\u3000\u3000 Cabio Biotech (Wuhan) Co.Ltd(688089) (688089)
Event: the company issued the restricted stock incentive plan (Draft) for 2022. It plans to grant 1.8 million restricted shares, accounting for 1.50% of the total share capital of the company, and the grant price is 29.26 yuan / share.
The incentive plan aims to mobilize the enthusiasm of the core team and highlight the development confidence of the company: according to the announcement, the incentive plan will grant no more than 1.6 million shares for the first time, reserve 200000 shares, and the incentive objects granted for the first time will not exceed 48, accounting for about 12.83% of the total number of employees of the company at the end of 2020, including directors, senior managers Middle managers and core technical (business) backbone personnel. The award price is 29.26 yuan, which is determined according to 50% of the average stock trading price of 58.51 yuan in the previous 20 trading days. The core team of the company undertakes the important task of continuous R & D and innovative development, and provides competitive incentive measures to enable the company to take the initiative in the competition for outstanding talents in the industry. Part of the assessment requirements granted in this incentive plan for the first time are based on the company’s operating revenue in 2021. The target values of performance assessment in 2022-2024 (100% at the company level) are: the revenue growth rate in 2022 ≥ 25%, the cumulative revenue growth rate in 2022 and 2023 ≥ 180%, the cumulative revenue growth rate in 2022-2024 ≥ 380%, and the trigger values of performance assessment (80% at the company level) are ≥ 15% ≧160%、≧340%。 Based on the target value, that is, the growth rate of the company’s revenue from 2022 to 2024 should reach 25%, 24% and 29% respectively.
The company’s market space for ARA and DHA has been opened and its continuous expansion strength is strong: in February 2023, China’s new standard for infant formula milk powder will be implemented. The new national standard adds the minimum amount of DHA, and Ara requires the same amount to be added. According to coherentmarketinsights, it is estimated that the annual compound growth rate of the global ara + algal oil DHA market scale from 2018 to 2026 will be 13.45%; According to the estimates in the company’s in-depth report previously released by us, under the influence of the new national standard, China’s growth rate is expected to reach 40% and 50% in 2022 and 2023. According to the announcement, the company is an important pioneer and market promoter of China’s ara industry, with a global market share of about 10% and a Chinese market share of about 50%; DHA accounts for about 3% of the global market. The company has a production capacity of 420 tons of oil agent ARA and 105 tons of algal oil DHA. The IPO raised investment project plans to add 50 tons of oil agent ARA and 450 tons of algal oil DHA. The company expects to be completed in December 2022. After being put into operation, the company’s DHA products will grow to a considerable volume of Ara. At the same time, when DSM ara patent expires in 2023, the sales scope will no longer be limited, and the company is expected to open up a new sales space.
SA products will become the next vigorously developed variety of the company: the new regulations on cosmetics supervision have been implemented in 2021, requiring that new cosmetics raw materials can be used only after being registered by the drug regulatory department of the State Council. SA (avoic acid) of the company became the first batch of new cosmetic raw materials announced and approved by the State Food and Drug Administration in June 2021, and it is also the only supplier of new cosmetic raw materials for SA. The absolute advantage of exclusive supply will promote the rapid development of SA products, and SA is expected to become an important growth pole of the company. The research and development of the company’s SA is in the subsidiary Zhongke Optical Valley. In early 2021, the company acquired the remaining equity of Zhongke Optical Valley to make it a wholly-owned subsidiary, which fully reflects the company’s determination to develop SA.
Investment suggestion: it is estimated that the net profit of the company from 2021 to 2023 will be 145 million yuan, 190 million yuan and 250 million yuan respectively, and the corresponding PE will be 52, 40 and 30 times respectively, maintaining the Buy-A rating.
Risk warning: raw material price fluctuation, lower downstream demand than expected, etc.
