Zhitong Financial APP learned that Anxin International released a research report saying that with its first "buy" rating of Green New hydrophilic Colloid (01084), net profit in 2022-25 is expected to reach 2.34 trillion 2.37 pounds / 380 million Hong Kong dollars, an increase of 124 percent, 1.5 percent, 15 percent, 27 percent, 26 percent, and a target price of 5.55 Hong Kong dollars, which is 42% higher than the current share price. On the whole, the bank believes that the company has core competitiveness in the field of botanical hydrophilic colloids, considering the company's capacity expansion plans and R & D investment in the future, the stack industry is developing rapidly, and it is believed that it will achieve rapid growth in the future.
The main points of Anxin International are as follows:
The company has grown step by step over the past few years, with a marked increase in profit margins.
Revenue grew rapidly from HK $535 million in 2016 to HK $1.16 billion in 2021, an annualised compound growth rate of 16.8 per cent. Net profit increased from 53 million in 2016 to 104 million in 2021, with an annualized compound growth of 14.2 per cent. Driven by market demand and the support of the company's increasing production capacity year by year, the company's performance has grown steadily. Benefiting from the demand-driven rise in carrageenan prices in the first half of 2002, the company achieved revenue of HK $778 million, an increase of 57% year-on-year, and a net profit of HK $126 million, an increase of 274% over the same period last year.
According to the industry trend, the domestic plant gum industry is in the stage of rapid development.
The sales volume of China's hydrophilic colloid market in 2021 is close to 145000 tons, with a growth rate of 4.8% in the past five years. The growth rate of plant gum represented by carrageenan, Agar and konjac is higher than the industry average. In 2021, the domestic carrageenan market is 2.26 billion yuan, with a growth rate of 19%; the Agar market is 9.6 billion, with a growth rate of 4.3%; and the konjac market is 3.37 billion, with a growth rate of 16%. The bank believes that in the future, with the expansion of the scope of application and the full excavation of properties, as well as the promotion of the concept of health, the trend of plant gum gradually replacing traditional animal gum is irresistible, which means that the market of carrageenan, Agar and konjac will continue to grow rapidly.
The bank believes that the new investment highlights of Green are mainly in three aspects:
1) the company is the leader in the field of Agar and carrageenan, its production capacity and sales are far ahead of its peers, and it has bargaining power over the upstream and downstream. At present, the production capacity is abundant and there is still room for improvement.
2) the company's high value-added products, such as deep processing products, compound products and konjac products, are expected to grow rapidly in the future, mainly due to the company's continuous investment in research and development of such products, the listing of related products one after another, and actively seek horizontal and vertical M & An opportunities, rapid development of new markets is expected to boost revenue and profitability.
3) the company has established a relatively stable cooperative relationship with downstream customers, and strengthened the binding relationship with customers through high quality and deep customization.