\u3000\u3 China Vanke Co.Ltd(000002) 166 Guilin Layn Natural Ingredients Corp(002166) )
Event: the company announced that its “industrial marijuana extraction and application engineering construction project” in the United States is expected to be officially mass produced before June 30, 2022. At the same time, the sun company hemprise, LLC signed the entrusted processing intention agreement with a global mainstream industrial marijuana enterprise, and the cooperation is expected to contribute US $255-5.7 million in revenue.
The industrial marijuana project is advancing steadily and accelerating the development of CBD international market
The company has established the world’s largest industrial marijuana extraction plant and has been in trial operation since October 2021. At present, the company is actively overcoming the impact of the epidemic and vigorously carrying out technical personnel assignment and equipment and process commissioning. It is expected that the project will reach formal mass production before June 30, 2022, and the gross profit margin of the project is expected to be 50%; At the same time, the sun company hemprise, LLC signed an agreement of intent on entrusted processing with a global mainstream enterprise of industrial marijuana, which plans to process 500000 pounds (about 227 tons) of industrial marijuana raw materials from August to December 2022 to make high-purity CBD crystals or powders. According to the unit price range of processing fee per pound agreed in the agreement, the company expects that the order will contribute US $2.55-5.7 million (the specific transaction amount will be determined according to the content of raw materials, product purity, actual recovery rate and other factors). We believe that the intentional agreement signed between the company and mainstream enterprises in the global industrial marijuana market shows that its more than 20 years of experience in the plant extraction industry and the leading large-scale level and production capacity of American industrial marijuana factories have been recognized by downstream customers. With the continuous improvement of relevant regulations and policies in the application field of American industrial marijuana products, it is expected to further explore the international market and improve the profitability of the company.
Firmly grasp the development opportunities of sugar substitute market and continue to obtain 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 FDA. It is the first enterprise in the world to obtain the certification of these two products at the same time, and has cooperated with Coca Cola PepsiCo and many other international well-known customers have established cooperative relations. 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.
Profit forecast and investment suggestions: we expect the company’s revenue to be RMB 1.181/1.796/2.297 billion in 21-23 years, with a year-on-year increase of 50.73% / 52.01% / 27.94%, and the net profit to be RMB 118 / 1.96/291 million, with a year-on-year increase of 37.02% / 65.97% / 48.66%. Considering that the company, as a leader in the plant extraction industry, will benefit from the general trend of “sugar reduction” under the background of consumption upgrading, and the natural sweetener business will enter a period of rapid growth, At the same time, the company plans overseas industrial marijuana and establishes the largest industrial marijuana extraction plant in the United States, which is expected to fully enjoy the dividend of CBD application policy liberalization and maintain the “buy” rating.
Risk tips: macroeconomic risk, technical risk, exchange rate fluctuation risk, epidemic risk.
