% year over year) in 2023.
The company is the world's leading food additive company. Under the concept of health, dietary fiber is popular; aloxone sugar substitutes are quickly used overseas. The estimated net profit for 24-26 will be $3.0, 42.54 billion, maintaining a “buy” rating.
Risk warning
1. Market competition or the risk of product substitution;
2. Risk of fluctuations in raw material prices