Deeply involved in the functional sugar and biological fermentation industry, and revenue performance continues to increase
Bailong Chuangyuan is a leading domestic sugar biotechnology company. It is also one of the few enterprises with multi-variety large-scale production capabilities in the global industry. The company's upstream products are mainly prebiotics, dietary fiber, healthy sweeteners and other starch sugars (alcohols). The products are widely used in functional foods, baked goods, dairy products, infant formula, functional drinks, health products and other industries.
The company actively implemented the internationalization strategy, invested in the construction of a Thai production base project in 2023, deepened product and market development efforts with international customers, and continuously improved its production capacity and overseas market development capabilities. The company achieved revenue of 868 million yuan in 2023, an increase of 20.28% over the previous year; achieved net profit of 193 million yuan, an increase of 28.02% over the previous year; and realized deducted non-net profit of 176 million yuan, an increase of 24.56% over the previous year.
The dietary fiber series showed outstanding performance. Aloxone sugar is expected to continue to open up space, and the company's dietary fiber contribution continued to increase. In 2023, the company's dietary fiber series products achieved operating revenue of 444 million yuan, an increase of 31.08% over the previous year, contributing 51.15% of annual revenue, an increase of 4.22 PCT over the previous year. The company's dietary fiber series is mainly based on polydextrose and resistant dextrin. The company is the first company in China to obtain a license to produce resistant dextrin, and the first domestic company to prepare for the industrial production of allodonose. As demand for sugar reduction continues to rise, the rapid increase in demand for allodonose in overseas markets is driving high growth in the healthy sweetener sector. In 2023, the company's healthy sweetener series products achieved revenue of 137 million yuan, an increase of 44.91% over the previous year, contributing 15.81% of annual revenue, and a year-on-year increase of 2.69 PCT.
R&D investment maintains innovation momentum, and the control of three fees is reasonable
The company focuses on R&D and innovation, and has a rich variety of products. Currently, the company has launched high-end prebiotic products such as xylose oligosaccharide, galactose oligosaccharide, and stachose, as well as new healthy sweeteners, allodonose and isomalt based on the four major product patterns, and is developing other high-end products. In 2023, new products such as sugar-free resistant dextrins and high-DE-resistant dextrins were developed, leading the formulation of “resistant dextrin” industry standards, “D-allodonose” group standards, and leading the revision of various industry standards. At the same time, a subsidiary was set up in Qingdao to strengthen the international layout and the construction of high-end R&D personnel. The company's three-fee management is reasonable. In 2023, the company's sales expenses rate was 3.04%, down 0.35PCT year on year; the management fee ratio was 2.46%, down 0.39PCT year on year.
Overseas production bases in Thailand have been laid out, and the steady increase in production capacity has opened up growth space. In order to enhance international competitiveness, the company has laid out production bases in Thailand to further enhance international competitiveness. Thailand has an obvious raw material cost advantage. The company's main raw materials are sucrose, starch and starch deep-processed products. The price of corn starch in Thailand and the price of tapioca starch is 15% to 20% lower than the domestic price; the local price of other sugar ingredients is only about 70% of the domestic price. Furthermore, the Thai base can also effectively avoid tariffs imposed by the US on Chinese exports, further reducing company costs.
Investment advice
We expect net profit to be 2.72, 3.57, and 460 million yuan respectively in 2024-2026, with year-on-year growth rates of 41.1%, 31.0%, and 28.9%. The current stock price corresponds to PE of 27, 20, and 16 times, respectively. Covered for the first time, a “gain” rating was given.
Risk warning
(1) Project commissioning progress falls short of expectations;
(2) Product prices fluctuate greatly;
(3) the risk of force majeure of the device;
(4) Risk of changes in approval policies;