Baolingbao Biology Co.Ltd(002286) (002286)
Baolingbao Biology Co.Ltd(002286) is a leading enterprise in China’s functional sugar industry. The company has formed a complete high, medium and low pyramid product structure of starch starch sugar functional sugar functional sugar alcohol pharmaceutical raw and auxiliary materials prebiotic terminal, providing comprehensive application schemes, products and services of functional oligosaccharides, functional dietary fiber and functional sugar alcohol. With the healthy development trend in the future, erythritol is an important core business of the company in the future. With the approval of alodonose policy, alodonose is expected to become a new growth point of the company.
With the explosive demand of consumers for health drinks, sugar free drinks are rising in China, and there is still a lot of room for growth in the future. From 2014 to 2019, China’s sugar free beverage sales accounted for 40% of CAGR +, but it accounted for only 1.25% of beverages, and there is still a lot of room for growth in the future. Among them, Chinese sugar free tea accounted for only 5.2% of tea drinks in 2019, Japan (70%), Australia (44.4%) and other countries have a large gap. Sugar free Cola carbonated drinks account for 3.4% of cola carbonated drinks, while European and American countries account for more than 30%, and China has at least ten times more room to improve compared with European and American countries. According to Sullivan’s prediction, the global total demand for erythritol will be 173000 tons in 2022, and erythritol will become the basic ingredient of various sugar free drinks in the future, and in the next five years In, the market scale of erythritol is expected to reach about 350000 tons.
Alodonose, the future star sugar substitute. Alodonose has the advantages of regulating blood glucose, low calorie, Maillard reaction and taste close to sucrose. It is evaluated as the most potential sucrose substitute by American food navigation network. It is mainly used in prepared milk, flavor fermented milk, cakes, tea drinks, jelly and other products with high edible safety. At present, alodonose has not been approved for use in China, but it is currently used as Zero sugar in the United States. It can be expected that alodonose will also be a very good sugar substitute product after it is approved in China.
The company’s erythritol and alodonose business processes are leading in the industry, and is expected to expand rapidly with the release of production capacity. The company is the first to complete the industrial production of erythritol in China. It is an important erythritol manufacturer in China. At the same time, the company has mastered the production process of solid and liquid alodonose at the same time. The research and development of solid alodonose is very difficult. The company is one of the few enterprises in the market that can produce solid alodonose. The technology is relatively stable and mature, and the product quality has reached the international indicators of similar products. The company will continue to expand production capacity in the future. With the rapid growth of industry demand, This part of business will bring new growth points to the company in the future.
Profit forecast: we expect the net profit of the company in 2021 and 2022 to be 165 million yuan and 200 million yuan respectively, corresponding to EPS of 0.45 yuan and 0.54 yuan. The current share price corresponds to a PE value of 26.99 times in 2022. It is optimistic that the company’s erythritol and alodonose business has entered the harvest period, and is rated as “strongly recommended” for the first time.
Risk warning: the epidemic situation affects the industry demand; Too fast production capacity leads to the decline of erythritol price
