\u3000\u3 China Vanke Co.Ltd(000002) 597 Anhui Jinhe Industrial Co.Ltd(002597) )
On March 10, 2022, the company released the performance express of 2021, realizing an annual operating revenue of 5.845 billion yuan, a year-on-year increase of 59.44%; The net profit attributable to the parent company was 1.168 billion yuan, a year-on-year increase of 62.62%; The net profit deducted from non parent company was 996 million yuan, with a year-on-year increase of 74.74%, of which the net profit from parent company slightly exceeded the upper limit of the previous notice.
With the release of production capacity and the rise of prices, the company’s annual performance increased significantly. According to the company’s performance express, the reasons for the rapid growth of the company’s performance mainly include: (1) the company’s product capacity is fully released, the new project with an annual output of 5000 tons of sucralose is put into operation and gradually full, so as to further promote the growth of the demand for sucralose in the downstream market; (2) The demand for bulk chemicals increased, and the average sales price of some bulk chemical products of the company increased compared with the same period of last year; (3) The price of bulk food additives and sweeteners increased rapidly in combination with the increase of the price of bulk food additives.
To realize the extension of vertical integration, the company is expected to deeply benefit from the price increase. At present, the company has an annual production capacity of 12000 tons of Acer honey and 8000 tons of sucralose. It is the leader in the industry of Acer honey and sucralose. Their global production capacity accounts for 60% and 50% respectively. In addition, the company currently has an annual production capacity of 1000 tons of methyl maltol and 4000 tons of ethyl maltol, and another production capacity of 1000 tons of methyl maltol and 4000 tons of ethyl maltol will be put into operation in the fourth quarter of 2021. The company is committed to the vertical extension of the industrial chain. At present, the company has realized the self-production of important raw materials in the upstream of acesulfame, sucralose and methylethyl maltol, such as diketene, sulfoxide chloride and furfural, which is conducive to reducing the cost fluctuation caused by the company’s purchased raw materials.
Investment suggestion: from November to December 2021, the prices of some products of the company began to callback. Among food additives, the price of sucralose was relatively strong. As of March 10, the quotation was 450000 yuan / ton, down 6.25% from the high of 480000 yuan / ton in January, and the price remained relatively high. We believe that under the consumption concept of “Zero sugar and low calorie”, the company’s demand for sweeteners is expected to continue to grow. In addition, the company has actively extended vertically to the upstream of the industrial chain in recent years, producing important raw materials by itself, and the products have cost advantages. It is expected that in the future, due to environmental protection and other factors, the new capacity of sucralose may be limited, and the price of sucralose is expected to remain relatively high in 2022. It is estimated that the basic earnings per share of the company in 2021 and 2022 will be 2.08 and 2.81 yuan. The current stock price corresponds to 17 times and 13 times of 2021 and 2022 P / E, maintaining a cautious recommendation rating.
Risk warning: risk of weakening downstream demand; Risk of product profit decline due to sharp fluctuations in the price of upstream raw materials; The risk of intensified industry competition; Risk that the progress of projects under construction and proposed projects is less than expected; Natural and man-made disasters and other force majeure events.
