\u3000\u3000 Guangdong Vtr Bio-Tech Co.Ltd(300381) (300381)
Key investment points
Events: 1) the company issued the performance forecast for 2021, with an estimated loss of RMB 90-110 million; 2) The company plans to sell all the assets related to the biomedical business, that is, to sell all the equity of the three target companies of xinhexin, keyixin and Lihua pharmaceutical in cash. The transaction prices of the three companies are 820 million yuan, 50 million yuan and 430 million yuan respectively.
Performance comments: the main reasons why the company’s profit level is lower than expected are: 1) the subsidiary Hongying biology has suffered operating losses due to the rise in the prices of main raw materials and energy, the business expansion has been blocked, so the goodwill impairment loss is 75.594 million yuan, and the price of vitamin B12 products in the past has decreased, so the corresponding asset impairment loss is accrued; 2) Due to the impact of facility upgrading and power rationing in response to environmental protection requirements, the output of pharmaceutical products decreased, the sales revenue decreased and the performance declined; 3) The gross profit of biological enzyme preparation sector decreased due to the rise in the price of raw materials such as corn starch and methanol and the rise in the cost of electricity and steam power.
Event comments: the company will receive 1.3 billion cash from the sale of all the equity of the three target companies of xinhexin, keyixin and Lihua pharmaceutical. In addition, xinhexin, keyixin and Lihua pharmaceutical still owe the company 480 million yuan, 300 million yuan and 100 million yuan, with a total debt of about 880 million yuan, which will be paid off according to the agreement. Cash recovery can repay the debts of listed companies, optimize the asset structure and improve the asset liability ratio. The other part can be used for the large-scale development of biological enzyme preparation and feed additive industry. In the future, the company will adhere to the big health field, focus on biological agriculture and animal husbandry, take customer value as the orientation, and strive to become a benchmark enterprise in the global biological enzyme preparation market.
The leader of feed enzyme preparation is expected to benefit from the growth of downstream demand in the future. In the first half of 2021, the company’s overall revenue of enzyme preparation accounted for 300 million yuan, and the enzyme preparation business took feed enzyme preparation as the core product, including phytase, xylanase, etc. the feed price was raised for many times. In March 21, the Ministry of agriculture and rural areas issued the work plan for reducing and replacing corn soybean meal in feed, which mentioned the work deployment of feed formula adjustment, We believe that the corresponding demand for digestive enzymes and xylanase may increase. Moreover, the company pays attention to R & D and product renewal. In the future, it will further develop the market of ruminant feed additives and aquatic feed enzymes and expand the market share. On the other hand, the company is currently the only bolaohuisan production and sales enterprise in China, with obvious advantages of alternative anti products. In order to ensure food safety and promote green breeding, Chinese feed production enterprises began to ban anti-virus from July 2020. The extract of bolaihui has the functions of antibacterial and anti-inflammatory, appetizing and promoting growth. It can reduce the diarrhea rate of animals and improve the feed conversion rate. It has low toxicity, no drug resistance and no rest period. The effective parts of total alkaloid of bolaihui and its preparations as Chinese veterinary drugs added to livestock and poultry feed also have high development value. It can be studied and made into veterinary natural drugs for antibacterial and anti-inflammatory, liver and kidney protection, At present, it is still in the development stage. In addition to varieties of alternative antioxidant products, the company actively develops compound alternative antioxidant products, such as boyikang, which uses the synergy between glucose oxidase and bolaohui powder to improve the alternative antioxidant efficiency. Moreover, the company signed an agreement on April 27, 2021 to acquire 29% of the equity of Shiwei technology, and the shareholding ratio changed from 51% to 80% after the completion of the transaction.
Profit forecast and investment suggestions. Based on the changes of market demand and raw material cost, and with reference to the company’s performance forecast, the profit forecast is adjusted. It is estimated that the EPS in 2022-2023 will be 0.17 yuan and 0.23 yuan respectively, and the corresponding PE will be 66 / 49 times respectively, which will be adjusted to the “hold” rating.
Risk tip: the downstream demand growth for bolaohui is less than expected, and the sales volume of enzyme products is less than expected.
