\u3000\u3 China Vanke Co.Ltd(000002) 562 Brother Enterprises Holding Co.Ltd(002562) )
In 2022q1, the net profit attributable to the parent company after deducting non-profit was 92 million yuan, with a year-on-year increase of 836.58%. The company released the first quarter report of 2022. During the reporting period, the total operating revenue was 879 million yuan, a year-on-year increase of 27.54%; The net profit attributable to the parent company was 103 million yuan, a year-on-year increase of 826.02%; The net profit attributable to the parent company after deduction was 92 million yuan, a year-on-year increase of 836.58%; The basic earnings per share was 0.10 yuan, compared with 0.01 yuan in the same period last year. The performance growth was mainly due to the gradual release of the production capacity of “hydroquinone phase I project”, the rise in the price of some vitamins and chromium salt products and the increase in the gross profit margin of products.
Vitamin K3: the trend of industry competition is better, and the acquisition of CISA ensures the stable supply of raw materials. According to Boya Hexun, after the market competition in the past few years, the competition pattern of vitamin K3 is relatively stable. At the same time, due to the restriction of the supply of raw material sodium dichromate, the market concentration tends to increase in the later stage. By acquiring 100% equity of lanxesscisa in 2019, the company effectively ensured the continuous and stable supply of raw material sodium dichromate and relatively low cost. Since 2022, due to the shortage of raw materials and the sharp rise of production costs, the product quotation has continued to rise. According to wind data, as of May 20, 2022, the market quotation of vitamin K3 was 190 yuan / kg, a year-on-year increase of 171.43% and an increase of 11.76% over the beginning of the year. At present, the company has a production capacity of 3000 tons of vitamin K3, which will directly benefit from the increase in product prices.
Calcium pantothenate: the market is highly concentrated, and the price rises sharply due to the tight supply of raw materials and production. Due to the cyanide containing wastewater generated in the production process of calcium pantothenate, there is a great pressure on environmental protection. Under the increasingly strict environmental protection policy, the competitiveness of new entrants in the industry in terms of production continuity and cost is insufficient. In addition, affected by the fluctuation of raw material supply, the output of the industry is mainly concentrated in the leading enterprises. According to Boya Hexun, the concentration of the top six suppliers in the calcium pantothenate market in 2021 is about 90%. Since 2022, affected by the shortage of raw material supply and production and the rise in raw material prices in some factories in China, the quotation of calcium pantothenate products has been rising all the way. According to wind data, as of May 20, 2022, the market quotation of calcium pantothenate was 360 yuan / kg, up 407.04% year-on-year and 171.70% over the beginning of the year. At present, the company has a capacity of 4000 tons of calcium pantothenate, which is expected to significantly benefit from the increase in product prices.
The product matrix is constantly enriched, and multiple businesses continue to contribute to performance in large quantities. 1) The main project of the company’s essence sector is the “construction project with an annual output of 20000 tons of hydroquinone and 31100 tons of hydroquinone derivatives”, which is constructed in two phases. Phase I was officially completed and put into operation in the second half of 2020, and the vanillin and ethyl vanillin produced have been officially sold to major food and daily chemical customers in Europe and America. According to the announcement on May 17, the company has officially started the construction of “hydroquinone phase II project”. In the future, with the completion and operation of phase II, it is expected to further improve the comprehensive competitiveness of the company’s “hydroquinone” industrial chain. 2) The main new project in the pharmaceutical sector of the company is the “construction project with an annual output of 1000 tons of iodine contrast agent and its intermediates”. The project is divided into two phases. The production capacity of iodine contrast agent bulk drug in phase I is 400 tons. The main products include iohexol, iopanol, iodofol and iodixazole. It was completed and officially put into operation in the fourth quarter of 2020, and gradually increased in volume in 2021.
Profit forecast. We estimate that the net profit of the company from 2022 to 2024 will be 404 million yuan, 451 million yuan and 507 million yuan respectively, and the corresponding EPS will be 0.38, 0.42 and 0.48 yuan respectively. With reference to the valuation of comparable companies, 20 times PE will be given in 2022, corresponding to the target price of 7.61 yuan, and the rating of “better than the market” will be given for the first time.
Risk warning. The price of raw materials fluctuated sharply, the downstream demand was less than expected, and the progress of projects under construction was less than expected.
