Event 1: the company released the annual report for 2020 and the quarterly report for 2021. The operating income in 2020 was 1.915 billion yuan, down 6.51% from the same period last year. The net profit returned to the mother was 162 million yuan, up 26.81% from the same period last year. The operating income in the first quarter of 2021 was 397 million yuan, down 1.27% from the same period last year. The net profit returned to the mother was 25.3791 million yuan, an increase of 35.38% over the same period last year.
Event 2: the company acquired 29% stake in subsidiary Shiwei Technology, while Professor Zeng Jianguo, founder of Shiwei Technology, will buy Yidoli shares with a market value of no less than 20 million yuan through the secondary market and voluntarily promise to lock it up for 12 months.
The prospective layout has yielded results, and the replacement business is expected to continue to grow at a high speed. With the implementation of the policy in 2020, the company's functional feed additives dominated by anti-feed additives have made great growth. In 2020, the company's revenue of functional feed additives reached nearly 200 million yuan, an increase of 72.7% over the same period last year, and the gross profit margin increased to 63.5%. The subsidiary company Shiwei science and technology main products Boluo Hui extract and Boluo Hui San have both obtained national new veterinary drug certificates, among which, Boluo Hui San is the first patented product of natural plant medicine feed additive that can be added and used for a long time. In 2020, the subsidiary company Shiwei Science and Technology achieved revenue of 150 million yuan and net profit of 40 million yuan. After the completion of the acquisition, the proportion of the company holding Shiwei Technology will be increased to 80%, further improving the strategic layout of the company's business and enhancing profitability at the same time.
Rapid growth in the first quarter, replacing anti-business as a new growth engine
Although the export volume of 21Q1's API business has declined due to the impact of foreign epidemics, with the increase in the size of domestic livestock and poultry stocks, the company's revenue from biological enzymes and functional feed additives continues to grow, leading to a 35% year-on-year increase in net profit in the first quarter compared with the same period last year. At the same time, with the increase in the proportion of high gross margin business, the company's gross margin and net interest rate continue to improve. 21Q1's gross profit margin is 42.5%, year-on-year + 6.5pct, homing net profit rate is 6.4%, year-on-year + 1.7pct.
We believe that with the implementation of the national "resistance" breeding and the continuous recovery of downstream stocks, the company's feed enzyme and replacement business is expected to maintain rapid growth, leading to a sustained release of performance.
Development is supported by R & D and innovation, and new business opens up room for growth.
The company focuses on biotechnology R & D and innovation, and has formed three series of products around the two major application fields of biomedicine and biological agriculture and animal husbandry. In the face of the new market opportunities brought about by the total ban on feed in China, the company is expected to become a domestic leader in functional feed additives by virtue of "heavyweight core products + superior product mix + deep channel advantage". In the field of biological enzyme preparation, the company is the leader in the feed enzyme preparation industry. in the future, while consolidating the domestic leading position, on the one hand, it increases exports to expand overseas markets, on the other hand, it continues to extend to other enzyme preparation fields; in the field of steroidal raw materials, the company has become a leading company in the industry. In the future, relying on the company's cost and technical advantages in the key intermediates of steroid hormones, it is expected to gradually extend downstream.
Profit Forecast and Investment suggestion
Considering that the API business is still at the bottom, we adjust our profit forecast. It is estimated that the net profit from 2021 to 2023 will be RMB 285,000,379 million (RMB 299,000,000 before 20211,2022), an increase of 32%, 34%, 33%, 0.43, 0.58 and 0.77 respectively, and the corresponding PE will be twice as much as that of 22-17-13, and the "Buy" rating will be maintained.
Risk tips: the fill column is not as expected; the promotion of new products is not as expected; the risk of epidemic situation