Recommendation logic: the downstream demand of feed enzyme preparation and anti-antibody products is increased, and the performance is expected to increase. The price of corn is at a high level of about 2750 yuan / ton, or the ratio of feed end will be changed, the proportion of wheat as feed consumption will increase, and the corresponding demand for endogenous digestive enzymes and non-starch polysaccharides will increase. The "forbidden resistance" policy makes farmers choose alternative anti-products in order to ensure culture efficiency, and the company, as a supplier of macleaya extract and macleaya powder, will have considerable market demand in the future. The downstream aquaculture industry is improving as a whole, pig farming has gradually returned to the normal level, the prosperity of poultry breeding is at a high level, and the demand is generally upward.
As one of the largest suppliers of feed enzyme preparations, the company is expected to benefit from increased downstream demand in the future. In 2019, the company achieved business income of 2.05 billion yuan, of which enzyme preparation accounted for 510 million yuan as a whole, and feed enzyme preparation was the core product in the enzyme preparation business, including phytase, xylanase, etc., the price of corn remained high. By the beginning of March 2021, the average spot price of corn in China reached 2781 yuan per ton, much higher than the average level of previous years. The price rise of corn as the main component of feed raw materials may affect the feed ratio, according to the increase in the proportion of wheat as feed brought about by the previous rise in corn prices, it is reasonably predicted that the proportion of wheat in feed will increase in the future, the demand for corresponding digestive enzymes and xylanase may increase, and the performance of the corresponding companies will also usher in growth. And the company pays attention to research and development and product renewal, in the future will further open up ruminant feed additives, aquatic feed enzyme market, expand market share, while upgrading existing products to improve production efficiency.
At present, Yidoli is the only production and sales enterprise in China, which is highly competitive in the market. In order to ensure food safety and promote green breeding, feed production enterprises in China began to ban resistance in July 2020.
The company acquired Shiwei Technology in 2018 to lay out the market after the "prohibited resistance" work. Cortex cordata extract has the functions of antibacterial, anti-inflammatory, appetizer and growth promotion, can reduce animal diarrhea rate and increase feed conversion rate, and has low toxicity, no drug resistance and no drug withdrawal period. as of 2020H1 replacement income reached 60 million, an increase of 45% compared with the same period last year, the growth rate is expected to be faster in the future. The effective parts of Bopp total alkaloids and their preparations as Chinese veterinary drugs also have high development value in livestock and poultry feed. it can be made into veterinary natural drugs such as antibacterial, anti-inflammatory, liver and kidney protection, which is still in the stage of development. In addition to variety anti-antibiotic products, the company actively develops compound anti-drug products, such as Boyikang, which makes use of the synergistic effect between glucose oxidase and Boluohui powder to improve the efficiency of anti-replacement.
Profit forecast and investment advice. It is estimated that the EPS from 2020 to 2022 is 0.34,0.45,0.68 yuan respectively, and the corresponding dynamic PE is twice as much as that in 27-21-14. With reference to the industry average PE of 25 times in the same industry in 2021, taking into account the company's leading position in the industry and mature operation mode, reasonable premium, 30 times PE, first coverage, "buy" rating, target price 13.50 yuan.
Risk hints: downstream demand for Macleaya falls short of expectations, sales of enzyme products fall short of expectations, and the market for steroidal raw materials recovers less than expected.