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金禾实业(002597):为什么我们认为关税不会影响三氯蔗糖出口?

Jinhe Industrial (002597): Why do we think tariffs will not affect the export of sucralose?

zheshang securities ·  Nov 11

Key investment points

Introduction: China's actual export exposure to the US is small, and the US is less likely to impose tariffs.

Hot question 1: How open are China's exports of sucralose to the US?

We believe that direct exports are 30% open to the US, and developed regions account for 60% of exports. The United States is the largest demand country for China's sucralose exports. In the first three quarters of 24, the share of exports to the US reached 34%. Europe and Asia imported about 20% and 24% of sucralose respectively. Consumption mainly comes from developed countries, contributing about 60% of imports. Sucralose exports maintained a high growth rate. The CAGR reached 20% in 2017-2023, and the consumption growth rate in Asia increased significantly. The CAGR reached 31% in 2017-2023.

Hot question 2: What is the structure of sucralose consumption in the US?

We believe that there are many sucralose re-export businesses in the US, and the Taylor factory can basically meet US demand. The CAGR of US apparent consumption in 2017-2024 is expected to be 5%. Although the US imports large amounts of sucralose from China every year, it also has large-scale re-export trade operations and a trade surplus. Structurally, the US sucralose export structure is basically similar to China; America, Europe, and Asia are the core sources of demand. Tailai has a sucralose production plant in the US. According to our estimates, the tax-free price and cost of Taylor's sucralose in '23 was about 0.506 million yuan/ton and 380,000 yuan/ton, which is double the current domestic product price (0.24 million yuan/ton). The apparent consumption of sucralose in the US is expected to reach 4241 tons in 24, and the CAGR in 2017-2024 is 5%.

Hot question 3: How much impact will the imposition of tariffs by the US have on China's exports of sucralose?

We believe that China's terminal export exposure to sucralose to the US is small, and the US is less likely to impose tariffs on sucralose. According to our estimates, US terminal demand exposure to China was about 14% in '23, falling to 6% in the first three quarters of '24. If the US imposes tariffs on China, it may affect China's exports of sucralose to the US in the short term, but the impact on actual terminal demand is limited. In the long run, it will help domestic companies bypass US traders and directly obtain high-priced overseas demand. Furthermore, the purpose of the US imposing tariffs is to promote the return of the manufacturing industry. In the case where the price and cost of Taylor's sucralose products are far higher than those of Chinese products, it is less likely that Taylor will expand production. Even if 70% tariffs are imposed, Chinese products still have a price advantage over Taylor, and the additional tariffs imposed by the US are not conducive to the domestic sucralose trade business. We believe that the US is less likely to impose tariffs on sucralose.

Profit forecasting and valuation: The company is a scarce target with a high-quality track and industrial chain integration. Demand for sweetener products is growing at a high rate, and the boom is expected to be maintained after price increases. Dingyuan Phase II builds a platform-based business extension. It is optimistic that the company will grow into an industry leader by integrating the industrial chain into a new segment circuit, and the performance center is expected to improve. Due to the large drop in the price of sucralose in the first three quarters, which had a big impact on the company's profit, we lowered our 24-year profit forecast. The net profit for 2024-2026 is 0.644/1.377/1.515 billion yuan. The current stock price corresponds to PE 22.13/10.34/9.40 times, maintaining a “buy” rating.

Risk warning: Continued price increases for key products fall short of expectations, and overseas demand has declined sharply.

The translation is provided by third-party software.


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