1. Cofco science and technology: the domestic corn intensive processing leader, "carbon neutralization" layout takes the lead in the company's main corn intensive processing, developed from the corn processing division of Cofco Group, and the actual controller is SASAC.
At present, the assets have been integrated in 2018, the overall total revenue has maintained a steady upward trend, and the return net profit has increased rapidly in the past three years.
2. Core business: "carbon neutralization" trillion market size, what is the potential of the company's bio-based products?
"carbon neutralization" will lead to systematic economic and social reform in China. To achieve the goal of reaching carbon peak by 2030 and carbon neutralization by 2060 as scheduled, the company's main products can contribute to the reduction of carbon emissions in the field of transportation fuels and new materials substitution:
1) Bio-based fuel-fuel ethanol: the company is currently the largest alcohol production enterprise in China, improving profitability through technological diversification, flexible production and continuous optimization of costs from multiple sources of raw material procurement, and the price benefits from rising oil prices. Under the background of the rise in the price of corn raw materials, the profit space has increased steadily. The company benefits from a shift in industry policies to increase market share, while business performance is expected to continue to benefit from carbon-neutral society's growing demand for renewable energy.
2) Bio-based raw material-starch: corn starch is the raw material of many kinds of bio-based products. The company is the domestic starch production leader, the output market share ranks third, its starch sugar-based corn processing products benefit from the rising price of corn. The company is the leading producer of starch sugar in China (among them, the production and sales of fructose syrup is the leading in China), and the operating rate maintains the leading level in the industry. By accelerating the conversion of commercial starch to self-use starch, the company optimizes the structure of downstream starch products and increases high value-added products to improve revenue and profitability; 3) Bio-based material-polylactic acid (PLA): it is a completely degradable bio-based material with a wide range of applications, and carbon dioxide emissions can be reduced by 60% compared with ordinary plastics. Due to the plastic restriction efforts to strengthen the superposition of "carbon neutralization" era is coming, the industry has entered a period of rapid development. At the right time for the rapid construction of domestic production capacity, the difficulty is that the key material lactide mainly depends on imports. The company is one of the first enterprises in China to master lactide technology, the company's polylactic acid raw material polymerization production line has been successfully tested, products are in short supply, and the 10,000-ton lactide project is advancing steadily. The company is expected to take the lead in becoming the leading enterprise of polylactic acid in China.
3. Competitive advantage: complete industrial chain layout + strong R & D power + low cost = all-dimensional energy development company has a complete layout in the corn intensive and deep processing industry; it has the ability of R & D and innovation, reserves a number of patents, and has won awards at all levels. It is the technology leader in the industry, and has a great cost advantage in raw material acquisition, production, transportation, sales and other links.
Profit Forecast & Investment suggestion: we expect that from 2020 to 2022, the company will achieve revenue of 232.39 / 271.93 / 28.839 billion yuan and net profit of 6.03 soybean 11.10 / 1.57 billion yuan, corresponding to 0.32 EPS 0.59 plus 0.84 yuan per share. We are optimistic that the company, as the leader of corn deep processing, will benefit from the rising price of corn, while fuel ethanol, starch, polylactic acid and other bio-based products are expected to make great achievements in the "carbon neutralization" era, using segment valuation method to give the 2021 30 times the target price of PE, 17.70RMB, maintaining the "buy" rating.
Risk tips: raw grain / crude oil price fluctuation risk, epidemic uncertainty, project progress is not as expected
