Event: on October 27, the company released its quarterly report for 2021, with operating income of 1.289 billion yuan in the first three quarters, down 9.95% from the same period last year, and net profit of 71 million yuan, down 42.14% from the same period last year.
Short-term factors disturb, profit level is temporarily under pressure. In the first three quarters of 2021, the company's operating income was 1.289 billion yuan, down 9.95% from the same period last year, and the net profit was 71 million yuan, down 42.14% from the same period last year. Among them, revenue in the third quarter alone was 417 million yuan, down 18.70% from the same period last year, and the net profit was 11 million yuan, down 79.94% from the same period last year. The company's business situation this year is mainly disturbed by the following short-term factors: the pharmaceutical sector increased customer orders due to the outbreak of COVID-19 's epidemic in the same period last year, resulting in a decline in sales this year. In the third quarter, due to the impact of power outages, the company's revenue declined; the bio-enzyme sector was affected by the rising prices of upstream raw materials, resulting in lower profits.
The gross profit margin has increased significantly, and the cost has been increased to promote development. In the first three quarters of 2021, the company achieved a gross profit margin of 43.68%, an increase of 5.75pct compared with the same period last year. According to the semi-annual report of this year, the proportion of substitute resistance increased significantly compared with last year, and the product structure improved. The company's sales expenses / management expenses / financial expenses were 118 million yuan, 195 million yuan and 30 million yuan respectively, with year-on-year growth rates of 1.29%, 35.15% and-29.67% respectively. The increase in management expenses is mainly due to the increase in operating shutdown losses and the increase in amortization costs in the current period of the equity incentive plan, and the decrease in financial expenses is mainly due to the partial conversion of convertible corporate bonds and the reduction of interest.
The growth rate of anti-resistance products is beautiful in recent years, and the space can be expected. In 2018, the company acquired a large-scale leading professional enterprise, Changsha Shiwei, which has more than 20 years of experience and focused on the research, development, production and management of plant extracts represented by Cornus officinalis, and officially entered the field of medicinal plants. to carry out the application research of enzyme preparation and medicinal plant synergistic substitute. 2019-2021H1, the company's feed additive sector income is 115 million yuan, 198 million yuan (+ 72.68%), 106 million yuan (+ 60.98%), 2021H1 revenue share increased to 12.18%, beautiful performance. In the feed prohibition tuyere, the company laid out in advance, with the exclusive variety of plant extract Boluo Huisan, and launched the compound product Boyikang of anti-resistance scheme, under the advantage of marketing channel accumulated for many years, feed additive business is expected to maintain high growth.
The proposed sale of the pharmaceutical sector will help to better focus on the advantages of the main business. On October 21, the company announced that it intends to sell the pharmaceutical sector business, and the transaction is still in the planning stage. If the transaction can be successfully landed, it will help the company to focus on the main business of advantages and focus its resources on the coordinated development of enzyme preparations and medicinal plant substitutes.
Investment suggestion: the company is the domestic leader of biological enzyme preparation, and the prospective layout of anti-anti-products, with the product first-mover advantage and its own channel advantage, the company is expected to quickly seize the blue ocean market. If the sale of the pharmaceutical sector business landed, the future will better focus on the advantages of the main business. It is estimated that from 2021 to 2023, the EPS of the company will be 0.31,0.50,0.64 yuan, corresponding to 33 times, 20 times and 16 times of PE respectively, maintaining the "overweight" rating.
Risk tips: downstream aquaculture industry epidemic disease, anti-industry competition intensified, product sales risk, project investment is not as expected, market development is not as expected, pharmaceutical business sales is not as expected.