\u3000\u3 China Vanke Co.Ltd(000002) 001 Zhejiang Nhu Company Ltd(002001) )
Event:
On April 27, Zhejiang Nhu Company Ltd(002001) released the first quarterly report of 2022: in the first quarter of 2022, the company achieved an operating revenue of 4.308 billion yuan, a year-on-year increase of 13.66% (after adjustment) and a month on month increase of 0.61%; The net profit attributable to shareholders of listed companies was 1.203 billion yuan, with a year-on-year increase of 5.18% (after adjustment) and a month on month increase of 25.59%; The gross profit margin reached 41.55%, a year-on-year decrease of 6.59 percentage points and a month on month increase of 2.71 percentage points; The net interest rate reached 28.04%, a year-on-year decrease of 2.44 percentage points and a month on month increase of 5.62 percentage points.
Key investment points:
Q1 performance grew steadily and profitability improved month on month
In Q1 2022, the company’s performance increased steadily, including revenue of 4.308 billion yuan, a year-on-year increase of 13.66% (after adjustment) and a month on month increase of 0.61%; The net profit attributable to the parent company was 1.203 billion yuan, with a year-on-year increase of 5.18% (after adjustment) and a month on month increase of 25.59%. The company’s performance has achieved stable growth over the same period last year, mainly considering the improvement of product production and sales. Among them, the company’s new 100000 t / a methionine project and Heilongjiang biological fermentation project (phase I) were completed at the end of 2020 and are in the early stage of production in the first quarter of 2021. With the gradual decline of production capacity, the new production capacity started stably in the first quarter of 2022 and the benefits were released significantly. Compared with Q4 in 2021, the company’s net profit attributable to the parent company has increased significantly. On the one hand, due to the slight reduction of cost side pressure, the company’s gross profit margin reached 41.55% in Q1 in 2022, an increase of 2.71 percentage points month on month; Meanwhile, in Q1 2022, the company’s asset impairment loss and non operating expenses decreased month on month, driving the improvement of the overall net profit.
In terms of period expense ratio, the company’s sales / management / financial expense ratio in 2022 and Q1 was 0.53% / 7.81% / 1.59% respectively, with a year-on-year ratio of -2.46 / + 0.91 / – 0.43pct and a month on month ratio of + 0.10 / – 1.41 / – 0.36 PCT; Meanwhile, the net cash flow from Q1’s operating activities in 2022 reached 422 million yuan, a year-on-year decrease of 61.03%, mainly due to the increase in the purchase of raw materials and preparation during the reporting period.
Vitamin E boom continues, the company will fully benefit
After years of layout and development, the company’s nutrition business has been in a leading position in China and well-known abroad, and has become one of the four major vitamin manufacturers in the world. Among them, the production capacity of vitamin A is 8000 tons / year (500000 IU), and the production capacity of vitamin E is 60000 tons / year (50% powder). Affected by the sluggish operation of some manufacturers in the industry and the rise in raw material prices, the price of vitamin E has continued to rise since 2021. In 2021, the average market price of vitamin E reached 80.44 yuan / kg, a year-on-year increase of 24.0%. Since 2022, the price of vitamin E has remained rising. As of April 27, the average market price of Q2 vitamin E in 2022 reached 90.0 yuan / kg, a year-on-year increase of + 14.96% and a month on month increase of + 2.09%. As a leading vitamin enterprise, the company will fully benefit from the high prosperity of vitamin E.
New projects continue to be promoted, and the production of Caron anhydride and azabicyclic acid is imminent
The company actively expanded new projects. By the end of the first quarter of 2022, the company’s projects under construction had reached 3.724 billion yuan, accounting for 26.09% of its fixed assets. Among them, the projects currently under construction include 150000 T / a methionine production line project, 30000 T / a taurine project, 7000 T / a PPS phase III project, 5000 t / a menthol, 6000 T / a vitamin B6, 3000 t / a vitamin B12, 500 t / a carbonic anhydride and 500 t / a azabicyclic acid. At present, the construction of various projects is progressing smoothly. Among them, Kalon anhydride and azabicyclic acid are expected to be put into operation in the second quarter of this year and begin to contribute to the performance increment; Meanwhile, taurine, PPS, menthol, vitamin B6, vitamin B12 and other projects are also expected to be put into trial operation this year. With the gradual implementation of new projects, the company will show high growth.
The profit forecast and investment rating predict that the net profit attributable to the parent company from 2022 to 2024 will be RMB 5.333 billion, 6.142 billion and 7.031 billion respectively, corresponding to PE of 12.7, 11.1 and 9.7 respectively, maintaining the “buy” rating.
