Event: the company issued a forecast of KuaiBao's results in 2020 and the first quarter of 2021. In 2020, the company achieved a total revenue of 19.909 billion yuan, an increase of 2.25 percent over the same period last year; the net profit belonging to shareholders of listed companies was 593 million yuan, an increase of 0.05 percent over the same period last year; and the net profit attributed to shareholders of listed companies is expected to reach 3.3 to 380 million yuan in the first quarter of 2021, an increase of 228 percent to 277 percent.
Profitability will continue to improve steadily under the special background in 2020.
In the face of the plunging price of crude oil at the beginning of 2020, the continuous price rise of corn raw materials, and the background of superimposed epidemic situation, the company significantly reduced the production cost by making 1) the production cost was significantly reduced: relying on the enterprise's own storage and drying capacity, establishing raw material inventory in the low-price period, and through the diversification of processing raw materials, achieved a significant reduction in production costs; 2) continuous optimization of sales capacity: continuously broaden market channels, optimize customer structure, and increase product sales prices. 3) continuous upgrading of profit model: continue to practice the "bulk + special" business model, promote product structure upgrading through scientific and technological research and development, significantly increase sales of high value-added products, and continuously reduce production costs through technological progress. 4) Multi-dimensional improvement of internal efficiency: continuous optimization of internal management, continuous improvement of labor efficiency, obvious reduction of various expenses, and other ways to improve the sustainable profitability, it has been able to increase in revenue, profits and other aspects compared with the same period. In 2020, the company achieved a total profit of 802 million, an increase of 20.35% over the same period last year, and the net profit attributed to the parent company was 593 million yuan, a slight increase of 0.05% over the same period last year.
21Q1 benefited from the rising prices of downstream products, and the performance improved significantly compared with the same period last year.
In the first quarter of 2021, the company's homing net profit is expected to increase significantly compared with the same period last year, mainly due to 1) benefiting from the sharp increases in crude oil prices and corn prices since 2020, the prices of fuel ethanol, starch and starch sugar-based corn products have increased significantly compared with the same period. 2) in order to smooth the risk of corn price increase, the company continues to maintain the diversification of raw materials, accurately predict the changes in the raw material market, broaden the procurement channels, and establish a large number of low-cost raw material inventory, so that the profit margin will not be squeezed by the rising price of raw materials; 3) at the same time, the company will continue to strengthen the daily management of the enterprise and reduce the cost of each link.
The company is the leader in the production of polylactic acid in China, and the lactide project has been promoting polylactic acid (PLA) as a fully degradable bio-based material since 2020, with a wide range of applications, and carbon dioxide emissions can be reduced by 60% compared with ordinary plastics. Benefit from plastic restrictions and then 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.
Profit Forecast-Investment suggestion: we expect that from 2021 to 2022, the company will achieve revenue of 271.9328839 billion yuan and net profit of 11.10 / 1.57 billion yuan, corresponding to EPS 0.59 soybean 0.84 yuan per share.
We are optimistic that the company, as the leader in deep processing of corn, 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 neutral" era and maintain the "buy" rating. Risk hint: raw grain / crude oil price fluctuation risk, epidemic uncertainty, project progress is not as expected, KuaiBao is the preliminary accounting data, please refer to the annual report
