The sugar substitute beverage Yuanqi Forest, which young people have picked up, has not yet been listed, but the sugar substitute supplier behind it has taken a step ahead.
On August 11 last year, the ternary creatures passed the meeting. Today (February 10), Sanyuan Bio officially landed on the ChiNext board of the Shenzhen Stock Exchange, with an issue price of 109.30 yuan / share, and the highest touched 146 yuan / share in the morning session, with a maximum increase of about 34%.
As of the noon close on February 10, the share price of Sanyuan Bio was about 136.27 yuan per share, an increase of 24.68%, corresponding to a market value of about 18.381 billion yuan.
The net profit margin of this "sugar generation Mao" is more than 30%, the net profit in 2018-2020 has tripled, and in the updated prospectus, Sanyuan Bio expects the net profit to continue to double in 2021.
Among the many sugar generations, how did erythritol stand out? With the aura of erythritol and yuan qi forest, how far can the ternary creatures go?
The protrusion of erythritol
1, the sweetness that human beings cannot give up
For health reasons, many foreign countries have introduced taxes on sugar to reduce people's intake of sugar. Latin American countries started earlier, Mexico, Chile and other countries began to levy "sugar tax" as early as 2014, and European countries such as France and the United Kingdom also began the "sugar tax" process in 2017-2018.
But because of the important position of sweetness in human life, human beings' pursuit of safer "sweetness" has never stopped.
Artificial sweeteners have actually been invented for more than 100 years. As early as 1879, the first generation of sweeteners - saccharin has been born, but at present because of the safety is questioned, few manufacturers have produced and used it. After that, it went through two, three, four, and five generations of sweeteners, and by 1993, the sixth generation of sweeteners had appeared.
Saccharin, cyclamate, aspartame and acesulfame potassium, sucralose are all artificial sugar substitutes, and the most classic product is sugar-free cola.
Regarding side effects, it has only been found that patients with the rare disease of phenylketonuria cannot metabolize the components of aspartame, need to be banned, and for the average person, there is no other harm.
But there are also studies that suggest that these sugar substitutes may affect the gut microbiota, altering microbial composition. In addition, it may also be because sugar substitutes always "lie about military information" to the body, there is sweetness but no real sugar comes in, and in the long run, there may be a decrease in insulin sensitivity and sugar metabolism disorders. However, the latter statement is also commonly refuted.
The first five generations of sugar generations are basically high-power sweeteners, and natural sweeteners such as stevia are also high-power sweeteners. Sugar alcohol sugar substitute products have very low sweetness.
For comparison, if the sweetness of sucrose is defined as 1, then the sweetness of aspartame is as high as 200, the sweetness of stevia is also 200, the sweetness of saccharin is 500, and the sweetness of the sixth generation of new sweet is as high as 6000.
In contrast, erythritol has a fairly low sweetness of only 0.65. In terms of "sweetness and cost performance" (sweetness/ yuan), erythritol can be said to be the lowest cost performance of all sugar substitutes on the market.
However, in terms of taste, although stevia is highly sweet, it will have a distinctly bitter aftertaste, and even if it is made into a compound sweetener, it is difficult to eliminate. Erythritol is clearly superior in taste.
In the sugar alcohol, erythritol is safer because the molecular weight is smaller, so at least 90% of the erythritol is how to eat it and how to excrete it, and it will not be metabolized in the body. At present, the united Nations Sugar Farmers' Organization has no restrictions on the amount of erythritol.
2, low calorie, anti-caries, mainly used in sugar-free food
Erythritol, whose scientific name is 1,2,3,4-butanetetraol, is a tetracarboitol that is widely present in nature, such as melons, grapes, animal plasma, eyeball crystals, etc., its presence can be seen.
As a sweetener, erythritol has many advantages: almost zero calories, high tolerance, good physical properties, and even caries resistance.
After erythritol enters the human body, it does not participate in the metabolism of sugar, most of it (allegedly more than 80%), is excreted with urine, almost does not produce heat or cause changes in blood sugar, and can remain stable in high temperature environments. And according to the research of oral medicine experts, erythritol plays a significant role in inhibiting the growth of oral bacteria such as Streptococcus morphophyllum and Lactobacillus, so it can play a role in protecting teeth.
In production, erythritol is made from glucose fermentation, and the upstream raw materials mainly include glucose and corn starch sugar and corn used to produce glucose, as well as ammonium salts, yeast extracts and other excipients.
Downstream mainly includes the food and beverage industry such as sugar-free beverages, candy chocolate, flavored sugar, table sugar, etc., in addition, it can also be used in the production of some cosmetic products and chemical products.
With various advantages, erythritol has become the sweetener leader in the new generation of sugar-free foods.
Erythritol can be prepared by two methods: microbial fermentation method and chemical synthesis method, and the current industrial production uses microbial fermentation method.
Erythritol is in strong demand and the competition pattern is more concentrated
Under the background of the sought after sugar substitute and the significant advantage of erythritol component specificity, the scale of the industry has also ushered in a rapid increase.
1. The output of the supply side has gradually increased, and the proportion of erythritol has increased
From the supply side, erythritol industrial production, started in the early 90s of the last century in Japan, Japan's Nikken Chemical has an annual output of 1000 tons of production line, since more than ten years, with the slow expansion of downstream applications, Japan's Niken Chemical Company erythritol production capacity gradually increased, Japan's Mitsubishi Chemical Company, Cargill, Belgium Cerestar and other companies to build some new erythritol production capacity, erythritol industry has gradually developed in the world.
In terms of product type, the number of sugar-free/low-sugar beverages, bread and dairy products listed globally grew at a COMPOUND annual growth rate of 28%, 20% and 15%, respectively.
According to LP Information, Inc. research data, the global erythritol market size in 2019 is about 225.6 million US dollars, about 1.579 billion yuan, compared to xylitol, the current overall size of the market is still small.
A new generation of natural sweeteners such as erythritol, steviol glycosides and monk fruit sweeteners, on the basis of meeting people's sugar reduction needs, with "green" and "natural" as the highlights, the yield growth rate is significantly higher than that of traditional aspartame, acesulfame potassium and other sweeteners. China is the world's largest sweetener producer, from 2015 to 2019, the proportion of erythritol in the output structure of China's sweetener subdivision category is increasing year by year, with 51,200 tons in 2019.
2. The demand for sweet ingredients has increased, and the demand for sweet ingredients will exceed 1 million tons in 2030
From the demand side, the current global sweet ingredient market is still dominated by sucrose, synthetic sweeteners and other sweeteners account for only 10%, the industry penetration rate is low, and high-quality artificial sweeteners such as sucralose, which has a significant advantage in cost performance, are expected to drive all kinds of sweetener products to further develop the market and accelerate the process of sucrose substitution in the future.
From the perspective of downstream products, the intensive launch of sugar-free types of sparkling water in 2020 has been respected by consumers, and various tastes and brands have gathered to launch new products.
However, among all kinds of sweetener products, the output of saccharin and cyclamate with safety hazards still accounts for 58%, and will be phased out in the future. Since sweeteners require multiple compounds to be used, there is a low chance that erythritol will be completely replaced.
The compound use of erythritol and sucralose can play a comprehensive effect of coordinating taste, customized sweetness and publicizing concepts, and has broad prospects for future application.
Huaan Securities analysts respectively used the total consumption of Erythritol in China and the United States in 2019 divided by the total population of the country in that year to obtain per capita erythritol consumption in 2019, optimistically estimating that the average consumption of Chinese reached the level of the United States in 2019 in 2025, calculating that the average annual compound growth rate should be about 55%. In 2025, China's total consumption of erythritol will reach 159,700 tons, and in 2030 it will reach 1,461,600 tons; neutral estimates will reach the level of the United States in 2019, and the average annual compound growth rate should be about 27%, corresponding to the market space of China's erythritol in 2025 of 130,800 tons, and 1,197,600 tons in 2030.
3, high industrial concentration, fierce competition, China is the main producer
In terms of the competitive landscape, erythritol has a high degree of industrial concentration, with CR3 reaching 74% and CR5 approaching 95%, with high barriers to entry and fierce competition.
According to Sullivan research data, in 2019, the production of erythritol by ternary bio accounted for 54.90% of the total domestic erythritol production and 32.94% of the global total output, making it the largest enterprise in the global erythritol industry.
This also makes China a major producer and exporter of erythritol in the world.
Yuanqi Forest jumped to the first major customer, and its net profit doubled by 3 times in 2 years
Sanyuan Biotech, the predecessor of Sanyuan Biotech, was established in January 2007 and changed to a joint-stock company in 2012. Before the production of erythritol, Sanyuan Bio was originally a clothing fabric manufacturer under the leadership of founder Nie Zaijian, and after 2004, it registered Sanyuan Home Textile.
However, with the listing on the New Third Board in 2015, Nie Zaijian officially led Sanyuan on the road of transformation and quickly rose to become the world's largest producer of erythritol.
At the end of 2020, Sanyuan Bio submitted a prospectus to the CSRC, and it has officially passed the meeting in early August and will soon land on the ChiNext board.
Since its inception, Ternary Bio has focused on the research and development and production of erythritol. According to the prospectus, as of the pre-IPO founder Nie Zaijian held about 61.25% of the shares, which was the company's largest shareholder and actual controller.
Source: Prospectus
According to Sullivan research data, in 2019, the company's erythritol production accounted for 54.90% of the total domestic erythritol production and 32.94% of the global total output, making it the largest enterprise in the global erythritol industry. On the basis of consolidating the dominant position of erythritol industry, the company conforms to the trend of market application changes, launches new varieties such as monk fruit compound sugar, stevia compound sugar, sucralose compound sugar, etc., and actively promotes the research and development and trial production of new sweetener products to meet the differentiated needs of consumers with richer product varieties.
Among them, compound sugars include monk fruit compound sugar, stevia compound sugar and sucralose compound sugar, etc. Since 2019, the company's compound sugar production and sales have increased significantly.
From 2018 to 2020, the company's operating income was 292 million, 477 million and 783 million yuan respectively, of which the main business income accounted for 88.67%, 94.71% and 98.65% respectively.
In addition, Sanyuan Bio expects its revenue in 2021 to be 1.57 billion yuan to 1.67 billion yuan, an increase of 100.96% -113.07% year-on-year; net profit is 490 million yuan to 540 million yuan, an increase of 111.96% - 132.63% year-on-year, and the main business maintains a rapid growth rate.
Looking at the specific division of the main business, erythritol accounts for 95.47%, 63.22% and 79.88% of the main business income, respectively, and the income brought by compound sugar after 2018 has significantly increased in the total revenue.
According to the source of customers, in 2020, Sha Luoya (headquartered in Osaka, Japan) is the company's largest customer, accounting for about 20% of revenue, and Yuanqi Forest ranks third in the top five customer lists; and according to the prospectus, in the first half of 2021, Yuanqi Forest has leapt to the company's largest customer, in addition, Nongfu Mountain Spring, Coca-Cola, Xicha, Immalang and other well-known enterprises have also become important customers of the company.
From the perspective of profitability, from 2018 to 2020, the gross profit margin of the main business of Ternary Bio was 37.45%, 46, 53% and 42.24%, respectively, which took into account the implementation of the new revenue standard (the freight into the cost) in 2020, so the gross profit margin was reduced, if according to the comparable gross margin, the gross profit margin in 2020 should be 45.53%.
From the perspective of specific products, the gross profit margins of erythritol and compound sugars are comparable, both at 40%+. However, in general, compound sugars are value-added services, so in general, the gross profit margin will be slightly higher than erythritol.
The level of specific gross profit margin is more related to the unit cost of erythritol.
In terms of net profit, in 2018-2020, Sanyuan Bio achieved a net profit of 68.09 million yuan, 136 million yuan and 233 million yuan respectively, and with the addition of sugar substitute new drinks becoming popular, the net profit of Sanyuan Bio in 2020 has increased to 3.4 times of the net profit in 2018, and the net profit margin is as high as 30%.
In addition, the company disclosed the semi-annual report forecast in the prospectus. The company expects that in the first half of 2021, the operating income will be between 743 million yuan and 772 million yuan, and the net profit attributable to the mother will be between 227 million yuan and 239 million yuan, achieving rapid growth year-on-year.
In the prospectus, Sanyuan Bio defines its competitors as: Bowling Treasure, Jinhe Industry and Zhejiang Huakang.
However, among the three companies, only Bowling's product line is the closest to Ternary Bio, with sugar alcohol as one of the main products. The fist product of Jinhe Industry is sucralose, while Zhejiang Huakang is mainly based on functional sugar alcohols such as xylitol and sorbitol, which is the second largest xylitol enterprise in the world.
First of all, take Bowling Bao as an example, its sales revenue from erythritol in 2020 is about 407 million yuan, although there is a big gap compared with the 773 million yuan of ternary biology, but the growth rate is also maintained at 66.66%.
However, from the perspective of gross profit margin, Ternary Bio is the absolute king. In 2020, Bowling's gross profit margin was only 8.90%, while the gross profit margin of Ternary Bio was as high as 42.69%. This data is far more than Baolingbao, but also more than two other sugar generation manufacturers: Jinhe Industry and Zhejiang Huakang.
The main reasons for The low gross profit margin of Bowling Bao include: 1, erythritol accounts for a low proportion of its operating income, only about 20% in 2020; 2, Bowling Bao's customers and Ternary Biology basically coincide, the price difference is not large, but there is a big difference in cost control.
Tsnary biology's fixed assets, energy power, etc. are all owned, but Bowling Bao needs to be purchased, so it is only a single comparison of erythritol, and Baolingbao only has a gross profit margin of about 15%, which is far from 42% of Tsnary Biologics.
The outlook is not entirely clear
1. Erythritol also has limitations
At present, the attitude of major international regional institutions to sugar substitutes is relatively positive and objective.
European Food Safety Authority EFSA
There is now enough scientific information to prove that, like other sugar substitutes, strong sweeteners can make blood sugar rise less after eating (compared to sugar).
U.S. Food and Drug Administration FDA
Strong sweeteners are commonly used as sugar substitutes. They are many times sweeter than sucrose, so they contribute zero or very few calories. Like other food ingredients used in the United States, strong sweeteners must be proven safe.
As mentioned earlier, erythritol has many advantages, including stable properties, good tolerance, no blood sugar and insulin fluctuations, and even anti-caries effects.
But just last week, the "Shanghai Disease Control" public account published an article on the harm of eating sugar substitute foods. It has also been confirmed that a relatively safe sugar substitute like erythritol also has a small part left in the intestine, which may have an impact on the microbiota.
Source: Shanghai Cdron Public Account
Whether the safety of sugar substitutes can be verified in ongoing scientific research experiments is still unknown.
In addition, the industry has been rumored that the first half of the sugar substitute battlefield is the dispute between acesulfame potassium and aspartame, and the second half of the sugar substitute is the contest between erythritol and sucralose.
In fact, some beverage companies such as South Korea's LINGTEA have used sucralose as a sugar substitute. Many companies are also adding sucralose In addition, steviol glycosides are also strong competitors. Steviol glycosides are extracted from stevia, although slightly bitter, but equally calorie-free, stable at high temperatures, and 100-450 times sweeter than sucrose.
Therefore, although erythritol is currently an optimal solution, it is not the only solution, and as scientific research progresses, if new positive or negative properties are discovered, resulting in changes in the safety perception of erythritol, the status may be shaken.
2. The limitations of ternary organisms themselves
In the early days, the market for erythritol was not hot and the supply was small, so Ternary Bio made a smooth transition from home textiles; but in the long run, as the track became hot, more and more players entered.
On the one hand, this brings about the overall release of production capacity, and the customer structure of Ternary Biologics may be subverted; on the other hand, the supply side is strengthened, and the ex-factory unit price of erythritol may also face a decline.
In terms of customers, Ternary Biology and Bowling Bao almost coincide, and at present, Bowling Bao does not have the problem of fighting a price war with Ternary Biology, but whether the overall larger Baolingbao will continue to increase, it is still unknown.
On the other hand, pressure from Sucralose producer Jinhe Industrial is also increasing. Jinhe has gained a pricing advantage in the Acesulfax oligopoly pattern, and as it increases the production capacity of sucralose, it may repeat itself in other areas in the future.
Increasingly fierce competition is inevitable, can the ternary creatures laugh to the end and become "substitute sugar mao"? Let's wait and see.