Event: according to Zhuochuang information, supported by the shortage of supply, the price of erythritol continued to rise after the festival. At present, individual major manufacturers have quoted prices as high as 36000 yuan / ton, an increase of 80% over the price on February 19 after the festival.
The demand continues to grow to enlarge the capacity gap, and the price of erythritol is expected to continue to run high. 1) from the demand side, the concept of sugar reduction among domestic consumers is constantly strengthened, and healthy and natural sweeteners are loved. Erythritol, as the only product produced by fermentation among functional sugar alcohols, has attracted much attention from the market driven by Yuanqi Forest. Many food and beverage companies have also launched sugar-free beverages with erythritol, such as Coca-Cola's "AHEMHA!" Bubble water ", Yili launched" Amushi AMX small black diamond yoghurt "and so on, driving the continuous growth of downstream demand. 2) from the supply side, there are about 4-5 manufacturers of erythritol with production scale in China by 2021, with a total design capacity of about 100000 tons, and the release of some capacity is limited, resulting in a situation that the market as a whole is in short supply. 3) in the short term, considering that the current market supply falls short of demand, the price of erythritol is expected to remain high and strong. Considering the price increase cycle, the company's performance is expected to improve significantly from the second quarter.
With the general trend of reducing sugar and reducing sugar, erythritol has great market potential.
Erythritol is the only sugar alcohol product prepared by natural transformation and extraction by biological fermentation in the market, and it is a 0-energy sugar alcohol product recognized by the National Health and Family Planning Commission. Driven by the global trend of low sugar and sugar reduction, and the influence of the hot sale of sugar-free and low-sugar drinks represented by Yuanqi Forest in China, with the characteristics of natural, zero calorific value, non-participation in blood sugar metabolism, high tolerance and stable acid-heat performance, the company has been highly concerned by the market, and product sales have maintained rapid growth for many years. In addition to its application in beverages, erythritol can also be widely used in sugary foods and daily chemical products, and even replace white sugar into the field of household consumption. Under the general trend of sugar reduction, assuming that erythritol will replace 5% of white sugar market in the future, then the potential domestic demand space is expected to reach 800000 tons.
The company has outstanding competitive advantages and is expected to fully benefit from the general trend of reducing sugar.
As a leader in the functional sugar industry, we believe that the company's core advantages come from three aspects: 1) R & D and innovation advantages:
The company has independent intellectual property rights of key technologies of functional sugar, and has participated in the formulation of more than 20 industry standards and 1 international standard, and has mastered the voice of the industry. 2) the advantage of the whole industry chain: the company is the only full-category functional sugar product manufacturing service provider in the domestic market, which can provide customers with rich comprehensive solutions. 3) Brand and market advantages: over the years, the company has continuously strengthened the ability of key customer marketing and program marketing, docking with customer implementation plans and collaborative innovation. As the company's production capacity continues to expand, based on the company's competitive advantage, we believe that the company is expected to fully benefit from the general trend of reducing sugar in the future.
Profit Forecast and Investment suggestion
We adjust the company's profit forecast according to the performance forecast and product price. It is estimated that from 2020 to 2022, the company's parent net profit will be RMB 215,290 million (the previous value is 1.02pm). The), EPS is 0.58 won respectively, and the corresponding PE is 0.78 times that of 70-20-15, maintaining the "Buy" rating.
Risk tips: the risk of falling prices due to the release of a large amount of production capacity; the risk that the company's capacity expansion is not as expected; the risk of rising raw material prices.