The company is the leader of domestic food nutrition fortifier, in the environment of continuous increase in demand and good frequency of supply, we are optimistic about the profit elasticity of the company's coenzyme Q10, vitamins and other products; considering the layout of the whole industry chain in the field of NMN and other nutrition and health products, we look forward to long-term growth space. It is predicted that the EPS of the company from 2020 to 2022 is 2.00, 2.30, 2.67 yuan respectively, and the target price is 56 yuan. Cover for the first time, giving a "buy" rating.
Food nutrition fortifier leader, the layout of health products throughout the industry chain. The company's main products include coenzyme Q10, DHA, ARA, vitamin A, vitamin D3 and so on. At present, the company has coenzyme Q10 production capacity of 600t (the world's largest), vitamin A production capacity of 2700 tons, vitamin D3 production capacity of 1000 tons. In recent years, the company has been gradually integrating upstream raw material production, mid-stream production and R & D, downstream sales and other businesses through acquisition and investment, successfully realizing the coverage of the whole industry chain of health products industry.
Coenzyme Q10: the industry pattern is getting better, and the leading edge is highlighted. Coenzyme Q10 has many pharmacological functions such as scavenging free radicals and improving immunity. It is widely used in the field of health products. At present, the global annual demand is about 800 tons, and it is expected to continue to grow in the future. Coenzyme Q10 industry has experienced overseas monopoly, domestic substitution, survival of the fittest and other development stages, the current industry integration is coming to an end, product prices have risen sharply since 2020, we are optimistic about its long-term upward trend. The company currently has a production capacity of 600 tons of coenzyme Q10, is in an absolute leading position in the world, and is expected to fully benefit from the growth dividend brought about by the improvement of the industry pattern.
NMN: aim at anti-aging industry, layout hundreds of billions of blue ocean market. NMN is a kind of health care product which is considered to have anti-aging function. Compared with other competitive products, it has the advantages of non-toxic side effects and obvious effect of increasing NAD+ content.
We estimate that every 1% of the population covered by NMN will correspond to a market space of 30.4 billion yuan, and the long-term scale of the industry is expected to reach the level of 100 billion yuan. The company's American subsidiary has released NMN products in Tmall International, which has a certain price advantage compared with most similar products, and is expected to grow into a new growth point of the company's health products business.
Vitamins: supply-side factors push up prices and are optimistic about profit elasticity. Affected by the epidemic in 2020, the gap between supply and demand of VA, VD3 and other products expanded, and prices continued to rise. Recently, the supply side of VA is good and frequent, and prices are expected to rise. We are optimistic about the profit elasticity of vitamin business. In addition, the company's annual production of 800 tons of vitamin An oil and 200 tons of vitamin D3 oil project is expected to be put into production in 2021, the project is expected to upgrade the vitamin production process. It is optimistic that the company's vitamin business competitiveness and profitability will be further improved.
Risk factors: demand growth is not as expected; product prices are falling rapidly; raw material prices are rising sharply; project production is not as expected.
Investment suggestion: the company is the leader of domestic food nutrition fortifier, under the environment of continuous increase in downstream demand and good frequency of supply, we are optimistic about the profit elasticity of the company's coenzyme Q10, vitamins and other products; at the same time, considering the layout of the whole industry chain in the field of NMN and other nutrition and health products, we look forward to the long-term growth space of the company. The forecast company's net return profit from 2020 to 2022 is 1.232 billion / 1.417 billion / 1.647 billion yuan respectively, and the corresponding EPS forecast is 2.00 pounds 2.30 pounds 2.67 yuan respectively. Reference industry comparable companies will give 28xPE in 2020, corresponding to the target market value of 34.5 billion yuan, corresponding to the target price of 56 yuan. Cover for the first time, giving a "buy" rating.