share_log

阜丰集团(00546.HK):味精价格持续高位 预计上半年盈利同比大幅增长

Fufeng Group (00546.HK): monosodium glutamate prices remain high and profit is expected to increase sharply in the first half compared with the same period last year.

中金公司 ·  Jul 23, 2019 00:00  · Researches

Forecast profit growth of 80% compared with the same period last year

Fufeng Group issued a profit forecast, and it is expected that the net profit in the first half of 2019 will increase by no less than 80% compared with the same period last year, that is, no less than 567 million yuan, mainly due to orderly competition in monosodium glutamate business, persistently high prices and improved product gross profit margin. It is in line with our forecast and exceeds market expectations.

Pay attention to the main points

Monosodium glutamate is not light in the off-season, the price is expected to remain high, and the expansion of duopoly industry tends to be rational.

At present, the average price of monosodium glutamate in the market is 8600 yuan / ton, and the high-end price is 8800 yuan / ton, up 17% from the low price of 7350 yuan / ton in the fourth quarter of last year. The downstream demand of monosodium glutamate is rigid, the customers are scattered and the sensitivity to price increase is low. The oligopoly structure of the industry is stable, CR3 is more than 80%, and the company's monosodium glutamate production capacity of 1.3 million tons occupies the first place. At present, the industry operating rate is high, supply and demand is tight, at the same time, industry expansion tends to be rational, and there is no new capacity put into operation for the time being. Monosodium glutamate prices are expected to remain high.

The price of raw material corn rose slightly, and the company's capacity layout brought a relative cost advantage. At present, the average price of corn in the national corn market is 1948 yuan / ton, and the price of corn in Heilongjiang is 1800 yuan / ton, which is lower than the average price of 148yuan / ton. the company has a superior geographical location and brings relatively low raw material costs.

According to the CICC Agricultural Group, the price of corn, the main raw material, will rise steadily in the second half of the year, and it is recommended to pay attention to the rotation of state storage, the harm of Spodoptera litura and the progress of new corn on the market.

Threonine, lysine product prices hit bottom, with backward small and medium-sized production capacity quietly waiting for the industry inflection point to come. Stimulated by the corn subsidy policy in 2017, Northeast China and other places increased more amino acid production capacity. In 2018, lysine production capacity increased by 1 million tons, threonine increased by 300000 tons, supply-side pressure increased, competition pattern dispersed, and there was a lack of real leading enterprises. At present, the average market price of lysine and threonine is 7340 yuan / ton, down 35% and 23% from the beginning of 2018. The start of the industry is relatively low, and the reshuffle is imminent. The company's Su and Lai products suffer profits, waiting for the industry inflection point to come.

Valuation and suggestion

Maintain the company's 2020 earnings forecast of 0.51 9.5x/8.7x per share, maintain the neutral rating and target price of 5.40 yuan, corresponding to 2019 7.4x/6.8x 2020, which is 28.6% higher than the current share price, and the current stock price corresponds to 2019 7.4x/6.8x 2020.

Risk

Monosodium glutamate prices decline, downstream demand is depressed, corn prices rose sharply, the valuation center fell.

The translation is provided by third-party software.


The above content is for informational or educational purposes only and does not constitute any investment advice related to Futu. Although we strive to ensure the truthfulness, accuracy, and originality of all such content, we cannot guarantee it.
    Write a comment