\u3000\u3000 Meihua Holdings Group Co.Ltd(600873) (600873)
Event overview
The company issued the announcement of annual performance increase in 2021. During the reporting period, the company realized a net profit attributable to the parent company of RMB 2.3-2.4 billion, a year-on-year increase of 134% - 144%; The net profit deducted from non parent company was RMB 2.02-2.12 billion, with a year-on-year increase of 122% - 133%; The disposal of Shanxi Guangsheng pharmaceutical packaging Co., Ltd., a subsidiary of the company, generated an investment income of about 270 million yuan.
Analysis and judgment:
The demand has gradually warmed up, supporting the high growth of the company's performance
In 2021, benefiting from the gradual stabilization of the epidemic and the recovery of pig stocks, the performance of the company's flavor agent and feed amino acid sector showed a trend of simultaneous increase in volume and price. Specifically, in terms of flavor agent, the sales volume of the company's flavor agent increased significantly during the reporting period, mainly benefiting from the release of 250000 tons of monosodium glutamate production capacity of its subsidiary Jilin Meihua; Affected by the recovery of demand, the price increased significantly. In terms of amino acids, the stocks of downstream pigs recovered rapidly, and the demand for amino acids supported the continuous increase in the prices of lysine and threonine, promoting the release of the company's profits. In other businesses, the company's product layout is perfect, and the cost advantages of human medical amino acids, colloidal polysaccharides and other products are obvious. It also achieved good performance during the reporting period.
Increase both quantity and price, optimize food taste traits, and the product performance is bright
In 2020, affected by the covid-19 pneumonia epidemic, the downstream catering demand was depressed, the supply and demand pattern of the industry deteriorated, and the price of monosodium glutamate products also decreased significantly, which dragged down the optimization of food taste traits and put pressure on the product revenue of the company. In 2021, with the marginal weakening of the impact of covid-19 pneumonia epidemic, the recovery of catering demand has boosted the demand for monosodium glutamate products, and the price of monosodium glutamate has increased significantly. In addition, according to the company's announcement, the company's annual production capacity of 250000 tons of monosodium glutamate in Jilin Meihua was released, which not only consolidated the company's industry position, but also further thickened the company's profits. On the whole, the monosodium glutamate sector of the company shows a trend of simultaneous increase in volume and price. We believe that under the oligopoly competition pattern, the leading enterprises have the pricing power. Under the background of the improvement of demand month on month, the price increase of monosodium glutamate products is expected to be sufficient, which is expected to thicken the profit space of the company.
Amino acid prices have a strong driving force, capacity expansion and thickening the company's profits
Amino acid demand is closely related to the downstream pig stock. On the one hand, the downstream pig production capacity is growing rapidly. According to the data of the National Bureau of statistics, by the end of 2021, the stock of pigs and fertile sows increased by 10.5% and 4.0% respectively compared with the end of the previous year. The pig stock remains high, driving the demand for amino acids to improve. According to wind data, as of January 18, 2022, the price of lysine / threonine has increased by 48.42% / 26.19% compared with the low in August. In addition, the company's new phase III lysine project in Baicheng base is progressing smoothly. After it is put into operation, the company's lysine production capacity will reach one million, which will further consolidate the company's leading position in the field of amino acids and increase the company's profits.
Investment advice
The company's taste traits are optimized, and the product volume and price increase together. At the same time, the price rise of amino acids has a strong driving force, contributing to the company's profit elasticity. Taking into account the downward cost caused by the company's capacity expansion, we update the company's operating revenue from 2021 to 2023 to be 221.37/262.90/305.01 (the former value is 225.27/28468/33.069 billion yuan respectively), the net profit attributable to the parent company to be 23.67/27.75/33.58 billion yuan respectively (the former value is 17.51/23.70/29.84 billion yuan respectively), and the corresponding EPS to be 0.76/0.90/1.08 yuan respectively, Corresponding to the closing price of 7.40 yuan / share on January 19, 2022, PE is 10 / 8 / 7X respectively, maintaining the "buy" rating.
Risk tips
The recovery process of pig production capacity was less than expected, the product sales were less than expected, the price of corn, the main raw material, rose more than expected, and the policy was disturbed.
