\u3000\u3000 Angel Yeast Co.Ltd(600298) (600298)
Event:
The company has announced several projects to be implemented, among which Chinese projects include the intelligent transformation project of 10000 tons / year yeast sub assembly line in Angel Yichang Park, 150000 tons / year hydrolyzed sugar deep processing project of Liuzhou company and 150000 tons / year hydrolyzed sugar deep processing project of Chongzuo company. Overseas projects include the expansion project with an annual output of 20000 tons of yeast products of Egyptian company and the expansion project with an annual output of 8000 tons of yeast products of Russian company.
Key investment points:
Overseas projects were restarted to alleviate the shortage of supply and accelerate the expansion of overseas market share. Since 2020, due to the impact of overseas epidemic, the company's foreign project construction has been at a standstill for a time. The two overseas projects continued to advance earlier than expected. Recently, the company announced that it plans to invest 513 million yuan and 202 million yuan respectively in the construction of Egypt phase II and Russia phase II projects, of which: 1) Egypt phase II: it plans to expand the annual output of 15000 tons of dry yeast and ye0 50000 tons, to be completed and put into operation in 2024. Previously, the total capacity of dry yeast of Egyptian company was 23000 tons, and the annual capacity of Ye was 12000 tons. It has been in full production since 2021, and the demand gap for yeast and ye in the area covered by Egyptian factories is expected to exceed 25000 tons. 2) Russia phase II: it is planned to expand 8000 tons of dry yeast, 3000 tons of food raw materials and 13000 tons of liquid fertilizer and feed, which will be put into production in December 2023. The existing capacity of Russian companies has been reduced to 23000 tons, and the capacity utilization rate has reached 115%. The capacity supply is relatively tight. After the overseas projects are put into operation, they can meet the growing demand gap of yeast in the regional market, and use the regional advantages to consolidate and further expand the market share in the EU, the Middle East, Latin America and other regions.
Build Yichang small packaging yeast project to give full play to the advantages of intensive production. The company plans to invest 140 million yuan to build a small packaging yeast production line with an annual output of 10000 tons in Yichang's existing plant (phase II). It is planned to start construction in February 2022 and put into operation in September of the same year. With the continuous growth of the demand for home baking yeast, the company has a strong demand for small packaging yeast with high gross profit, which has become one of the largest single products with the strongest profitability of the company. However, since the small packaging production lines are scattered in factories all over the country, on the one hand, the construction of the project can ensure the future demand growth and supply of small packaging yeast, on the other hand, it can also reduce transportation costs, improve the advantages of large-scale production, improve product quality and reduce the risk of forgery through intensive production. Future projects can also carry out flexible design, taking into account the production of other new products.
New Liuzhou and Chongzuo hydrolyzed sugar projects will be added to solve the problem of tight supply of molasses in China for a long time. The company's main raw material for yeast production is molasses. China's molasses supply is relatively rigid, while China's yeast demand and alcohol demand have increased since 2020, resulting in a rapid rise in molasses prices since the second half of 2020, reaching nearly 1700 yuan / ton at the highest. Therefore, the company plans to invest in two 150000 ton deep-processing projects of hydrolyzed sugar in Liuzhou and Chongzuo, both of which use broken rice as fermentation raw materials. The total investment of the two projects is 65 million yuan. It is expected to start construction in April 2022 and the construction period is three months. The 150000 ton hydrolyzed sugar project of Yichang plant previously announced by the company will also start construction in March 2022 and put into operation in May of the same year. The hydrolyzed sugar produced by the company can replace part of the demand for molasses raw materials, stabilize the purchase price of molasses and reduce the production cost of yeast. Recently, the price of molasses began to fall, and the price fell to about 1265 yuan / ton. The cost pressure of the company was relieved in 2022.
Profit forecast and investment rating: as a leading enterprise in the yeast industry, the company has accelerated its production capacity layout under the situation of increasing demand for yeast and its derivatives at home and abroad. In the future, it is expected to further improve its market share at home and abroad and continuously consolidate its leading position. We expect the company's net profit attributable to the parent company in 2021 / 2022 / 2023 to be RMB 1.388/1.692/2.003 billion, a year-on-year increase of + 1% / 22% / 18%, corresponding to eps1 67 / 2.03/2.40 yuan / share, pe34 / 28 / 24 times, with "buy" rating for the first time.
Risk tips: 1) the impact of the epidemic exceeded expectations; 2) The price of raw materials rises too fast; 3) The production capacity is lower than expected; 4) Political turmoil in overseas markets; 5) Repeated overseas epidemics have hindered the project; 6) Exchange rate fluctuations, etc.
