The merger and acquisition of Odyssey has brought about significant changes in the fundamentals of the company, bringing an innovation premium and growth value that can not be ignored. The company acquired a 98.94% stake in Beijing Odyssey Chemical on October 23, 2020, promoting the transformation of the company to a fine chemical R & D platform. Odyssey is a fine chemical R & D platform company guided by continuous innovation. Completely different from the traditional chemical enterprises, the company's innovation premium is reflected in that the company can continuously develop high value-added products that meet the needs of the market. Fine chemical products have high purity and low cost, and can continue to create value for customers while maintaining high gross profit. Odyssey relies on a high level of research and development to infiltrate more high-end industries to promote performance growth without relying on individual products but full-category and multi-pipeline business, thus getting rid of the pain point that the market capitalization of the traditional chemical industry fluctuates with the cycle. The growth value comes from the fact that Odyssey is focused on the research and development of high-end compounds, and the three tracks of "pharmaceutical intermediates, fluorescent brighteners and electronic chemicals" are working at the same time. At present, the products have been exported to 71 countries or regions. 70% of the company's business is extroverted, achieving a breakthrough in some foreign monopoly areas of Chinese quality.
While paying attention to high-intensity R & D and expanding the category of intermediates, the company has reached a strategic cooperation with Gehua Huaxiang to achieve access to the upstream key materials and protect the company's products by reducing costs and increasing efficiency. The company's phosgene resources, coupled with the hydrogen and chlorine resources obtained through cooperation with Hubei Gehua Huaxiang, have helped the company to achieve the opening of the whole industry chain from "R & D-basic raw material production-intermediates-customers". After the integration of chlorine resources, the company will extend the industrial chain to the purchase of benzene, toluene and xylene, reduce the cost of raw materials, increase the gross profit margin of products, and greatly enhance the profitability of the company. After integrating GE Hua Hua Xiang chemical hydrogen resources, the company can use GE Hua Hua Xiang Chemical Plant to produce chemicals and turn hydrogen trailer transportation into hydrogen pipeline transportation. Hydrogen can be used for hydrogenation reaction to reduce the cost of raw materials and intermediates in chemical synthesis. In the future, the company can make full use of Sanqi resources to further extend the existing industrial chain and produce more high value-added products.
Investment suggestion: we believe that the core value of the company lies in "the innovation premium brought by focusing on the underlying scientific research, the growth value brought by the concerted efforts of the three major races", and the positioning of the company as a fine chemical R & D platform company. molecular block companies such as standard drug stone technology. Based on this, we predict that the operating income of the company from 2021 to 2023 will be 3.911max 52.29max RMB 6.455 million, the return net profit will be 3.01max 1.02m RMB, and the EPS will be 0.32pm 1.06pm. Corresponding to PE32.15/15.82/9.7X, it is predicted that the compound growth rate of the company's three-year performance will reach 82.4%, which is estimated by 82*0.6*EPS according to the PEG valuation of 0.6 times. Raise the company's target price to 15.4 yuan and maintain a "buy" rating.
Risk tips: raw material price fluctuations, performance forecasts less than expected, product price fluctuations