\u3000\u30 China Baoan Group Co.Ltd(000009) 30 Cofco Biotechnology Co.Ltd(000930) )
Event overview
The company released the annual report of 2021. During the reporting period, the operating revenue was 23.469 billion yuan, a year-on-year increase of 17.88%, and the net profit attributable to the parent company was 1.133 billion yuan, a year-on-year increase of 91.06%. At the same time, it is proposed to distribute a cash dividend of 2.45 yuan (including tax) to all shareholders for every 10 shares based on 1865273596 shares. In the fourth quarter alone, the company achieved a revenue of 5.412 billion yuan and a net profit attributable to the parent company of 192 million yuan. The company released the first quarterly report of 2022. During the reporting period, the company achieved an operating revenue of 5.38 billion yuan, a year-on-year decrease of 4.26%, and a net profit attributable to the parent of 349 million yuan, a year-on-year decrease of 1.90%.
Analysis and judgment:
The performance has made a good start in the 14th five year plan, and the leading position in the industry has been further consolidated. In 2021, the company achieved an operating revenue of 23.469 billion yuan, a year-on-year increase of 17.88%, and a net profit attributable to the parent company of 1.133 billion yuan, a year-on-year increase of 91.06%. During the reporting period, the global economy continued to be depressed, the epidemic in China repeatedly occurred, and the prices of raw and auxiliary materials rose. The company overcame the impact of adverse factors, continued to optimize the product structure, promote the upgrading and development of business, consolidate the leading position in the industry, achieve a historic breakthrough in operating performance “exceeding the same period, history, budget and expectation”, and achieve excellent results of operating revenue exceeding 20 billion yuan, net profit jumping to 1 billion level and roe exceeding 10%, Usher in the grand development of the 14th five year plan. Specifically, in terms of fuel ethanol and its by-products, during the reporting period, the revenue was 11.151 billion yuan, a year-on-year increase of 15.94%; In terms of starch and its by-products, during the reporting period, the revenue was 4.352 billion yuan, a year-on-year increase of 4.78%; In terms of sugar, the revenue was 3.447 billion yuan, up 37.34% year-on-year; Monosodium glutamate and its by-products achieved a revenue of 1.234 billion yuan, a year-on-year increase of 10.25%; Citric acid, its salts and by-products achieved a revenue of 1.136 billion yuan, up 60.30% year-on-year; Oil achieved a revenue of 761 million yuan, up 3.93% year-on-year.
The leading position of corn deep processing is stable, and multiple measures are taken to control costs and improve profitability. The company is a leading enterprise in China’s corn deep processing. During the reporting period, affected by multiple factors, corn and other grain prices were high. In order to prevent and control the risk of sharp fluctuations in corn market prices, the company dynamically adjusted its raw material procurement strategy, built inventory at a low price at the initial stage of corn listing, reduced inventory at a high price, and realized inventory appreciation income; At the same time, we closely tracked the price comparison between foreign cassava and domestic corn. The imported cassava exceeded 200000 tons, effectively reducing the cost of raw materials. During the reporting period, the price of corn was high, but the overall gross profit margin of the company increased by 0.73 PCT to 11.19%. In addition to the cost of raw materials, the company also promoted cost reduction through intensive process technology. During the reporting period, starch sugar enterprises promoted high concentration liquefaction and high concentration saccharification technology, reducing the unit cost by more than 30 yuan / ton. Through energy-saving technical transformation, the unit steam consumption was reduced by 34% ~ 50%. In addition, the sales volume of the company’s special products also achieved rapid growth. During the reporting period, the sales volume of “xiaotexin” syrup mainly promoted exceeded 100000 tons, with a year-on-year increase of more than 40%. We believe that the company is a leading enterprise in China’s corn deep processing, which has occupied a considerable market share. At the same time, the company reduces costs through raw material procurement control and refining technology, and meets the personalized and differentiated needs of customers by upgrading products, which is expected to further open up the market and improve the overall profitability of the company.
“Double carbon” boosted the explosive growth of the industry and the business of degradable materials was promoted in an orderly manner. The “double carbon” policy and the concept of green development have attracted more and more attention. The demand for eco-friendly biodegradable materials has increased rapidly, and the industry has broad prospects. The company’s biodegradable materials business mainly includes PHA, polylactic acid, polylactic acid modified materials and polylactic acid products. The company actively responds to the relevant national policies to promote plastic pollution control, vigorously develops and reserves technologies related to biodegradable materials, and has a mature production line of polymerization, modification and polylactic acid products. During the reporting period, in order to improve the integrity, systematicness and economy of the biodegradable material industry, the company first started the construction of a 30000 ton lactide project to open up the whole industrial chain of polylactic acid. COFCO biomaterials (Yushu) Co., Ltd. was registered on December 20, 2021 to orderly promote the construction process of the project; Second, the construction of 1000 ton PHA production unit in Yushu began in August 2021. In general, the 1000 ton PHA project will be put into trial operation in the first half of this year, and then the process will be further optimized and adjusted to make the products meet the market demand; The company’s 30000 ton lactide project is also progressing smoothly. At present, it is mainly engaged in the negotiation and type selection design of imported core equipment, as well as the handling of overall safety assessment and environmental assessment procedures. We believe that under the background of national 3060 carbon peak and carbon neutralization, the company’s biodegradable materials business ushers in a policy dividend period. In the future, with the implementation and operation of the project, it is expected to contribute new performance growth points and increase the company’s profits.
Investment advice
Our analysis: (1) in terms of corn deep processing, the company’s industry position will be further consolidated, and the advantages of leading enterprises will be further revealed; (2) In terms of bioenergy business, the rise of oil price is good for the business development of the company; (3) In terms of biodegradable materials, the “double carbon” strategy promotes the explosive growth of the industry, and the company’s related businesses face broad market prospects. Based on this, we raised the company’s operating revenue from 28.506/31.905 billion yuan to 29.801/33.794 billion yuan in 22-23 years, increased the operating revenue for 24 years to 37.862 billion yuan, increased the net profit attributable to the parent from 1.473/1.782 billion yuan to 1.486/1.809 billion yuan in 22-23 years, and increased the predicted net profit attributable to the parent for 24 years to 2.230 billion yuan, The EPS of 22-23 years was raised from 0.79/0.95 yuan to 0.80/0.97 yuan, and the EPS of 24 years was predicted to be 1.20 yuan. The stock price was 8.21 yuan on April 29, 2022, corresponding to 10 / 8 / 7X PE of 22 / 23 / 24 years respectively, maintaining the “buy” rating.
Risk tips
Covid-19 pneumonia epidemic risk, oil price fluctuation risk and excessive increase of corn price.
