\u3000\u3 China Vanke Co.Ltd(000002) 166 Guilin Layn Natural Ingredients Corp(002166) )
Editor’s note: in recent years, the improvement of consumers’ health awareness and the promotion of the concept of reducing sugar by relevant global institutions have accelerated the development of the sugar replacement industry chain. From foreign food and beverage giants to local traditional enterprises and cutting-edge brands, they have launched a variety of new sugar replacement products, “sugar replacement” has become the general trend under healthy consumption. This is the first report of our “sugar industry chain” series this year. We will conduct in-depth follow-up research on the industry chain to help investors better tap the investment opportunities of sugar industry!
Deeply cultivated in the field of plant extraction for more than 20 years, it is the only national specialized special new small giant enterprise in the industry
The company was established in November 2000, mainly engaged in natural plant extraction business. Its products are widely used in food and beverage (sweetener, flavor agent), health products, beauty, medicine and other fields. The company has been deeply engaged in the plant extraction industry for more than 20 years and is the first listed company in China’s plant extraction industry. From 2016 to 2020, the compound annual growth rate of operating revenue was 8.25%. In 2021q1-q3, the company achieved a revenue of 712 million yuan, a year-on-year increase of 60.56%, a net profit of 95 million yuan, a year-on-year increase of 43.89%, and a net interest rate of 13.34%.
Firmly grasp the development opportunity of substitute sugar market and continue to win large orders from overseas food giants!
In recent years, overseas giants have accelerated the business layout of natural sweeteners, and the industry concentration has continued to improve. The company’s main products in the field of natural sweeteners include Stevia extract, Siraitia grosvenorii extract, sweet tea extract, etc. among them, stevia and Siraitia grosvenorii extract have obtained the GRAS certification of the US FDA, which is the first enterprise in the world to obtain the certification of these two products at the same time, And has established cooperative relations with many international well-known customers such as Coca Cola and Pepsi. In 2021h1, the company’s natural sweetener business realized a revenue of 264 million yuan, a year-on-year increase of 66.4%, accounting for 61.7% of the revenue of plant extraction business. In 2018, the company signed an exclusive distribution contract with a $400 million target of $2 billion 70 million, which is the largest fragrance and fragrance company in the United States. The strategic binding of key customers still needs to accelerate the release of orders. At the same time, the company plans a non-public offering project in 2021. It is expected that the annual output of Stevia extract will increase by 4000 tons and the production capacity will continue to expand.
Establish the world’s largest industrial marijuana extraction plant and enjoy the rapid growth dividend of the industry
In October 2021, California announced that CBD and industrial marijuana derivatives can be added to food and beverage, dietary supplements, cosmetics and pet food as legal ingredients. It is expected that the application scope of subsequent CBD will be gradually liberalized, and the relevant market in the United States will reach US $16.8 billion in 2025. At present, the scale of industrial marijuana extraction in North America is low and there is a large room for industrial improvement. The company officially laid out industrial marijuana in 2019. As of 2021q3, it has invested US $80 million to build the “industrial marijuana extraction and application engineering construction project”. The project was put into trial operation in October 2021 and is currently the largest industrial marijuana extraction plant in the United States, It has been listed as a demonstration project by the Indiana state government; It is estimated that the annual processing of raw materials is 5000 tons, and the gross profit margin of the project is 50%. It is conservatively estimated that the gross profit of the company will be increased by about 60 million US dollars after all the raw materials are put into operation. In the future, the company is expected to reuse its channel, customer and brand advantages in the field of plant extraction, quickly open the CBD international market and enjoy the rapid growth dividend of the industry.
Profit forecast and investment suggestion: the company is a leader in the plant extraction industry. Under the background of consumption upgrading, benefiting from the general trend of “sugar reduction”, the natural sweetener business will enter a period of rapid growth. At the same time, the company is looking forward to the overseas layout of industrial marijuana and the establishment of the largest industrial marijuana extraction plant in the United States, which is expected to fully enjoy the dividend of CBD application policy liberalization, It is estimated that the company’s revenue in the 21st-23rd year will be RMB 1181 / 1796 / 2297 million, with a year-on-year increase of 50.73% / 52.01% / 27.94%, and the net profit will be RMB 118 / 196 / 291 million, with a year-on-year increase of 37.02% / 65.97% / 48.66%; The corresponding PE for 21-23 years is 40.92/24.65/16.58x. With reference to comparable companies, 28 times PE for 23 years is given, and the corresponding target price is 14.42 yuan. It is covered for the first time, and the “buy” rating is given.
Risk tips: macroeconomic risk, technical risk, exchange rate fluctuation risk, epidemic risk
