Core viewpoints
The operation of the whole industry chain, the business continues to coruscate new vitality, creating a unique cost advantage. The company started as Longkou fans. Since 2012, the company has expanded into pea processing business on the basis of its original business, including pea protein, starch, dietary fiber and other products. Under the diversification strategy, the performance scale of the company has expanded greatly. Under the whole industry chain operation mode, the company establishes a circular economy model with raw materials such as peas as the starting point, using processing by-products to reduce the comprehensive cost of production; on the raw material side, the company cooperates with major international grain merchants to reduce the impact of international grain price fluctuations.
Fans are the company's traditional strong business and are expected to benefit from pattern optimization and capacity expansion. The fan business has long been one of the main pillars of the company's revenue. At present, the company has developed into the largest Longkou fan enterprise, with a market share of more than 20%, ranking first in the industry. Fans of "Twin Towers" have a good reputation both inside and outside the industry. In terms of channels, the company completes the layout of seven channels at the national and regional levels, such as three-dimensional, differentiated Shang Chao, catering and so on. The competition pattern of the fan industry is relatively scattered, the demand for fans in China is increasing, and the advantages of leading enterprises with large-scale production capacity will be expanded. It is estimated that by 2023, the company's fan production capacity will increase to 100000 tons, and the fan market share and revenue scale are expected to further increase.
The company's pea extract business has a first-mover advantage and a broad downstream demand space, which is expected to open up a new space for performance growth. Extracts such as pea protein have a high gross profit margin, the proportion of revenue continues to rise, and exceeded 50% in 2020, making it the company's largest source of revenue. Through long-term accumulation, the company is ahead of the industry in technology, pea protein, starch, dietary fiber production capacity ranks first in the world, and the scale advantage is gradually emerging. The company has established good cooperation with Beyond Meat and other major customers on pea products. At the same time, the downstream prospect of pea extract is broad, and the scale of global plant milk and plant meat is expected to exceed 100 billion yuan. The company expects to add 50% of its high-end pea protein capacity by 2023. The company's pea extract business is expected to continue to improve revenue and profitability.
Investment suggestion
Pea industry chain operation leader, the first-mover advantage is obvious. With the expansion of downstream demand and the landing of production capacity, performance is expected to rise. It is estimated that the revenue from 2022 to 2024 is 24.10 pound 26.96 / 3.049 billion yuan, 11.29%, 11.86%, 13.12%, respectively, and the net profit is 3.00, 3.53 / 435 million, respectively, 11.60%, 18.21, 23.30%, respectively. The EPS is 0.24 and 0.28, respectively. Based on the closing price on May 27, the corresponding PE is 37.19, 31.46 and 25.52, respectively.
For the first time, coverage gives a "recommended" rating.
Risk hint
Capacity expansion is less than expected; raw material prices are higher than expected; shipping prices are rising.