\u3000\u3 China Vanke Co.Ltd(000002) 166 Guilin Layn Natural Ingredients Corp(002166) )
Event: the company released 2022q1 performance forecast and 2021 annual performance express: it is expected that 22q1 will achieve a net profit attributable to shareholders of listed companies of 33-39 million yuan, a year-on-year increase of 53.25% – 81.11%; In 2021, it is expected to achieve an operating revenue of 1.053 billion yuan, a year-on-year increase of 34.4%, a net profit attributable to shareholders of listed companies of 118 million yuan, a year-on-year increase of 37.74%, and a net interest rate of 11.21%.
The revenue of natural sweetener business increased significantly and the profitability continued to improve
In 2021, the company expects that the plant extraction business will achieve a total revenue of 970 million yuan, with a year-on-year increase of 55.64%, accounting for 92.08% of the total revenue. Among them, the natural sweetener business benefits from the rise of the trend of “reducing sugar and no sugar” outside China, and its performance will grow rapidly. In 2021, it is expected to achieve a revenue of 633 million yuan, with a year-on-year increase of 54.86%, accounting for 60.15% of the total revenue, which has become the main driving force for the company’s performance growth. 22q1, as the company continued to strengthen the market expansion of large single products such as natural sweeteners and tea extracts, and continued to strengthen the ability of cost control through technological transformation, the net profit attributable to shareholders of listed companies was 33-39 million yuan, with a year-on-year increase of 53.25% – 81.11%, far exceeding the growth rate of revenue and rapidly improving profitability. We believe that the company’s natural sweetener business has established partnerships with many famous international customers such as Coca-Cola and PepsiCo. In 2018, we signed an exclusive distribution contract with us $400 million, the largest fragrance and fragrance company in the United States. In addition, a non-public offering project is planned. It is expected that the annual output of Stevia extract will increase by 4000 tons, and the production capacity will continue to expand. In the future, it is expected to benefit from the scale effect and steadily improve the profitability.
The US House of Representatives passed the federal medical marijuana legalization bill for the second time, and the demand for CBD extract is expected to accelerate the release
In terms of policy, on April 1, the US House of Representatives passed the federal medical marijuana legalization Act (more act) for the second time with 220 votes to 204 votes; At the same time, the Senate federal legalization bill, the marijuana management and Opportunity Act (CAOA), is expected to be submitted in April, accelerating the legalization process of medical marijuana at the federal level; Previously, on March 24, without debate in the Senate, all members unanimously passed the marijuana diphenol and marijuana research Expansion Act, which simplified the application process of medical marijuana researchers and encouraged the U.S. Food and Drug Administration (FDA) to develop medical marijuana derived drugs, marking the further affirmation of the medicinal value of medical marijuana in the United States. The company officially laid out industrial marijuana in 2019. As of 2021q3, it has invested US $80 million to build “industrial marijuana extraction and application engineering construction project” in the United States. It is expected that the project will reach formal mass production before June 30, 2022. It is currently the world’s largest industrial marijuana extraction plant, which has been listed as a demonstration project by the Indiana state government. It is expected to process 5000 tons of raw materials per year, and the gross profit margin of the project can reach 50%; At the same time, it has signed an agreement on entrusted processing intention with a mainstream enterprise of global industrial marijuana, and it is expected that there will be more orders in the future. We believe that with the continuous improvement of American industrial marijuana regulations and policies, the company is expected to reuse its channel, customer and brand advantages in the field of plant extraction in the future, quickly open the CBD international market and enjoy the rapid growth dividend of the industry.
Profit forecast and investment suggestions: we expect the company’s revenue to be 1.053/1.745/2.275 billion yuan in 21-23 years, with a year-on-year increase of 34.41% / 65.69% / 30.38%, and the net profit to be 1.18/2.00/300 billion yuan, with a year-on-year increase of 37.02% / 69.61% / 50.05%. Considering that the company will benefit from the general trend of “sugar reduction” under the background of consumption upgrading, the natural sweetener business will enter a period of rapid growth. At the same time, the company is looking forward to overseas layout of industrial marijuana, The establishment of the largest industrial marijuana extraction plant in the United States is expected to fully enjoy the dividend of CBD application policy liberalization and maintain the “buy” rating.
Risk warning: the performance forecast / express report is only the preliminary accounting data, and the specific financial data shall be subject to the quarterly report / annual report disclosed by the company; Macroeconomic risk, technical risk, exchange rate fluctuation risk, epidemic risk; Policy risk; Strictly distinguish between industrial marijuana and intermediate marijuana, recreational marijuana and drugs, and resolutely oppose the legalization of recreational marijuana; At present, China has never approved industrial marijuana for medical use and food addition.
