\u3000\u3000 Anhui Jinhe Industrial Co.Ltd(002597) (002597)
Report summary
Basic chemical industry started and became the leader of food additives. The company started with traditional basic chemicals such as nitrogen fertilizer. With the shift of China's economic growth and the increasing improvement of people's living standards, the company is determined to adjust its development strategy and focus on fine chemicals. With the ultimate cost advantage, through continuous transformation and expansion, the company has become a global leading enterprise of food additives such as Acer honey, sucralose and maltol. The company's downstream customers include all major food and beverage and flavors and fragrances. In terms of performance, from 2011 to 2020, the company's operating revenue increased from 2.29 billion yuan to 3.67 billion yuan, with an annual compound growth rate of 4.8%; In the same period, the net profit attributable to the parent company increased from 190 million yuan to 720 million yuan, with an annual compound growth rate of 14.5%, and the profit growth rate was much higher than that of operating revenue. With maltol, sucralose and other projects reaching production and contributing performance, the company's profit volume may reach a new level.
Sucralose ushered in a high boom, which further proved the Growth Logic of the company. By December 31, 2021, the price of sucralose had reached 480000 yuan / ton, an increase of 134.1% compared with August. Under the background of limited supply and good demand, the prosperity of sucralose is expected to continue. On the supply side, since 2011, the price of sucralose has fallen sharply, the outbreak of the epidemic has accelerated, and the backward production capacity of the industry has been cleared. At present, only Anhui Jinhe Industrial Co.Ltd(002597) , Kangbao biochemical and other enterprises can stabilize production. The latest document of the general office of the Ministry of ecological environment defines sucralose as "two high" industries. With the promotion of the policy, the supply of sucralose industry has become a high probability event. On the demand side, thanks to the rapid penetration of sugar free drinks and the iteration of sweetener product structure, the demand for high-quality Sweetener Sucralose increased better. Therefore, the company entered the revenue period in the layout of sucralose, and the growth logic was further confirmed.
Sugar substitutes have entered the stage of rapid development, and the long-term growth of high-quality sweeteners can be expected. According to the third quarterly report of Coca Cola in 2019, Coca Cola's sugar free products achieved double-digit growth for eight consecutive quarters, the categories of sugar free products continued to be rich, and the beverage giant continued to make efforts to substitute sugar market. With the improvement of life and health awareness, China's sugar free beverage market has entered the golden age, and the sugar free beverage brand represented by Yuanqi forest has developed rapidly. According to the data of dolphin society, the sales revenue of Yuanqi forest in 2020 was 2.7 billion yuan, a year-on-year increase of 309%. According to the 2021 China sugar free beverage market trend insight report, China's sugar free beverage market is expected to reach 22.74 billion yuan in 2025, with an annual compound growth rate of 14.6%. We believe that Acesulfame and sucralose have the advantages of high safety, easy control and low price sweet ratio, and the demand is expected to grow rapidly.
Build a biomass platform and "carbon neutralization" to ensure growth. Biomass is the general name of all biological organisms with various photosynthetic capacity. Biorefinery can be applied to energy, pharmaceutical intermediates, flavors and fragrances. As a manufacturing plant in the world, China has an arduous task of "carbon peak and carbon neutralization". As a renewable energy, promoting the resource utilization of biomass is an important starting point to realize "carbon neutralization". "Carbon neutralization" will help the development of enterprises using biomass as raw materials. Based on chemistry and biotechnology, the company builds a whole industry chain with biomass as raw materials in Dingyuan base. Among them, biomass cogeneration power generation, extending furfural to methylfuran ammonium salt and other products have been gradually put into operation. In the future, the company is expected to use biomass as raw material to continue to enrich food additives, flavors and fragrances and bio based new materials. Dingyuan base is expected to become the second growth pole.
Profit forecast: considering the rise in product prices, we expect the company's net profit attributable to the parent company from 2021 to 2023 to be RMB 1.04/16.2/1.75 billion respectively, compared with the previous value (RMB 1.04/15.1/1.72 billion), corresponding to PE of 23.9 times, 15.4 times and 14.2 times, maintaining the "buy" rating.
Risk tips: production problems such as lower than expected production capacity, sharp fluctuations in raw material prices, safety and environmental protection.
