\u3000\u30 Xuchang Ketop Testing Research Institute Co.Ltd(003008) 58 Beijing Scitop Bio-Tech Co.Ltd(300858) )
Event:
The company released the annual report and the first quarterly report. In 2021, the annual operating revenue reached 365 million, the same as + 7.51%; The net profit attributable to the parent company is 110 million, the same as + 13.42%; Deduct non net profit of 83 million, the same as - 8.36%; EPS 0.74 yuan / share, 5.00 yuan for every 10 shares (including tax). Among them, Q4's operating income was 96 million, the same as + 1.09%, and the net profit attributable to the parent company was 25 million, the same as + 2.77%. In 2022q1, the operating revenue was 86 million, the same as + 6.63%; The net profit attributable to the parent company is 23 million, the same as + 8.75%; Deduct the net profit not attributable to the parent company of 20 million, the same as + 3.69%.
Key investment points:
The decline of compound food additives business & the improvement of the company's three fees dragged down the company's performance, and the overall business structure was further optimized. In 2021, the income of compound food additives was 239 million yuan, the same as - 11.82%, accounting for 65.51%, and the gross profit margin was 45.60%, the same as -0.72pct. The reasons for the decline: (1) based on the strategic cooperation agreement with Mengniu, the price of products sold to Mengniu decreased; (2) Covid-19 pneumonia leads to fluctuations in end consumption and affects the company's sales scale. The income of edible probiotics was 75 million yuan, the same as + 128.63%, accounting for 20.46%, and the gross profit margin was 63.47%, the same as + 11.10 PCT. The improvement of downstream customers and end consumers' recognition of the company's probiotic products drove the continuous high growth of business in this sector. The income of animal and plant probiotics was 45 million yuan, the same as + 25.74%, accounting for 12.22%, and the gross profit margin was 56.10%, the same as -3.67pct. In 2021, the company achieved a non recurring profit and loss of 10 million yuan through the transfer of specific functions of strains & Technology authorization. This has become an important means for the company to expand its business, enhance customer stickiness and establish long-term strategic cooperation. It is expected that this model will gradually become normalized and occupy an important position in the overall business composition of the company in the future. In 2021, the company's sales / management / R & D expenses were 25 / 38 / 27 million yuan respectively, with a year-on-year increase of + 38.40% / + 70.51% / 54.50%. The increase of sales expenses is mainly due to the expansion of sales channels and sales team. The increase of management expenses is mainly due to the increase of wages and salaries and the provision of equity incentive expenses.
In Q1 2022, the probiotics sector accelerated again. In Q1 2022, the company's edible probiotics sector realized an income of 26.73 million yuan, the same as + 183%, which increased again. The income of animal and plant probiotics was 7.33 million yuan, the same as + 14.2%. Affected by the epidemic situation in Hohhot, the growth rate slowed down. According to the company's business plan, in 2022, the company will maintain the steady business of compound food additives, focus on promoting the growth of probiotic business, and strive to make the business proportion of probiotic products and animal and plant probiotics reach more than 50% of the company's overall sales scale.
Probiotic sector has a high view, with tob end as the focus and TOC end as the force. According to markets and markets, the global probiotic market is expected to reach US $61.1 billion in 2021 and maintain a compound growth rate of 8.3% in the next five years. Among them, the sales scale of probiotics in the Asia Pacific region is as high as 44.4%, showing a good development momentum. According to Euromonitor International, the current sales market scale of probiotics in China ranks the second in the world, with a rapid growth rate of 11-12% per year. At present, in China's Probiotic raw material market, the combined market share of DuPont and cohenson overseas is still more than 80%. Due to trade friction, technical blockade and the impact of the epidemic on international exchanges, China's large food enterprises have begun to seek alternative suppliers of probiotic raw materials in China, Beijing Scitop Bio-Tech Co.Ltd(300858) for a long time, they have focused on the construction of probiotic strain resource bank suitable for Chinese intestinal flora, At present, it has the largest strain resource library containing more than 20000 strains of lactic acid bacteria in Asia, including more than 120 strains of probiotics that have been industrialized, and core strains such as Lactobacillus casei Zhang and Bifidobacterium lactis V9, which provides highly competitive resources for the development of the company's b-end business. At present, Mengniu, Guangming and Shengmu Gaoke are the company's b-end customers. In terms of C-end, the e-commerce department was officially established in November 2021. The online business originally operated by dealers entrusted by the company was directly operated by the company, which is responsible for online channels such as tmall, jd.com and wechat stores. Offline, it focuses on the development of pharmaceutical enterprise agent processing, beauty industry and professional dealers, and makes joint efforts on C-end online and offline. It is expected that in the next 2-3 years, the sales of edible probiotic products will exceed that of compound food additives and become the business sector with the largest proportion of revenue, the strongest profitability and the most obvious competitive advantage in the market. The increase of the proportion of probiotic sector with high gross profit will help to promote the continuous upward performance of the company.
Animal and plant probiotics are still in the market cultivation period and have broad prospects in the future. The company's animal and plant microecological preparations belong to microecological feed additives. By regulating the intestinal flora of animals, improving the collective immunity of animals and improving the feed conversion rate, the company has significant economic benefits in livestock, poultry and aquaculture. They are an emerging industry in the feed additive industry and are still in the market cultivation period. With the continuous development of dairy cattle breeding and aquaculture products, the company will continue to improve its anti epidemic ability in the future.
It is planned to carry out fixed increase and promote raised investment projects to ensure capacity supply. In April 2022, the company announced the fixed growth plan, which plans to raise no more than 700 million yuan, of which 620 million yuan will be invested in the R & D and production base of the food sector. After completion, the company can achieve the annual productivity of 10000 tons of food ingredients, 400 tons of probiotic raw material bacterial powder, 100 tons of yogurt starter, 600 tons of epigenetic yuan and 1200 tons of probiotic end consumer goods. At present, the company's edible probiotic products factory in Jinhua, Zhejiang Province has been fully put into operation, with an average capacity utilization rate of more than 50% in 2021. The plant is expected to achieve full production in 2022. The orderly release of capacity provides a strong guarantee for the continuous high growth of the company's Probiotic business.
Profit forecast and investment rating: Based on the principle of prudence, the impact of additional issuance on the company's performance will not be considered for the time being. We expect the company to realize a net profit attributable to the parent company of 135 / 168 / 218 million yuan from 2022 to 2024, with a year-on-year increase of + 23% / + 25% / + 30%, EPS of 0.91, 1.13 and 1.47 yuan / share and PE of 25 / 20 / 15 respectively. Give "overweight" rating.
Risk Tips 1) intensified market competition; 2) The concentration of downstream customers is high and the demand is not urgent; 3) Uncertainty in the implementation of private placement; 4) The impact of the epidemic exceeded expectations; 5) Food safety risks.
