Event Overview
Cofco (Tangshan) Sugar Co., Ltd., a wholly owned subsidiary of the company, plans to invest 190.93 million yuan to build the 150000 ton annual cotton (granulated) sugar production line project of the second phase of Caofeidian refined sugar project, which is expected to reach production in 2023.
Analysis and judgment:
With the continuous expansion of refined sugar production capacity, it is expected to thicken the basic profit space company is the leader of China's sugar industry, the annual operating volume of sugar business has reached more than 3 million tons, accounting for about 21% of the total national consumption. The company's sugar business can be divided into three parts: self-produced sugar, refined sugar and domestic sugar, of which the production capacity of self-produced sugar is 700000 tons and that of refined sugar is 1.9 million tons. We believe that the refined sugar business can naturally hedge against adverse price fluctuations and is the main source of the company's basic profits. this time, we plan to invest 190.93 million yuan to build a 150000 ton annual cotton (granulated) sugar production line project of the second phase of the Caofeidian refined sugar project. on the one hand, the company can give full play to its excellent ability to control sugar sources, take advantage of the opportunity to expand production capacity and increase market share. On the other hand, the basic profit space of the company can be further thickened.
The warming of demand boosts oil prices, driving up the trend of international sugar prices.
Brazil is the world's leading sugar exporter, with an annual export volume of more than 20 million tons, accounting for about 35% of the world's total sugar exports. the amount of its exports is a key factor that determines the trend of international sugar prices. In 2021, the marginal impact of the global COVID-19 epidemic gradually weakened, global demand entered the path of recovery, and demand improved to boost crude oil prices. According to Wind data, as of June 18, 2021, international oil prices had risen to 73.51 US dollars per barrel, up 43.88 per cent from the beginning of the year. We believe that there is still room for international crude oil prices to continue to rise, the substitution effect of ethanol in Brazil is highlighted, and the price center is expected to rise synchronously, dragging down the ratio of sugar to alcohol in Brazil and boosting global sugar prices.
With internal and external linkage, domestic sugar prices are expected to contribute to the company's profit elasticity. China's annual sugar consumption is about 15 million tons, while the output is only about 10 million tons, and the annual gap between supply and demand of about 5 million tons needs to be supplemented by imports. Therefore, the trend of domestic sugar price is highly consistent with that of international sugar price. When the international sugar price rises, the cost of domestic imported sugar rises, which supports the domestic sugar price, and vice versa. We believe that as global demand enters the path of recovery, the upward rise in international crude oil prices is expected to drive up international sugar prices, and the rise in import costs will support the overall upward movement of domestic sugar prices. As the leader of China's sugar industry, the rising sugar price is expected to lead to the rapid release of the company's profits.
Investment suggestion
The continuous expansion of refined sugar production capacity will continue to increase the company's basic profits, and the sugar price entering the upward cycle is expected to contribute to the company's profit elasticity. Based on this, we raise the revenue forecast of 2 pairs of 02 companies in 2022 to 25582 million yuan (the previous value is 25510 million yuan, respectively), and raise the net profit forecast of returning to the mother to 1.2714 billion yuan (the previous value is 1.321,631 billion yuan, respectively). In addition, we estimate that the company's operating income will be 34.113 billion yuan and the net profit will be 1.879 billion yuan in 2023. To sum up, we estimate that the company's EPS will be 0.59 EPS 0.80 PE 0.88 yuan respectively from 2021 to 2023, while the current share price will maintain a "buy" rating corresponding to 16 Universe 12amp 11X.
Risk hint
The risk of natural disaster, the risk of policy disturbance, and the risk of sugar price rising less than expected.
