occurrences

[24H1] The company achieved operating income of 7.17 billion yuan (+6.9%); realized net profit of 0.69 billion yuan (+3.2%); realized net profit of 0.6 billion yuan (-2.5%) without deduction to mother.

[24Q2] The company achieved operating income of 3.69 billion yuan (+11.3%); realized net profit to mother of 0.37 billion yuan (+17.3%); realized deducted non-net profit of 0.3 billion yuan (+7.3%).

Key points of investment

24Q2 trade sugar accelerated. The revenue growth rate of the main business improved as scheduled. Looking at products, 24H1 yeast and deep-processed products/sugar products/packaging products/others each achieved revenue of 51.2/0.59/0.2/1.24 billion yuan, +8.8%/-26.5%/-12.8%/+30.8% compared to the same period; 24Q2 yeast and deep-processed products/sugar products/packaged products/others achieved revenue of 26.7/0.19/0.1/0.71 billion yuan, or +12.2% /- 40.1%/-17.1%/+46.4%;

By region, 24H1 domestic/overseas achieved sales of 4.31/2.82 billion yuan, or +17.9% year-on-year; 24Q2 domestic/foreign sales reached 2.21/1.45 billion yuan respectively, or +6.6%/+19.0% year-on-year.

24Q2 Net interest rate improved month-on-month, and expense ratio improved month-on-month

24H1 gross profit margin 24.3% (-0.3pct), net profit margin 9.9% (-0.5pct). Sales expense ratio 5.2% (+0.1pct); management expense ratio 3.4% (flat); R&D expense ratio 4.1% (-0.1pct); financial expense ratio 0.2% (+0.4pct).

24Q2 gross profit margin 23.9% (+0.3pct), net profit margin 10.3% (+0.4pct). Sales expenses rate 5.5% (+0.6pct); management expenses rate 3.1% (-0.3pct); R&D expenses rate 4.1% (-0.6pct); financial expenses ratio -0.1% (+0.6pct).

Diversified layouts are poised to be launched, and overseas is expected to drive growth

As the world's largest YE supplier and second-largest yeast supplier, the company actively explores overseas markets and lays out production capacity expansion and future plans while maintaining a leading domestic competitive position. Factories in Egypt and Russia are expected to enjoy the advantages of low-cost local raw materials after being put into operation in 24, further enhancing international competitiveness. The company also plans to invest and set up a factory in Southeast Asia, and future overseas growth will be prominent.

Profit forecasting and valuation

Revenue for 2024-2026 is estimated to be 156.1, 17.89, and 20.45 billion yuan, respectively, up 14.9%, 14.6%, and 14.3%; net profit to mother will be 1.35, 1.58, and 1.83 billion yuan, respectively, up 6.4%, 16.6%, and 16.4%; maintaining the increase rating.

Risk warning: raw material prices rise, exchange rate fluctuations, overseas market development is blocked