\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 737 Cofco Sugar Holding Co.Ltd(600737) )
Matters:
Announcement of the company: according to the preliminary accounting of the company, from January to February 2022, the company achieved an operating revenue of about 3.465 billion yuan, an increase of about 18% year-on-year; The net profit attributable to the shareholders of the listed company was about 165 million yuan, a year-on-year increase of about 25%.
Guoxin agriculture's view: 1) the company is the leader in China's sugar industry. From January to February 2022, its performance benefited from the improvement of management efficiency and the upward boom of sugar price, realizing steady growth. 2) Relying on the advantages of COFCO group, the major shareholder, in terms of sugar import quota, customer resources and funds, the company takes the high integration of production, supply and marketing as the business philosophy, focuses on the main business of sugar, and forms an operation body of upstream raw material supply, midstream production and processing and downstream marketing, so as to ensure the quality of sugar products from the source and reduce the overall operating cost, The leading advantage is obvious. 3) China's sugar output has declined, and the gap between supply and demand continues. Driven by the additional import cost, the sugar price will follow the reversal of the energy storage cycle of the international sugar price, and remain optimistic about the subsequent price. As a leader, the company may benefit the most from the upward boom of sugar price. 4) The company has a stable leading position in the sugar industry, and its management ability has been continuously improved. It is optimistic for a long time in the future and maintains the "buy" rating. Considering that the high sugar price boom is expected to continue in the next two years, we raised the company's net profit attributable to the parent company from 21 to 23 years to RMB 9.9/12.9/1.39 billion (previously RMB 9.8/11.9/1.37 billion), corresponding to PE 18 / 14 / 13X.
Comments:
The performance of the company increased steadily from January to February of 22 years, and the year-on-year growth rate of net profit attributable to the parent company was close to 25%
According to the announcement of the company, after preliminary accounting, from January to February 2022, the company achieved an operating revenue of about 3.465 billion yuan, an increase of about 18% year-on-year; The net profit attributable to the shareholders of the listed company was about 165 million yuan, with a year-on-year increase of about 25%, and the performance was brilliant. We believe that the company's performance growth is mainly due to: on the one hand, the company continues to optimize the supply structure of the industrial chain and comprehensively improve the operation efficiency; On the other hand, China's sugar price remained high, and the price from January to February 2022 increased significantly compared with the same period in 2021. According to the latest sugar price data, the Zheng sugar index released on March 11, 2022 reached 5880.1, an increase of 2.3% over the beginning of 2022 and 8.5% over the same period in 2021
Since 2020, the international sugar price has maintained a high boom. Due to the high dependence on China's white sugar import, the import volume accounts for nearly 30% of China's total consumption, and the large gap between China's sugar supply and demand, since the beginning of summer in June 2021, the sugarcane producing areas in southern China have shown the meteorological characteristics of paying equal attention to drought and flood, affecting sugar production, According to the analysis of China's annual sugar supply and demand situation, China's sugar supply and demand will remain at 1.38 million tons in 2020, but the annual sugar supply and demand gap will remain at 1.38 million tons in June, 2021 and 2021 respectively. In addition, considering that the current situation in Russia and Ukraine is still uncertain and the high oil price may promote the increase of fuel ethanol demand, which will increase the proportion of sugarcane used by sugar producing countries in the new pressing season, thus squeezing the global output of sugar products, we remain optimistic about the sugar price in the next two years. As a leading enterprise in China's sugar industry, the company may benefit most from the upward boom in sugar prices.
The company is a leader in China's sugar industry and the major shareholder COFCO group has strong strength
The company is a sugar specialized company controlled by COFCO group. Its core business is sugar industry and tomato processing. Its sugar business has a whole industry chain development model of sugar making outside China (self-produced sugar), sugar import and port refining (processed sugar), Chinese sugar sales and trade (trade sugar), sugar storage and logistics. In 2020, the company's sugar sales reached 1.124 million tons, a year-on-year decrease of 4.01%, and achieved an operating revenue of 21.13 billion yuan, a year-on-year increase of 14.7%, with a net profit attributable to the parent company of 530 million yuan, a year-on-year decrease of 8.7%. Relying on COFCO's advantages in sugar import quota, customer resources and capital, the company takes the high integration of production, supply and marketing as its business philosophy, focuses on the main business of sugar, and forms an operation body of upstream raw material supply, midstream production and processing and downstream marketing, so as to ensure the quality of sugar products from the source and reduce the overall operating cost.
Management advantage + B2B sales mode to create competitive barriers for sugar merchants and look forward to the future development of the company
The company has continuously improved its market-oriented operation ability and lean management ability, promoted the implementation of technical transformation projects, and achieved cost reduction and efficiency gains. In 2020, the company's capacity utilization rate was 66%, significantly higher than the industry level, and the operating cost per ton of sugar decreased by 22% year-on-year. Compared with other listed sugar enterprises, the cost rate of sales + management of the company is lower in the industry, and has maintained long-term cooperative relations with well-known food and beverage enterprises at home and abroad, such as Yizi, Cargill, Nestle, Mengniu and Coca Cola. The annual operation volume of sugar business accounts for 21% of the total national consumption, and the leading position is stable.
Investment suggestion: China's sugar industry leader is expected to continue to benefit from the high sugar price boom and maintain the "buy" rating
The company has a stable leading position in the sugar industry, and its management ability has been continuously improved. It is optimistic for a long time in the future and maintains the "buy" rating. Considering that the high sugar price boom is expected to continue in the next two years, we raised the company's net profit attributable to the parent company from 21 to 23 years to RMB 9.9/12.9/1.39 billion (previously RMB 9.8/11.9/1.37 billion), corresponding to PE 18 / 14 / 13X.
Risk tips
Sugar price fluctuation risk, exchange rate change risk, natural disaster risk on raw material supply
