Ternary organism (301206)
The downstream demand is strong and the comprehensive advantages of the leader are obvious. The “overweight” rating is given for the first time
As a global leader in the natural sugar substitute erythritol industry, the company benefits from the upgrading trend of downstream food and beverage consumption. We expect that the penetration rate of downstream sugar free and low sugar beverages in the overall beverage consumption will continue to increase, and the erythritol industry will maintain a prosperous atmosphere. The industry competition presents a stable pattern of oligarchy. The supply and demand of the industry is still tight in the short term. The supply is mainly concentrated in China’s leading enterprises. There are certain barriers in the ternary biological process. The upstream of the industry is bulk commodities dominated by corn starch and glucose, with sufficient supply and relatively stable raw material prices; The company’s listing and fund-raising layout and capacity expansion will escort future growth. To sum up, the company’s revenue from 2021 to 2023 is expected to be RMB 1.669 billion, 2.359 billion and 2.854 billion respectively, with a year-on-year increase of 113.1%, 41.4% and 21.0%; The net profit attributable to the parent company was 532 million yuan, 763 million yuan and 909 million yuan respectively, with a year-on-year increase of 128.7%, 43.6% and 19.1%; The corresponding EPS is 3.94, 5.66 and 6.74 yuan respectively, and the corresponding PE of the current stock price is 28.7, 20.0 and 16.8 times respectively. The “overweight” rating is given for the first time.
The downstream healthy consumption is upgraded, and the prosperity of erythritol industry is rising
Excessive sugar intake of residents leads to health problems, the trend of healthy and high-end consumption upgrading of food and beverage, and the comprehensive advantages of natural sweetener erythritol are obvious, which is favored by downstream food and beverage brands. China’s sugar free and low sugar beverage industry has entered a prosperous period of industrial development, and the industry penetration is expected to increase rapidly in the future. In addition to sugar free and low sugar beverages, erythritol also has broad space for application in non beverage categories, and the strong demand in the downstream is expected to drive the rapid growth of erythritol industry. The competitive pattern of the industry is excellent, with Cr5 accounting for 95% of the world. The upstream raw material supply is stable, and the cost remains relatively stable. The leading enterprises grow rapidly and expand production to meet the strong demand.
The ternary organism cultivates erythritol deeply, and its global leading position is stable
Over the years, Sanyuan biological has deeply cultivated erythritol and Yanshen products, and has grown into a global industry leader. The company’s revenue and profit have increased brightly, benefiting from the rapid growth of the demand of downstream brands, and the proportion of domestic sales has increased steadily. Through studying the process links and mastering a number of patents, the company has continued to expand its production capacity in recent years, the utilization rate of production capacity has remained high, and the production and sales are booming. The gross profit margin and net profit margin of the company are relatively high. Listing and raising funds to expand production will ensure sustainable growth in the future.
Risk tips: food safety risk, increased market competition risk, raw material price rise risk, covid-19 epidemic repeatedly affecting downstream demand risk.
