\u3000\u3 China Vanke Co.Ltd(000002) 166 Guilin Layn Natural Ingredients Corp(002166) )
Event overview
The company released its annual report for 2021. During the reporting period, the company achieved an operating revenue of 1.053 billion yuan, a year-on-year increase of 34.40%; The net profit attributable to the parent company was 118 million yuan, a year-on-year increase of 37.74%. In the fourth quarter alone, the company achieved an operating revenue of 341 million yuan, a year-on-year increase of 0.27%; The net profit attributable to the parent company was 31 million yuan, a year-on-year increase of 54.72%. The company plans not to distribute cash dividends, bonus shares or increase share capital with provident fund.
Analysis and judgment:
The main business is growing at a high speed, and natural sweeteners anchor the profit contribution. During the reporting period, the company achieved an operating revenue of 1.053 billion yuan, yoy + 34.40%, which was mainly due to the substantial growth of consumer market demand, the accelerated improvement of supply side production process and application innovation ability, the favorable policies of governments and the effectiveness of M & a business. The comprehensive gross profit margin increased by 1.93pct to 29.8%. Specifically, the company’s plant extraction business has a good development momentum. During the reporting period, the plant extraction business achieved an operating revenue of 1.015 billion yuan, a year-on-year increase of 55.64%, accounting for 96.39% of the total operating revenue, and the revenue increased by 13.16% compared with the same period last year. The business was further focused, and the gross profit margin increased by 3.38pct to 28.10%. Among them, the natural sweetener business has a strong development momentum, realizing an operating revenue of 634 million yuan, a year-on-year increase of 54.86%, accounting for 60.15% of the total operating revenue, Become the main driving factor driving the rapid development of the company’s performance; BT project achieved an operating income of 20 million yuan, a year-on-year decrease of 81.88%, and the gross profit margin decreased by 2.38pct to 34.28%; Other businesses achieved operating income of 47 million yuan, yoy + 61.77%.
The plant extraction business was further focused, and the performance growth was driven by natural sweeteners. The company is mainly engaged in the production and operation of natural health products, and continues to focus on the extraction of plant functional components. During the reporting period, the business of plant extraction achieved an operating revenue of 1.015 billion yuan, with a year-on-year increase of 55.64%, accounting for 96.39% of the total operating revenue, and the revenue increased by 13.16% compared with the same period of last year. The business of plant extraction was further focused. With the popularization of health concept and the improvement of consumption level, consumers’ demand for health products is increasing. In recent years, “Zero sugar” and “zero fat” have become consumption hotspots, helping the company’s demand for natural sweetener products increase significantly. During the reporting period, the company’s natural sweetener business realized an operating revenue of 634 million yuan, a year-on-year increase of 54.86%, accounting for 60.15% of the company’s total revenue, which has become the main driving factor driving the rapid development of the company’s performance. We believe that after the completion of BT project, the company will focus on the main business of planting and improving, superimposing the continuous deepening of the concept of healthy life and healthy diet in the future. As a supplier with the highest production capacity and annual sales of natural sweeteners in the world, the company’s natural sweetener products will continue to increase the company’s profits based on the rising demand and scale advantages.
Industrial marijuana extraction has been implemented in an orderly manner, and new performance growth points can be expected in the future. In 2019, the general meeting of shareholders of the company approved the company’s investment in the construction of “industrial marijuana extraction and application engineering construction project” in the United States. In October 2021, the company’s industrial marijuana extraction plant was completed and put into trial operation. It is expected that the project will reach formal mass production before June 30, 2022. The application scenarios of industrial cannabis extract are very rich, basically covering the application scenarios of all plant extract products, such as dietary supplements, food, beverages, cosmetics, medicine, pet food and many other fields, with broad market prospects. The scale of CBD extraction plant of the company is the largest in the United States. Besides the company, there is no manufacturer in the United States to realize industrial marijuana industrial production and scale supply, which has a unique advantage of scale. In March this year, hemprise, a subsidiary of the company, signed an agreement of intent on entrusted processing with an industrial marijuana product provider in the United States. The implementation of the agreement will help further establish the company’s brand image in the field of industrial marijuana extraction and establish a more solid foundation for future market development, customer negotiation and other business cooperation. After the formal mass production, the industrial marijuana extraction products will be officially included in the company’s sales catalogue, which will help to promote the growth of operating revenue and contribute to new profit growth points.
Investment advice
Considering the impact of the epidemic on the company’s product demand rhythm, the promotion of health concept on the company’s main product demand and the contribution of mass production of industrial marijuana to the company’s revenue, we raised the company’s 22-year operating revenue from 1.147 billion yuan to 1.536 billion yuan, increased the 23 / 24-year operating revenue to 2.255/3.366 billion yuan, reduced the 22-year net profit attributable to the parent from 199 million yuan to 170 million yuan, and increased the 23 / 24-year net profit attributable to the parent to 281 / 486 million yuan, Adjusted the EPS of 22 years from 0.35 yuan to 0.30 yuan, increased the EPS of 23 / 24 years to 0.50/0.86 yuan, and the share price of 8.46 yuan on April 22, 2022, corresponding to the PE of 22 / 23 / 24 years to 30 / 18 / 10x respectively, maintaining the rating of “overweight”.
Risk tips
Epidemic risk, exchange rate fluctuation risk, policy disturbance risk, and the risk that the mass production of industrial cannabis extraction is less than expected.
