\u3000\u3 China Vanke Co.Ltd(000002) 597 Anhui Jinhe Industrial Co.Ltd(002597) )
On March 23, 2022, the company announced the performance forecast of the first quarter report of 2022. It is expected to realize the net profit attributable to the parent company of 420470 million yuan in the first quarter, with a year-on-year increase of 99.81% – 123.59%; It is expected to realize a net profit of RMB 430480 million after deducting non return to parent, with a year-on-year increase of 117.10% – 142.34%, and the performance is better than expected.
With the release of production capacity and the rise of prices, the company’s performance increased sharply in the first quarter. According to the announcement of the company, the high performance of the company in the first quarter is mainly due to (1) the project with an annual output of 5000 tons of sucralose has reached full production in the first quarter of 2022. Compared with the same period of last year, the production capacity, output, sales volume and sales price of sucralose have increased by different ranges. (2) Affected by the continuous rise in the prices of bulk raw materials and energy, the production costs of the company’s main food additive products and bulk chemicals continued to rise. The company timely adjusted the product prices by different ranges. In the first quarter of 2022, the prices of main products increased to a certain extent compared with the same period of last year. According to the data of Baichuan Yingfu, from January to February 2022, China’s export volume of sucralose increased by 99.12% and 104.88% year-on-year respectively, with a month on month increase of – 3.91% and 2.89% respectively; The export volume of Acer honey increased by 169.72% and 61.61% year-on-year respectively, with a month on month increase of 9.59% and – 40.08% respectively. Although the growth rate fluctuated month on month, the year-on-year growth rate of export volume remained high, indicating that overseas demand is still strong.
It is proposed to repurchase shares and implement employee stock ownership plan or equity incentive to demonstrate the development confidence of the company. On March 23, the company issued the repurchase report. The company plans to repurchase the company’s shares with its own funds of no less than 75 million yuan and no more than 150 million yuan. Under the condition that the price of the repurchased shares does not exceed 55.00 yuan / share, according to the upper limit of the repurchase amount, the number of repurchased shares is expected to be about 273 shares, accounting for about 0.49% of the current total share capital of the company. According to the lower limit of the repurchase amount, the number of repurchased shares is expected to be about 1363636 shares, accounting for about 0.24% of the current total share capital of the company; The specific number of repurchases shall be subject to the actual number of shares repurchased at the expiration of the repurchase period. The implementation period of share repurchase is 12 months from the date when the board of directors deliberates and approves the share repurchase plan. The share repurchase plan has been deliberated and adopted at the 21st Meeting of the Fifth Board of directors held on March 20, 2022. The company’s share repurchase is mainly used for the later implementation of employee stock ownership plan or equity incentive, and demonstrates its confidence in the future development of the company.
The company continues to build a moat with cost integration. 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. According to the company’s annual report, in order to give full play to the competitive advantage of the fist product sucralose, the company decided to go to the horse to produce 30000 tons of DMF project. At present, the company is promoting relevant administrative examination and approval. In addition, the company’s sulfoxide chloride phase II project has started construction, and the main project has been completed. At the same time, the company accelerated the land reserve of phase II project of Dingyuan circular economy industrial park, so as to lay a foundation for the construction of phase II project of Dingyuan base.
Investment suggestion: 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. Considering that the performance forecast of the company in the first quarter is higher than expected, and the company continues to extend upstream to expand its cost advantage, the basic earnings per share forecast of the company in 2022 and 2023 is raised to 2.96 yuan and 2.98 yuan. The current stock price corresponds to 13 times of 2022 and 2023 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.
