Main points of investment:
The world's largest biotin supplier: the company is mainly engaged in the research, development, production and sales of food and feed additives, including vitamin products such as biotin and folic acid, as well as biological antistaling agents such as nisin and natamycin.
The upstream industry of biotin and folic acid is fine chemical industry, while the downstream industry is mainly feed additive industry and food additive industry. The upstream industry of biotin and folic acid is fine chemical industry. the raw materials of biotin mainly include cyclic acid, right amine, potassium borohydride, potassium thioacetate, etc., and the raw materials of folic acid mainly include triamino salt, p-amino salt, trichloroacetone and so on. the downstream industries of biotin and folic acid are mainly feed additive industry and food additive industry. The main competitors in the field of biotin and folic acid are Shanghai Haijiano Pharmaceutical Development Co., Ltd., Zhejiang Xinhecheng Co., Ltd., Hangzhou Sinovac Biotech Chemical Co., Ltd., Zhejiang Pharmaceutical Co., Ltd., Changzhou Niutang Chemical Plant Co., Ltd.
The upstream industry of biological antistaling agent is fermentation raw material industry, and the downstream industry is food processing and manufacturing industry. The upstream industry of biological antistaling agent is fermentation raw material industry, which mainly includes yeast and yeast extract, white granulated sugar, glucose, edible salt and so on, while the downstream industry is food processing and manufacturing industry. The main competitors in the field of Streptococcus lactis and nataromycetes are Antai Bioengineering Co., Ltd., Zhengzhou Qihong Biotechnology Co., Ltd., Lukang Biochemistry Co., Ltd., and Shandong Freda Biotechnology Co., Ltd.; in the field of ε-polylysine hydrochloride, the main manufacturer is CHISSO of Japan.
The company is rich in production capacity, and the new capacity has been put into operation gradually since 19 years. In August 2017, the initial public offering of 20 million A-shares raised 301.8 million yuan. The actual funds raised are intended for "annual production of 200t biotin intermediate ketene and 300t folic acid", "annual production of 100t natamycin and 80t ε-polylysine hydrochloride", "Zhejiang Shengda Biological Enterprise Research Institute project" and "supplementary working capital" to promote the development of the company's main business. In September 2018, the company plans to publicly issue convertible corporate bonds to raise no more than 299.1368 million yuan to acquire a 75% stake in Tongliao Yellow River Dragon Biological Engineering Co., Ltd., and to build a project with an annual output of 1000 tons of nisin and an annual production of 2000 tons of sucrose fermentation.
Profit forecast and investment advice. We estimate that the 18-20-year net profit of the company is 65 million yuan, 85 million yuan and 107 million yuan respectively, and the corresponding EPS is 0.58,0.76 yuan and 0.95 yuan respectively. Considering that the company's new capacity has not yet been released, with the commissioning of the plant and the release of new capacity in the future, we believe that the company's profitability will be further improved, giving the 19-year 20-23 times the estimated value range, corresponding to the reasonable value range of 15.20-17.48 yuan. Give a "neutral" investment rating.
Risk hint. The price of vitamins fluctuated sharply; the market demand declined; and the production capacity was not as fast as expected.