\u3000\u3000 Angel Yeast Co.Ltd(600298) (600298)
Announcement issued by the company: 1) announcement on the implementation of the expansion project of yeast products with an annual output of 20000 tons by the Egyptian company. The Egyptian subsidiary plans to implement the expansion project of yeast products with an annual output of 20000 tons: the project plans to produce 20000 tons of yeast (15000 tons of dry yeast + 5000 tons of Ye); The investment estimate is 510 million yuan, of which 30 million is the self owned capital of the Egyptian company and 480 million is financed by the Egyptian company with the assistance of the company; The project plans to complete the internal and external decision-making approval of the project implementation scheme before February 2022, start the construction after the issuance of the construction permit in April 2022, complete and put into operation in May 2024 and reach the production capacity in 2025; After the completion of the project, the average annual sales revenue increased by 330 million yuan, the average annual net profit was 50 million yuan, and the after tax financial internal rate of return of the project was 14.7%. 2) Announcement on the implementation of the expansion project of yeast products with an annual output of 8000 tons by Russian companies. The Russian subsidiary plans to implement the expansion project with an annual output of 8000 tons of yeast products: the overall plan is to expand the annual output of 8000 tons of dry yeast, 3000 tons of food raw materials, 13000 tons of liquid fertilizer and feed; The investment estimate is 200 million yuan, and the required funds are financed by the company, of which 120 million yuan is solved by increasing the capital of the Russian company and 80 million yuan is solved by borrowing; The project plans to complete the relevant approval procedures before March 2022, break the ground in May 2022, complete the trial operation in November 2023 and turn into formal production in December; The internal rate of return of the project is 20.8%, and the gross profit margin and net profit margin of sales are 33.6% and 20.7% respectively. 3) Announcement on Chongzuo company’s implementation of the deep processing project of hydrolyzed sugar with an annual output of 150000 tons. The company plans to adopt the broken rice hydrolyzed sugar process in the plant area of Chongzuo company to build a production line with an annual output of 150000 tons of 30% concentration hydrolyzed sugar and 6500 tons of crude protein powder; The project is expected to complete bidding and procurement before March 2022, start construction in April 2022, and complete commissioning and put into operation in June 2022. 4) Announcement on the implementation of the deep processing project of 150000 tons of hydrolyzed sugar by Liuzhou company. The project is planned to be carried out in the open space of Liuzhou company. The broken rice hydrolyzed sugar process is adopted to build a production line with an annual output of 150000 tons of 30% concentration hydrolyzed sugar and 6500 tons of crude protein powder; The project is expected to complete the overall scheme design and bidding procurement in March 2022; The construction started in April, and the commissioning was completed and put into operation in June.
The company’s overseas expansion has made steady progress. On the one hand, building factories overseas can reduce the costs of raw materials, logistics and tariffs, on the other hand, it is convenient for the company to respond to local consumer demand in time and improve product competitiveness, which is an important strategic measure for the company. Previously, the company’s factory expansion projects in Egypt and Russia were shelved due to the influence of government approval process and epidemic situation. At present, the restraining factors have been alleviated and the overseas expansion strategy has been promoted.
The determination to expand the production capacity of hydrolyzed sugar and stabilize the purchase cost of molasses is unprecedented. Combined with the previously announced Yichang hydrolyzed sugar project, the total capacity of the company’s hydrolyzed sugar projects in Yichang, Liuzhou and Chongzuo reaches 450000 tons (planned to be put into operation from May to June of 22). In the short term, we believe that this move will alleviate the cost pressure of the company for 22 years to a certain extent; In the long run, the company is expected to further explore the use of hydrolyzed sugar through this project, which is an important strategic measure for the company.
In short, on the one hand, in the past 21 years, the company has further deepened the reform under the pressure of the industry, with unprecedented efforts and determination in price increase, hydrolyzed sugar project construction and other measures, and the effect of the 22-year reform is expected to gradually appear; On the other hand, the company’s long-term strategies such as overseas expansion are also advancing steadily.
Profit forecast and investment suggestions
Taking into account the factors such as government subsidies and 21q4 shipping costs still maintaining a high level, the earnings per share of the company from 2021 to 2023 were adjusted to be 1.66/2.09/2.38 yuan respectively (1.68/2.10/2.36 yuan before adjustment). The historical valuation method was used to give a 22-year 33 times PE valuation (taking the average of nearly three years), and the corresponding target price was 68.97 yuan, maintaining the “buy rating”.
Risk tips
The price rise and landing were less than expected, the cost rose sharply, the centralized production capacity investment brought about significant depreciation, the production capacity investment was less than expected, the epidemic situation was repeated, the exchange rate fluctuated, and the production technology quality fluctuated
