Event: the company released the 2020 annual report, with a total revenue of 2.094 billion yuan, a decrease of 4.16% over the same period last year, a total profit of 1.389 billion yuan, a decrease of 3.89% over the same period last year, and a net profit of 1.18 billion yuan, down 4.45% from the same period last year. Based on the total share capital of 616 million shares, the company plans to distribute 16 yuan in cash (including tax) to all shareholders for every 10 shares. This time, the total cash dividend is 985 million yuan, and the corresponding cash dividend rate is 83.5%.
Under the influence of changes in downstream demand, profits declined slightly, and profitability remained at a high level during the reporting period. Under the background of the global epidemic, the company's revenue and profits declined slightly under the influence of changes in downstream market demand: the annual revenue was 2.094 billion yuan (- 4.16%), and the net profit was 1.18 billion yuan (- 4.45%). Among them, edible essence is still the company's core business. Contributed revenue of 1.911 billion yuan, accounting for 91.24% of revenue, down 3.46% from the same period last year. The second was the food ingredients business, which contributed 70 million yuan in revenue for the whole year, accounting for 3.32%, down 28.72% from the same period last year. Due to the increase in sales of new products and the opening up of new customers in North China, daily flavor realized revenue of 95 million yuan, accounting for 4.52% of revenue, an increase of 20.23% over the same period last year. In terms of profitability, the company's sales gross profit margin in 2020 was 76.44%, and the net sales profit rate was 57.30%, which remained within a relatively high level. Based on technological advantages, the company continued to maintain high profitability. In addition, the company has begun to pay continuous attention to the development trend and business opportunities of the new tobacco. While deepening the applied technology and product research in the field of heating and non-combustion, the company has also begun to achieve preliminary sales of tobacco products in the field of atomized e-cigarettes, with customers including Yueke, YOOZ and MYLE.
The cash dividend rate is 83.5%. The investor company plans to distribute 16 yuan of cash (including tax) to all shareholders for every 10 shares on the basis of 616 million shares of total share capital at the end of 2020. This time, the total cash dividend is 985 million yuan, and the corresponding cash dividend rate is 83.5%. Calculated according to the closing price on March 19, the dividend yield is 3.54%. The higher dividend ratio shows the company's business confidence and long-term investment value.
The company is expected to benefit from the upgrading of tobacco flavor and edible flavor consumption.
Consumption upgrading makes the demand for high-quality tobacco flavors more obvious, and high-end cigarettes put forward higher requirements for the quality and blending technology of tobacco flavors. companies that produce high-quality tobacco flavors and have their own patented technology will share the change dividends brought about by cigarette consumption upgrading and new tobacco demand. Benefiting from the barrier advantage of the flavor industry and the high gross profit margin of the tobacco industry, the gross profit margin and net profit margin have been maintained at a high level, with an average of about 76.6% and 54.3% respectively in the past five years, leading the profitability industry.
Profit forecast and investment suggestion
Based on the 20-year report, we fine-tune the company's revenue of 2.215, 23.81, and 25.67 million in 2021-2023 (24.94, 26.75 before 21 / 22), and net profit of 12.47, 13.24, 14.06 (2.322, 13.98) million, corresponding to a PE of 20.6, 19.4, 18.2 times, based on the company's leading advantage in the tobacco flavor industry and high gross profit margin. Maintain a "buy" rating.
Risk hint: development is not as expected, policy risk, fund-raising project construction is not as expected