\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 298 Angel Yeast Co.Ltd(600298) )
Event: the company released the first quarterly report of 2022. In 22q1, the company achieved a revenue of 3.03 billion yuan / + 14.1%, a net profit attributable to the parent of 310 million yuan / – 29.3%, and a deduction of 260 million yuan / – 36.1%.
Yeast business maintained positive growth under the pressure of high base, and overseas growth accelerated month on month. 1) In terms of products, the company’s 22q1 yeast and deep-processing products achieved a revenue of 2.21 billion yuan / + 4.2%, sugar production achieved a revenue of 360 million yuan / + 160.8%, packaging achieved a revenue of 110 million yuan / + 8.9%, dairy products achieved a revenue of 20 million yuan / + 23.9%, and other businesses achieved a revenue of 310 million yuan / + 18.0%; The growth rate of the company’s yeast main business has slowed down. On the one hand, it is related to the high base of last year, on the other hand, it is related to the company’s price increase and intensified competition: ① although the price increase announced by competitors in the early stage is close to that of the company, the actual price increase is lower than that of the company, and some competitors seize the market; In addition, after the price increase of 21q4, the channel paid in advance and hoarded goods also had an impact. ② Due to the high shipping cost of competitors, some of the previous export capacity is currently digested in China, and the industry competition is intensified. 2) In terms of regions, the company achieved revenue of 2.17 billion yuan / + 13.2% in 22q1 China and 830 million yuan / + 16.4% overseas. The steady growth rate of 21q4 overseas is expected to be related to price increase and overseas business development.
The gross profit margin increased month on month, mainly due to the price increase effect. The company achieved a gross profit margin of 26.7% in 22q1, a year-on-year increase of -6.6pct. 1) The low gross profit sugar making business of 22q1 company accounts for 12.1% vs 21q1 accounts for 5.3%. The increase in the proportion of sugar making business has a downward effect on the gross profit margin of the company; 2) On a month on month basis, the company’s 22q1 gross profit margin increased by 4.9pct on a month on month basis compared with 21q4, which is expected to be mainly due to the more comprehensive manifestation of the price increase effect: ① the price increase effect of 21q4 is not fully reflected because the company began to raise prices successively at the end of September 21 and there are factors such as promotion transition; ② On the cost side, we judge that there is still a certain pressure. At the initial stage of exploitation, some high-priced molasses are warehoused, which affects the weighted average cost of molasses and sea freight / energy cost, which remain high, and the RMB appreciated slightly quarter on quarter.
Looking forward to Q2, there are many influencing factors on the income side, but on the whole, with the gradual reduction of the pressure on the high base, we expect the revenue growth rate to accelerate month on month from Q2. Factors affecting revenue include: 1) on the one hand, competitors have further raised prices since March; on the other hand, we expect the company will take certain market measures to deal with the current sales situation, and the competitors’ market share may be improved; 2) Since April, there have been divergent epidemics in many places, or accelerated destocking of local regional inventories and an increase in the proportion of small package sales; 3) Xinjiang’s production capacity began to be relocated in March 22, which may have a volume impact, but the company has previously accelerated production and preparation hedging. On the profit side, it is suggested to pay attention to the implementation of price increase, shipping cost, exchange rate, depreciation and amortization brought by production capacity launch and the impact of promotion.
In the medium and long term, the development space is worth imagining. We are optimistic about the release of profit elasticity in the later stage, and grasp the layout opportunity of the current decline in valuation. On the revenue side, the company raised its revenue target of 15-17 billion in the 14th five year plan to 20 billion. The expansion of overseas production capacity is expected to accelerate. There is a broad space for yeast derivatives business, and the long-term space is worth imagining. On the profit side, at present, the company is facing many pressures such as molasses, shipping costs, RMB appreciation and capacity investment. If the subsequent factors gradually improve, the profit elasticity is expected to be released; Taking shipping costs and RMB exchange rate as an example, if the subsequent shipping costs and RMB exchange rate return to normal, it is expected to contribute nearly 20% of the profit elasticity; And after the smooth export link, China’s current competition situation is expected to be improved. At present, the company’s valuation has fallen, so it is suggested to grasp the layout opportunity.
Profit forecast and investment suggestions
Due to the increase in the proportion of the company’s sugar making business, the company adjusted its EPS forecast of 1.69/2.20/2.61 yuan for 22-24 years (1.86/2.34/2.69 yuan before adjustment), gave a 22-year 30 times PE valuation using the historical valuation method (taking the average of nearly three years), corresponding to the target price of 50.70 yuan, and maintained the “buy rating”.
Risk tips
The price rise fell short of expectations, the cost rose sharply, the centralized production capacity investment brought significant depreciation, the production capacity investment was less than expected, the situation in Russia and Ukraine, and the exchange rate fluctuated
