\u3000\u3 China Vanke Co.Ltd(000002) 597 Anhui Jinhe Industrial Co.Ltd(002597) )
On April 28, 2022, the company announced the first quarterly report of 2022. In the first quarter, the operating revenue was 1.898 billion yuan, a year-on-year increase of 66.91%; The net profit attributable to the parent company was 442 million yuan, a year-on-year increase of 110.21%; The net profit deducted from non parent company was 453 million yuan, with a year-on-year increase of 128.69%, and the performance was in line with expectations.
The simultaneous rise in volume and price led to a high increase in performance in the first quarter. According to the announcement of the company, the high performance of the company in the first quarter is mainly due to the fact that the project with an annual output of 5000 tons of sucralose has reached full production in the first quarter of 2022. Compared with the same period of last year, the production capacity, output, sales volume and sales price of sucralose have increased by different ranges. At the same time, due to the rising production costs of food additive products and bulk chemicals, the company timely adjusted the product prices by different ranges. The gross profit margin of the company increased significantly in the first quarter. In 2022q1, the gross profit margin was 34.26%, an increase of 5.28 percentage points year-on-year and 2.28 percentage points month on month; The net interest rate was 23.28%, up 4.82 percentage points year-on-year and down 2.1 percentage points month on month.
The prices of main products of food additives still increased year-on-year, and the export volume and price rose simultaneously. According to the data of Baichuan Yingfu, in 2022q1, the prices of sucralose, acesulfame, methyl maltol and ethyl maltol increased by 131.15%, 51.02%, 28.74% and 14.73% respectively year-on-year, and the chain growth rates were 6.52%, – 4.6%, – 17.75% and – 35.42% respectively. As of April 27, 2022, the average prices of sucralose, acesulfame, methyl maltol and ethyl maltol increased by 124.45%, 31.99%, 15.79% and 14.46% year-on-year respectively, and the average prices of Q1 increased by – 2.9%, 4.6%, 10.06% and 0% month on month respectively. In terms of export, according to the data of Baichuan Yingfu, China’s export volume of sucralose in the first quarter increased by 96.75% year-on-year and 21.34% month on month, and the average export price increased by 95.59% year-on-year and 7.6% month on month. In the first quarter, the export volume of ansaimi increased by 58.69% year-on-year, decreased by 1.88% month on month, and the average export price increased by 59.20% year-on-year and 21.21% month on month.
To realize the extension of vertical integration, the company continues to build a moat of cost advantage. The company is committed to the vertical extension of the industrial chain. At present, the company has realized the self-production of important raw materials in the upstream of acesulfame, sucralose and methylethyl maltol, such as diketene, sulfoxide chloride and furfural, which is conducive to reducing the cost fluctuation caused by the company’s purchased raw materials. According to the company’s annual report, in order to give full play to the competitive advantage of the fist product sucralose, the company decided to go to the horse to produce 30000 tons of DMF project. At present, the company is promoting relevant administrative examination and approval. In addition, the company’s sulfoxide chloride phase II project has started construction, and the main project has been completed. At the same time, the company accelerated the land reserve of phase II project of Dingyuan circular economy industrial park, so as to lay a foundation for the construction of phase II project of Dingyuan base.
Investment suggestion: we believe that under the consumption concept of “Zero sugar and low calorie”, the company’s demand for sweeteners is expected to continue to grow. In addition, the company has actively extended vertically to the upstream of the industrial chain in recent years, producing important raw materials by itself, and the products have cost advantages. It is expected that in the future, due to environmental protection and other factors, the new capacity of sucralose may be limited, and the price of sucralose is expected to remain relatively high in 2022. The basic earnings per share of the company in 2022 and 2023 are expected to be 2.96 yuan and 2.98 yuan, and the current price earnings ratio of the stock price corresponding to 2022 and 2023 is 13 times and 13 times, maintaining a cautious recommended rating.
Risk warning: risk of weakening downstream demand; Risk of product profit decline due to sharp fluctuations in the price of upstream raw materials; The risk of intensified industry competition; Risk that the progress of projects under construction and proposed projects is less than expected; Natural and man-made disasters and other force majeure events.
