\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 298 Angel Yeast Co.Ltd(600298) )
Event: Angel Yeast Co.Ltd(600298) released the first quarterly report of 2022. In 2022q1, the operating revenue was 3.032 billion yuan, a year-on-year increase of + 14.14%, the net profit attributable to the parent company was 313 million yuan, a year-on-year increase of – 29.30%, and the net profit attributable to the parent company after deduction was 265 million yuan, a year-on-year increase of – 36.09%, which was in line with the expectation.
The main industry of yeast is growing steadily and is expected to accelerate in the future. By product, the revenue of yeast and deep processed products / packaging / dairy products / sugar in 2022q1 was + 4.2% / + 8.9% / + 23.9% / + 160.8% year-on-year respectively; By region, the revenue of China / foreign markets in 2022q1 was + 13.2% / + 16.4% year-on-year respectively; By channel, offline / Online + 18.3% / + 6.8% year-on-year respectively; The slowdown in the growth of China’s main yeast industry is mainly due to 1) industry competition: the 2022q1 epidemic and high sea freight make it more difficult for Chinese yeast enterprises to export, and some enterprises export and sell to China, increasing the pressure of industry competition; 2) Large price increase in the early stage: the company raised the price of Chinese yeast products by about 19% in 2021, resulting in the diversion of some customers; 3) Capacity bottleneck: China’s yeast capacity is also a factor restricting large-scale production; Looking forward to the whole year of 2022, the target of 18% revenue growth is expected to be achieved. 1) industry competition is expected to ease: the pressure on sea freight has eased since Q2, superimposed with the marginal improvement of the subsequent epidemic, the export of Chinese yeast enterprises is expected to pick up, easing the competitive pressure of China’s yeast industry; 2) Benefit from the epidemic: since March, the epidemic has been repeated in China. Yeast is the beneficiary category of the epidemic, and its income and gross profit are expected to accelerate.
Cost pressure will drag down Q1 profit margin and Q2 will be improved. 1) The upward cost of molasses dragged down Q1’s profit: the gross profit margin / gross sales difference in 2022q1 were 26.7% / 20.0% respectively, with a year-on-year increase of – 6.6 / – 7.1pct, mainly due to the increase of molasses cost and sea freight, with a period expense rate of 14.8% and a year-on-year increase of + 1.5pct, including a sales / management expense rate of 6.7% / 3.2%, a year-on-year increase of + 0,5 / + 0.2pct and a net profit rate of 10.5% and a year-on-year increase of – 6.5pct; 2) The cost pressure in subsequent quarters is expected to ease gradually: according to wind data, the spot price of molasses in Nanning decreased from 1490 yuan / ton at the beginning of December to 1265 yuan / ton at the end of January. It rebounded in February, but the range is limited. Corresponding to the high cost of molasses used in 2022q1, the pressure on sea freight has also eased since Q2. Therefore, 2022q1 is a quarter with high cost pressure in the whole year, and the subsequent gross profit margin is expected to improve.
Investment advice. We maintain the previous profit forecast. It is estimated that the operating revenue from 2022 to 2024 will be RMB 126.5/146.1/16.78 billion, with a year-on-year increase of + 18.5% / + 15.5% / + 14.8%, and the net profit attributable to the parent company will be RMB 14.0/17.8/2.19 billion, with a year-on-year increase of + 6.6% / + 27.6% / + 23.1%. The current stock price corresponds to pe24 / 19 / 15 times, maintaining the “buy” rating.
Risk tips: the promotion of production capacity is less than expected, the cost of raw materials is higher than expected, and food safety risks.
