The company announced on the evening of June 9 that it intends to invest 66 million yuan with management and core backbone members to set up Shaomei Biology to develop biological products related to polysaccharides and biological proteins. Haihua Technology, a subsidiary of Haihua Technology, has ploughed the flavor and flavor industry for many years and has rich reserves of related technology. as a rich and extension of the company's existing flavor and flavor business, the new business will have a synergistic effect with the existing business and enhance the company's long-term competitiveness. In addition, the participation of management and senior executives in investment also demonstrates the company's confidence in entering the biotechnology field. We are optimistic about the high growth prospects of the company's short-term and long-term performance, maintain a "buy" rating, and give the company 36 times PE, to maintain its target price of 21 yuan in 2021.
Enter the field of biotechnology, extend the industrial chain and enrich the product line. The company announced on the evening of June 9 that it intends to invest 66 million yuan with management and core backbone members to set up Shaomei Bio, with Xie Fengmiao as chairman. Shaomei biology plans to take hyaluronic acid and elastin as the starting point of research and development, through biological extraction, microbial fermentation, cross-linking and other active biomaterial technology to develop related polysaccharides and biological protein biological products. We believe that Haihua Technology, a subsidiary of Haihua Technology, as a leading flavor and flavor enterprise in China, is rich in related technology reserves, and biotechnology, as the extension and enrichment of the company's existing fine chemical business line, will have a good synergy effect with the existing business. We believe that this move is in line with the company's business development plan and will provide new impetus for the company's long-term development.
Management and core backbone shareholding investment, a further demonstration of confidence in development. Shaomei Biology has a registered capital of 120 million yuan, and the company / Bengbu Haicheng / Bengbu Haimeng / partnership based on management and core members respectively holds 55.00%, 11.54%, 20.13%, 13.33% of the shares. We believe that the participation of the company's senior management team and the core backbone of Haihua Technology further demonstrates the confidence of the company to become a first-class fine chemical enterprise in the field of biotechnology.
Outlook for the whole year: the high prosperity of the traditional main business and the continuous expansion of fund-raising projects will contribute to the outbreak of performance. In terms of the traditional main industry, benefiting from the high prosperity of the pesticide and chemical fertilizer industries, we expect that the high prosperity of the traditional main industry is expected to continue; in terms of fine chemicals, the incremental performance is expected to mainly come from the 3000 t / a thymol project (2021Q1 production) and the second A separation project (2020Q4 production), we expect the two projects to contribute 14750 million yuan in net profit for the whole year respectively. In the long run, the company's four major product lines have room to expand production and downstream, and we expect the company's fine chemical business to continue to develop and promote new categories.
Risk factors: the progress of new business is not as expected, competition intensifies more than expected, and raw material prices rise.
Investment advice: with the high prosperity of traditional business and the gradual production of fund-raising projects, we expect that the company's performance will bottom out and rebound in 2021, and the company's performance will continue to grow in the next two years as new projects continue to be put into production.
We maintain the company's 2021-2023 homing net profit forecast of $544 million, compared with $0.58 million for EPS, and give the company a target price of $21 for 36 times PE, in 2021, maintaining a "buy" rating.
