\u3000\u3 China Vanke Co.Ltd(000002) 597 Anhui Jinhe Industrial Co.Ltd(002597) )
Core view
Sucralose added new capacity and significantly improved its performance in 2021. The company released its annual report for 2021, and achieved an operating revenue of 5.845 billion yuan in 2021, a year-on-year increase of 59.44%; The net profit attributable to the parent company was 1.177 billion yuan, a year-on-year increase of 63.82%. In the fourth quarter, the operating revenue in a single quarter was 1.826 billion yuan, a year-on-year increase of 91.39%; The net profit attributable to the parent company was 464 million yuan, a year-on-year increase of 150.06%. The basic earnings per share of the company is 2.1 yuan / share. During the reporting period, the company's 5000 t / a sucralose project was completed and put into operation. Among the company's Dingyuan production base - Circular Economy Industrial Park Phase I project, 4500 T / a Jiale musk solution and 1000 t / a furan ammonium salt projects were put into operation. The construction of sulfoxide chloride phase II has been started. At present, the main project has been basically completed. The 5000 t / a methyl ethyl maltol project of the company has been completed and put into trial production. All indicators have basically reached the expectation, and the project will reach the production and standard as soon as possible. In addition, the company also plans a 30000 ton DMF project, which is currently in the process of approval. After the completion of the project, it will further reduce the impact of raw material cost fluctuation on the company's product cost, and use the advantages of industrial chain integration to stabilize the company's profitability.
New production capacity was restricted by policies, and sucralose remained at a high price. At present, the global production capacity of sucralose is 27300 tons and that of China is 23800 tons. Normal production scheduling enterprises include Anhui Jinhe Industrial Co.Ltd(002597) , Kangbao biochemical, Sanhe Weixin, Kehong biology and Hebei fast cola, with a production capacity of about 15800 tons. Sucralose was classified as a highly polluting industry in 2021. According to the implementation of China's energy consumption dual control policy and supporting policies throughout the country, in principle, it is difficult for Chinese enterprises to obtain new approved new projects of sucralose. From 2009 to 2018, the average annual compound growth rate of demand was about 15%. In 2018, the market demand of sucralose in China was close to 3000 tons, accounting for about 30% of the total global market demand. It is estimated that the global demand for sucralose is about 15000 tons. At present, the pattern of sucralose industry in China is basically balanced between supply and demand. According to the calculation and prediction of the scale of China's sugar free beverage market by the Chinese Academy of Sciences, it is expected that by 2027, the average annual growth rate of China's sugar free beverage market will be 12%, and the growth rate of overseas sucralose will remain at about 10%. It is expected that under the dual control policy of energy consumption, it is difficult for China to have new production capacity in the short term, and sucralose will enter a period of tight supply and demand with the continuous release of demand. We believe that the price of sucralose will remain high.
Risk tip: the risk of the downstream food and beverage demand contraction caused by the epidemic; Risk that the project is put into operation less than expected; Risk of large fluctuations in product prices.
Investment suggestion: the company's main business sucralose is limited by the "two high" policy, the new production capacity of the industry is difficult to be approved, the demand for sugar substitute drinks continues to increase, and the industry maintains a high outlook under the tight balance between sucralose supply and demand. We believe that the company's addition of sucralose in 2021 will contribute to the annual performance, increase the production capacity of 5000 tons of maltol, continue to promote the second phase planning of Dingyuan, continue to expand the layout of the company in the field of sugar substitutes, and stabilize the leading position of sugar substitutes in the world. It is estimated that the net profit attributable to the parent company in 22-24 years will be RMB 1.680/1.828/2.248 billion, with a year-on-year growth rate of 42.8% / 8.8% / 23.0%; The corresponding EPS is 3 / 3.26/4.01 yuan; The current share price corresponds to PE of 13.4/12.3/10x, maintaining the "buy" rating.
