Ternary organism (301206)
It grew rapidly in 2021, stabilized in 2022q1 and maintained the "overweight" rating
In 2021, Sanyuan biology achieved a revenue of 1.675 billion yuan, a year-on-year increase of 113.9%, and a net profit attributable to its parent company of 535 million yuan, a year-on-year increase of 130.2%; In 2022q1, the revenue was RMB 273 million, a year-on-year increase of 3.46%, and the net profit attributable to the parent company was RMB 63 million, a year-on-year decrease of 9.64%. Due to the intensified competition in the industry, we lowered the profit forecast for 20222023 and added a new profit forecast for 2024. It is expected to achieve a net profit of 510 (- 2.5), 620 (- 1.8) and 730 million yuan respectively, down 4.6%, up 20.5% and 18.7% respectively. The current share price corresponds to 18.8, 15.6 and 13.1 times of PE. The company is the industry leader with good long-term growth potential and maintains the "overweight" rating.
The revenue industry is booming in 2021, and 2022q1 is affected by intensified competition and epidemic in the short term
The company's erythritol products grew rapidly in 2021, with a revenue of 1.567 billion yuan, a year-on-year increase of 153.9%; Erythritol compound sugar products achieved an income of 74 million yuan, a year-on-year decrease of 52.3%, but the proportion was relatively small. The rapid growth of sugar free beverage industry has driven the high prosperity of erythritol industry. The company has arranged production capacity expansion in advance to achieve high-speed growth of revenue. In 2022q1, the revenue increased by 3.46% year-on-year and the gross profit margin decreased by 11.6pct, mainly due to the off-season sales in the first quarter, weak demand due to the impact of the epidemic, as well as the capacity expansion of competitors and the decline of product prices. In 2022q1, the net profit attributable to the parent company was 62.766 million yuan, and the net profit attributable to the parent decreased by 3.3 PCT. In 2022q1, all expenses of the company remained stable, of which the financial expense rate decreased by 1.5pct, mainly due to the increase of interest income; In addition, the use of over raised funds to achieve an investment income of 15.16 million yuan, which also contributes to the net profit.
The sugar substitute industry has broad prospects and good long-term growth potential
Erythritol has obvious comprehensive advantages and is favored by downstream food and beverage brands. China's sugar free and low sugar beverage industry has entered a prosperous period of industrial development. In the future, the industry penetration is expected to increase rapidly, and the strong demand in the downstream is expected to drive the continuous growth of erythritol industry. With the arrival of the peak summer season, short-term company sales are expected to pick up. Over the years, the company has deeply cultivated erythritol and derivatives, and has grown into a global industry leader. Through studying the process links, the company has mastered a number of patents and raised funds on the market. The 50000 ton erythritol production expansion project is gradually put into operation. At the same time, the company strengthens the research and development of new products to ensure sustainable growth in the future.
Risk tips: food safety risk, increased market competition risk, raw material price rise risk, covid-19 epidemic repeatedly affecting downstream demand risk.
