In 2021, the volume and price of the company's coenzyme Q10 products rose, with an operating income of 3.62 billion yuan, a year-on-year increase of 3.2%.
Rising costs led to a contraction in profits, achieving a net profit of 790 million yuan,-17.8% compared with the same period last year. The decline in product prices in the first quarter of 2022 put short-term pressure on results. Long-term optimistic that the company with nutrition and health products industry chain layout and diversified terminal channels, become the global nutrition and health forerunner. It is predicted that the EPS of the company from 2022 to 2024 will be 1.46max 1.66pm 1.80 yuan respectively. Adjust the target price to 34 yuan to maintain the "buy" rating.
In 2021, the company's revenue increased slightly, and coenzyme Q10 performed brightly. In 2021, the company realized operating income of 3.616 billion yuan, + 3.19% compared with the same period last year, and realized net profit of 789 million yuan,-17.76% of the same period last year. Corresponding to the fourth quarter operating income of 912 million yuan, year-on-year-2.58%, month-on-month-1.73%; achieve a net profit of 124 million yuan,-25.08%, month-on-month-22.06%. In 2021, the VA series achieved revenue of 655 million yuan,-12.66% year-on-year, and sales of 2690 tons,-0.03% of the same period last year. Coenzyme Q10 series achieved income of 891 million yuan, + 20.54% year-on-year; sales volume of 363 tons, + 18.45% year-on-year. The revenue of nutrition and health products reached 1.822 billion yuan, + 1.47% compared with the same period last year. Sales of the company's VA and Q10 rose in the first quarter of 2022 from a year earlier, but falling prices put pressure on results. In the first quarter, the operating income was 741 million yuan,-17.74% compared with the same period last year, and the net profit was 120 million yuan,-59.91% compared with the same period last year.
VA prices fell and rising costs put pressure on gross margins. The market price of VA declined in 2021, and the average sales price of the company's VA was 243yuan / kg,-12.6% compared with the same period last year. The superimposed bottleneck of the global supply chain led to the overflow of raw material prices, and the business gross profit margin was 66.2%, year-on-year-9.65pcts. The average sales price of coenzyme Q10 is 2455 yuan / kg, + 1.8% compared with the same period last year. Due to the upward cost of raw materials, the business gross profit margin is 75.8%, year-on-year-1.8pcts. In 2021, the company's overall gross profit margin was 49.4%, year-on-year-2.9pcts; net profit margin was 21.8%, year-on-year-5.6pcts. In the fourth quarter, the company's single-quarter gross profit margin is 47.4%, year-on-year + 2.0pcts; net profit rate is 13.6%, year-on-year-4.1pcts.
We will actively promote the construction of new projects and continue to expand the scale of capacity and the distribution of raw materials. In 2021, the company's new projects have been launched one after another, and the "annual production capacity of 500t coenzyme expansion project" and "800t vitamin An oil and 200t vitamin D3 oil project" have been completed and put into production in April and August 2021 respectively, with the rapid release of production capacity, the company's VA capacity will increase to 4000 tons, and VD3 production capacity will increase to 1600 tons. The commissioning of the new project will help the company to expand its business scale and market share, and enhance its competitiveness in the industry. In addition, the company's "annual production capacity of 200 tons of sodium hyaluronate reconstruction and expansion project" has been approved by EIA in November 2021, which is conducive to enriching the product line and enhancing profitability.
Expand the coverage of downstream products, promote domestic and foreign brand construction and channel expansion. Based on LEAN BODY, the company further develops the market of healthy nutritional supplements, related functional foods and functional drinks in China. In the field of nutrition and health food terminal products, through Doctor's Best and other five major brand matrices, the company has completed a comprehensive coverage in dietary supplements, oral beauty, energy supplements, sports nutrition foods and functional nutrition products and other nutrition and health subdivisions. Relying on professional knowledge, the company continues to expand platform e-commerce, social e-commerce and new media business, and continuously promotes the construction of diversified terminal channels by relying on overseas e-commerce platforms such as iHerb, Amazon, Coupang, Tmall International, JD.com, Pinduoduo and domestic cross-border e-commerce platforms.
Risk factors: the growth of the company's product sales is not as expected; the price of the company's products is falling; the progress of the company's new projects is not as expected; the price of raw materials has risen sharply.
Investment suggestion: the company firmly strengthens the brand construction, marketing efforts and product channel construction of its nutrition and health food while strengthening its core competitiveness through technological innovation and research and development, so as to enrich the layout of the whole industry chain of nutrition and health products. With its raw material cost manufacturing advantage, differentiated multi-brand and diversified terminal channel development strategy, the company is expected to become a global nutrition and health forerunner. Taking into account the decline in product prices and the rise in raw material costs to compress the profit space, we adjust the company's 2022-2023 net profit forecast to 1.025 million yuan (the original forecast is 1.603 billion yuan 1.928 billion), the new 2024 forecast is 1.11 billion yuan, corresponding to the 2022-2024 EPS forecast is 1.46 pound 1.80 yuan respectively. Give the target price 34 yuan (corresponding to the 2022 23xPE, referring to the company's 23xPE hub for the past five years) and maintain the "buy" rating.