\u3000\u3 China Vanke Co.Ltd(000002) 597 Anhui Jinhe Industrial Co.Ltd(002597) )
Event: the company released the first quarter report of 2022 on April 28, 2022. In 2022q1, the operating revenue was RMB 1.898 billion, with a year-on-year increase of 66.91%, the net profit attributable to the parent company was RMB 442 million, with a year-on-year increase of 110.21%, and the net profit deducted from the non parent company was RMB 453 million, with a year-on-year increase of 128.69%.
Comments:
Product prices are booming, and Q1 performance has increased greatly. The operating revenue increased by 67% in 2022q1 due to: on the one hand, the project with an annual output of 5000 tons of sucralose reached full production, and the year-on-year production capacity, output and sales volume increased significantly; On the other hand, affected by the rising cost caused by the continuous rise in the prices of bulk raw materials and energy, the company raised the price of some products. According to wind, the average market prices of Acer honey, sucralose and maltol, the main products of 2022q1 company, were 83000 yuan / ton, 430000 yuan / ton and 99000 yuan / ton, up 45%, 109% and 13% respectively year-on-year. Meanwhile, the advance payment of 2022q1 company increased by 101% year-on-year, mainly because the company is expected to continue its profits in order to ensure the supply of raw materials and lock the price, so as to reduce the risk of price rise and tight supply.
Demonstrate the company’s confidence in patent investigation and repurchase. On March 20, 2022, the company passed the proposal on share repurchase plan of the company, which plans to use its own funds of no less than 75 million yuan (inclusive) and no more than 150 million yuan (inclusive) to repurchase the company’s shares in the form of centralized bidding for the later implementation of employee stock ownership plan or equity incentive, and the share repurchase price shall not exceed 55.00 yuan / share, The term of share repurchase shall be within 12 months from the date when the company’s board of directors deliberates and approves the share repurchase plan. After the implementation of annual equity distribution in 2021, the upper limit of share repurchase price is adjusted to 54.36 yuan / share. Repurchasing shares with its own funds is intended to be used for employee stock ownership plan or equity incentive to demonstrate the confidence of the company.
In 2016, Celanese company of the United States filed an application with the US International Trade Commission, claiming to investigate the infringement of its patent right on the specific high sweetness sweeteners, preparation methods and downstream products exported to, imported and sold in the United States by the company and its subsidiary Jinhe, involving the sweetener product potassium acetylsulfonate (i.e. “Acesulfame”) produced by the company. On April 6, 2022, the company announced the announcement on the termination of the investigation involving the 337 investigation of the U.S. International Trade Commission, which showed that after the investigation, the U.S. International Trade Commission found that the sweetener product ansamir produced by the company did not violate the “337” provisions and there was no infringement. After getting rid of the risk of patent investigation, the leading position of the company’s products is more stable.
The project under construction will expand production and expand products, and the leading sweetener can be expected in the future. In recent years, the company has gradually completed the strategic transformation from basic chemical industry to fine chemical industry dominated by sweeteners and spices. At present, it has 12000 T / a ansamir and 8000 T / a sucralose production capacity, accounting for more than 65% and 60% of the total global production capacity respectively; If the project under construction with an annual output of 5000 tons of methyl ethyl maltol is put into operation, the maltol production capacity is expected to account for 50% of China’s total.
In addition to synthetic sweeteners, the company also expands to natural sweeteners and sugar alcohol products. In January 2022 Anhui Jinhe Industrial Co.Ltd(002597) reached a strategic cooperation agreement with yikelai Biotechnology (Shanghai) Co., Ltd., a synthetic biology platform enterprise, to jointly promote the commercial application of synthetic biology technology in the fields of natural sweeteners and sugar reduction of food raw materials. The company’s 1500 ton pilot line of alodonose is under construction. Since China has not yet approved its use, it is expected to be exported to European and American countries in the future. The sweetness of alodonose is about 70% of sucrose. At the same time, it can replace the sugar used in baked foods because of Maillard reaction. In addition, the company has obtained the EIA approval for supporting 30000 T / a DMF for sucralose, and 40000 t / a sulfoxide chloride is in the stage of equipment installation. With the formation of the concept of health and the vigorous development of sugar substitute drinks, the company, as the leader of sweeteners, will fully benefit and usher in greater development.
Profit forecast: Based on the high prosperity of the main products acesulfame, sucralose and maltol is expected to continue, the expected contribution of the price of prepayment locked raw materials to the profit and the production of thionyl chloride, we raised the net profit attributable to the parent company from 2022 to 2024 to 2.02 billion yuan, 2.36 billion yuan and 2.712 billion yuan respectively (the original value is 1.808 billion yuan, 1.938 billion yuan and 1.86 billion yuan), and EPS to 3.6 yuan, 4.21 yuan and 4.83 yuan respectively, giving a “buy” rating.
Risk warning: product price falls; Risks of environmental protection and safe production; Capacity construction and release did not meet expectations.
