Performance summary: in 2021, the company's Q1 realized operating income of 400 million yuan, a decrease of 1.3% over the same period last year, and its mother's net profit was 25.379 million yuan, an increase of 35.4% over the same period last year. The main reason for the change in operating income is that the export volume of the company's biomedical related products decreased due to the epidemic situation of COVID-19 in overseas markets; the agricultural and animal husbandry sector developed smoothly with the increase of livestock and poultry stock, and the income of enzyme preparations and functional feed additives kept growing.
The company acquires 29% stake in Shiwei Technology to further promote the development of functional feed additive business and enhance the market competitiveness of anti-anti. On April 27, the two sides of the company transaction signed the Equity transfer Agreement on the acquisition of 29% equity in Changsha Shiwei Technology Co., Ltd., the overall price of the target company was 275 million yuan, and the total transaction price for the acquisition of 29% equity was 79.75 million yuan. after the completion of the transaction, the proportion of shares held by the company changed from 51% to 80%. The main products of Shiwei science and technology are plant-derived drug feed additives, that is, cordata extract and cordata powder products, master mature plant extraction technology, and have an excellent research team. Yidoli is the only Boluo scattered production and sales enterprise in China at present, and its product advantage is obvious. In order to ensure food safety and promote green breeding, feed production enterprises in China began to ban resistance in July 2020. The extract of Macleaya cordata has the functions of antibacterial, anti-inflammatory, appetizing and promoting growth. it can reduce the diarrhea rate of animals, increase the feed conversion rate, and has low toxicity, no drug resistance and no rest period. the company's feed additive income reached 200 million yuan in 2020, an increase of 72.7% over the same period last year, and is expected to maintain rapid growth in the future. The effective parts of Bopp total alkaloids and their preparations as Chinese veterinary drugs also have high development value in livestock and poultry feed. it can be made into veterinary natural drugs such as antibacterial, anti-inflammatory, liver and kidney protection, which is still in the stage of development. In addition to variety anti-antibiotic products, the company actively develops compound anti-drug products, such as Boyikang, which makes use of the synergistic effect between glucose oxidase and Boluohui powder to improve the efficiency of anti-replacement.
With high crop prices and higher feed prices, the company, as one of the largest suppliers of feed enzyme preparations, is expected to benefit from downstream demand growth in the future. 2020 in the company's revenue, the enzyme preparation accounts for 560 million yuan as a whole, and the enzyme preparation business takes the feed enzyme preparation as the core product, including phytase, xylanase and so on. The price of corn remains high. As of April 2021, the average spot price of corn in China has been maintained at about 2900 yuan per ton, which is much higher than the average level in previous years, while the price rise of corn as the main component of feed raw materials may affect the feed ratio. According to the increase in the proportion of wheat as feed brought about by the previous rise in corn prices, it is reasonably predicted that the proportion of wheat in feed will increase in the future, and the relevant work arrangements for feed formula adjustment are mentioned in the "alternative work Plan for Corn and Soybean meal reduction in Feed" issued by the Ministry of Agriculture and villages in March 21, we believe that the corresponding demand for digestive enzymes and xylanase may increase. And the company pays attention to research and development and product renewal, and will further open up the market of ruminant feed additives and aquatic feed enzymes in the future, expand market share, and upgrade existing products to improve production efficiency.
Profit forecast and investment advice. It is estimated that the EPS from 2021 to 2023 is 0.45,0.63 and 0.87 yuan respectively, and the corresponding PE is 22-15-11 times, maintaining the "buy" rating.
Risk hints: downstream demand for Macleaya falls short of expectations, sales of enzyme products fall short of expectations, market recovery of steroidal raw materials is not as expected, and so on.