Main points of investment
Event: the company issued a 2020H1 performance forecast, expected to achieve a net profit of 70 million to 90 million yuan, a loss of 630000 yuan in the same period last year, Q2 performance of 50 million yuan, a significant improvement compared with the same period last year.
The performance is in line with expectations, and the profit of vitamin products has increased. The vitamin industry is booming in the first half of 2020, and the profits of the company's products have increased in varying degrees. The average price and year-on-year situation of 2020H1's main products:
VB1 (217 yuan / kg,+19%), VB3 (55 yuan / kg,+27%), VB5 (324 yuan / kg,-5%), VK3 (95 yuan / kg,-3%), product price increases bring profit improvement. In a single quarter, the price of VB3 and VK3 continued to increase, while the price of VB5 decreased somewhat. In terms of quantity, Jiangsu Brothers vitamins officially resumed production in March, and VB1 began to contribute increment in the second quarter.
The landing of fund-raising projects brings performance increments. The first phase of the project includes 10,000 tons of hydroquinone and 15000 tons of hydroquinone derivatives (including 3000 tons of vanillin and 2500 tons of ethyl vanillin). The product structure of hydroquinone and vanillin can be adjusted according to the market, and the anti-risk ability can be improved. at the same time, as a major global spice variety, vanillin has a good market prospect. The contrast medium project plans to have a production capacity of 1000 tons, and will become a supplier of raw materials for contrast media in the future, opening up new business areas of the company. Iodine contrast agent is an important project for the company to officially open its pharmaceutical business. in the future, the company will continue to increase the layout in the pharmaceutical field, with a broad space for growth.
Must increase the size of the spice industry. In April, the company announced plans to raise 1.2 billion more funds to build 30,000 tons of natural spices project (889 million), Brother Science and Technology Research Institute project and repay bank loans. Among them, the natural spice project mainly includes dihydrolauryl alcohol, turpentine, camphor, amberone, isobornyl acetate, which will build the turpentine industry chain. After reaching production, it is expected to bring income of 1.531 billion yuan and net profit of 206 million yuan.
Profit forecast and investment advice. It is estimated that the company's 2020-2022 net profit is 2.51,3.38 and 407 million yuan respectively. The vitamin boom brings profit improvement and the contribution of spices and contrast agents increases. At the same time, it is optimistic about the future layout of pharmaceutical business and maintain the "buy" rating.
Risk tips: downstream feed demand is declining; project progress is not as expected; vitamin prices have fallen sharply.