On April 6, Cathay Biotech Inc(688065) ( Cathay Biotech Inc(688065) , SH) released its 2021 annual report. In 2021, the company achieved an operating revenue of about 2.197 billion yuan, an increase of 46.77% year-on-year; The net profit attributable to the shareholders of the listed company was about 608 million yuan, a year-on-year increase of 32.82%.
The reporter of the daily economic news noted that the gross profit margin of Cathay Biotech Inc(688065) in 2021 decreased Cathay Biotech Inc(688065) said that due to the change of accounting policy in 2021, the transportation fee was transferred from the sales expense to the cost of main business. At the same time, due to the rise of raw materials and international freight, the gross profit margin decreased by 7.33 percentage points.
In addition, Cathay Biotech Inc(688065) has a lot of cash and contributed a lot of interest income to it in 2021.
gross profit margin has declined
The main reasons for the growth of polyamide products such as long chain and long chain are main reasons for the growth of polyamide products
In terms of the composition of operating revenue, in 2021, the operating revenue of Cathay Biotech Inc(688065) the long-chain dicarboxylic acid series products was about 2 billion yuan, and the operating revenue of bio based polyamide series products was about 150 million yuan.
“Long chain dicarboxylic acid is traditionally produced by chemical method. In the market competition in recent years, the traditional chemical method of long chain dicarboxylic acid represented by NVIDIA (mainly DC12 lauric acid, etc.) Gradually withdraw from the market since the end of 2015. Long chain dicarboxylic acid series products produced by biological manufacturing method gradually dominate the market due to their outstanding advantages in economy and green environmental protection. The company is the leading global supplier of biological long-chain dicarboxylic acid. ” Cathay Biotech Inc(688065) scalep align=”center” style=”text-align:center;”> Image source: Cathay Biotech Inc(688065) 2021 annual report screenshot
According to the annual report of Cathay Biotech Inc(688065) 2021, without a new production line, the production capacity of its long-chain dicarboxylic acid system products increased from about 44000 tons last year to about 59000 tons, a year-on-year increase of 35.42%, and the capacity utilization rate increased from 58.53% to 79.27%. At the same time, the sales volume also increased from about 43000 tons to about 61000 tons, a year-on-year increase of 42.49%.
However, from the perspective of gross profit margin, the gross profit margin of Cathay Biotech Inc(688065) the long-chain dicarboxylic acid series products in 2021 was about 42.33%, a decrease of 5.03 percentage points compared with the previous year. With the addition of bio based polyamide series products and other products, the overall gross profit margin of Cathay Biotech Inc(688065) in 2021 decreased by about 7.33 percentage points compared with the previous year.
For the decline of gross profit margin, Cathay Biotech Inc(688065) gives the explanation as follows: the reclassification of transportation costs, the rise of raw materials and international freight.
According to Cathay Biotech Inc(688065) 2020 annual report, the logistics and transportation expenses in 2019 and 2020 are about 60 million yuan and 50 million yuan respectively.
According to Cathay Biotech Inc(688065) prospectus, the raw materials of biological long-chain dicarboxylic acid are mainly alkanes. It is worth noting that alkane prices are vulnerable to oil prices Cathay Biotech Inc(688065) in the risk prompt, it is mentioned that “affected by the international situation, there is a risk of sharp rise in the price of oil and raw materials, which may affect the cost of the company’s products.”
Looking to the future, Cathay Biotech Inc(688065) means: “In terms of long-chain dicarboxylic acid, DC11-DC18 products continue to dominate the global market. In 2021, the negative impact of covid-19 epidemic weakened, and the company’s long-chain dicarboxylic acid revenue increased; the company laid out new types of long-chain dicarboxylic acid products, and the biological sebacic acid DC10 will be put into trial operation in the first half of 2022; with the large-scale production of the company’s bio glutamine, the consumption of long-chain dicarboxylic acid in long-chain nylon and other fields is expected to increase.”
nearly 10 billion cash contributed 210 million interest income
Although the gross profit margin declined, there was little difference between the growth rate of Cathay Biotech Inc(688065) the net profit and the growth rate of operating revenue in 2021. One of the important reasons is that Cathay Biotech Inc(688065) achieved interest income of about 210 million yuan in 2021. It is also because of this interest income that the financial expenses of Cathay Biotech Inc(688065) 2021 were about – 180 million yuan, compared with – 10 million yuan in the previous year.
The reporter of the daily economic news noted that by the end of 2021, the monetary capital of Cathay Biotech Inc(688065) was about 9.6 billion yuan, accounting for about 59% of its total assets.
Cathay Biotech Inc(688065) the reason why it has such a huge amount of cash is related to its initial offering and investment absorption by its subsidiaries. In 2020, Cathay Biotech Inc(688065) landed on the scientific innovation board. Data show that Cathay Biotech Inc(688065) raised about 5.56 billion yuan. In 2021, Cathay Biotech Inc(688065) received about 2.88 billion yuan in cash from investment, all of which came from the cash received by subsidiaries from minority shareholders.
The cash received from these two investments constitutes the main part of Cathay Biotech Inc(688065) monetary funds, and also contributes a large amount of interest income to it in 2021.
Image source: Cathay Biotech Inc(688065) 2021 annual report screenshot
According to the annual report of Cathay Biotech Inc(688065) 2021, there are 13 subsidiaries included in the scope of consolidated statements, of which Cathay Biotech Inc(688065) controls about 50.125% of the equity of Kaisai (Taiyuan) biomaterials Co., Ltd., Kaisai (Taiyuan) Biotechnology Co., Ltd. and Kaisai (Taiyuan) Biotechnology Co., Ltd., and the rest are 100% controlled.
In November 2020, Cathay Biotech Inc(688065) and Shanxi transformation Industrial Park Group Co., Ltd. jointly established Kasai (Taiyuan) Biotechnology Co., Ltd., Kasai (Taiyuan) Biotechnology Co., Ltd. and Kasai (Taiyuan) biomaterials Co., Ltd.
“As of the issuance date of the annual report, the company has invested 4.010 billion yuan in the above three companies and completed the subscribed capital contribution. The actual capital contribution of Shanxi transformation Industrial Park Group Co., Ltd. is 3.984 billion yuan.” Cathay Biotech Inc(688065) means.
