Rhine Biotech: On May 10, it was investigated by institutions, with the participation of CITIC Securities, Sequoia China and other institutions

Securities Star News, on May 11, 2024, Rhine Biotech (002166) announced that the company would accept institutional research on May 10, 2024, CITIC Securities Li Chao, Guo Keyu, Liu Wei, Sequoia China Yan Huichen, Penghua Fund Li Yunyi, Great Wall Life Insurance Jiang Wei, China Europe Fund Feng Yunpeng, Chunhou Fund Zhang Zhuoying, Guotai Fund Jiang Ying, Hang Seng Qianhai Fund Zhang Kun, Beijing Yutian Capital Wang Yutian, Soochow Securities Luo Diying, Fujian Haoshan Hong Jiarong, Huaan Securities Wang Qiangfeng Xu Si, Zhong Pestle of Gongqingcheng Xunqian Private Equity Fund, Tang Yutang of Guangdong Private Investment, Wang Rui of Guangdong Yuanqiao Private Equity Fund, Wu Wenqiao of Guangzhou Silver Shark Investment, Ding Bo of China Life Security Fund, Xu Rongzheng of Hangzhou Qianlu Investment, Wang Guizhou of Heji Investment Fund, Chen Sixu of Hunan Haopu Private Equity Fund, Liu Zhibing of Huatai Bairui, Sun Qianqian of Golden Eagle Fund, Tong Jie of Huafu Securities, Lu Zhi of Jingtai Lifeng Asset Management, Zhang Yun of Panhou Momentum Shanghai Capital, Ge Song of Shanghai Danyi Investment, Guo Yulei of Shanghai Guozan Private Equity Fund, Di Xiaofeng of Shanghai Jingxi Investment, Zhang Jilin of Shangshi Investment, Zhang Yuhang of Shenzhen Qianhai Chenxing Private Securities Investment Fund, Xiong Bin of Shenzhen Yihu Investment, Wang Xiangyu of Shibei Investment Management (Beijing), Wu Can of Sichuan Lomon Group, Wang Zhenming of Tianfeng Securities, Xu Zhicheng of Xinyuan Fund, Zhang Wangyue of Happy Life, Xie Feng of Zhengjin Capital, Zhan Shiqian of Nanshan Open Source Asset of Hengqin, Guotai Junan Shen Wei, Xu Yuankun of Guoyuan Securities, Cheng Zhongyao of Huaxi Securities, Li Yuan of China Securities Construction Investment Fund, and Mei Sizhe of Bosera Fund participated.

The details are as follows:

Q: Please ask the company's current overall layout and project progress in the synthetic biology business.

A: In 2022, the company officially incorporated synthetic biology into the company's strategic development direction, established a development pattern of natural extraction and biosynthesis dual technology routes, further enriched the product matrix, and empowered the company's formula output and customized application solution service capabilities, so as to enhance the breadth and depth of cooperation between the company and customers, especially strategic key customers. In 2022, the company established a wholly-owned subsidiary, Guilin Rheinland Synthetic Biotechnology Co., Ltd., to help the company build a leading domestic synthetic biotechnology achievement transformation base and create a new pattern for the global development of the company's natural health products business.

The overall layout of the company's synthetic biology business mainly focuses on four aspects

The first is capacity construction. The company positions its role as a "base for the transformation of synthetic biological achievements", and its R&D projects at this stage are mainly products that can be industrialized. In 2023, the company will officially start the construction of the synthetic biology workshop, which is expected to enter the stage of equipment commissioning and trial production in May and June, and is expected to be gradually put into use in the third quarter.

Second, in terms of R&D, the company and the team of Academician Chen Jian of the Future Food Science Center of Jiangnan University have reached a 5-year research cooperation on the development, application and industrialization of key technologies for the synthesis and manufacturing of natural sweeteners, mainly focusing on the two varieties of monk fruit and stevia, and the current R&D progress is in line with expectations, and the R&D project of monk fruit glycoside synthesis has successfully reached the first stage of research goals by the end of 2023, which means that the total synthesis technology route has been officially run; The research and development of synthetic biotechnology for some high value-added components of stevia has been realized, and the next step of research will be to further improve the commercialization ability of related technologies and reduce production costs.

Third, in terms of product transformation, there are currently two major products with the possibility of mass production: (1) some high-value components of stevia produced by enzymatic conversion process; (2) The bio-polysaccharide products innovatively developed by Chengdu Saidike, a holding subsidiary of the company.

Fourth, in terms of intellectual property rights and qualification applications, up to now, the company has held a total of 7 patents related to synthetic biology, and some domestic and foreign patents are in the acceptance and application stage; At the same time, the company is also actively preparing for the application of FD GRS, domestic new food raw materials, new feed additives and other related qualifications in combination with the progress of product research and development.

Q: Could the company briefly introduce the Chengdu CCDICO team, as well as its biopolysaccharide and peptide products?

Answer: The main management of Chengdu CCDICO's start-up team has mastered the leading R&D technology in the field of polysaccharides, peptides and other related products, and the company is optimistic about the application value and future development of polysaccharides and peptide products based on the rich experience in the selection of products in the plant extraction industry. In recent years, the company has supported the team's R&D work through step-by-step capital increases, and officially obtained control of Chengdu CCDICO in 2023, hoping to build it into the company's synthetic biology R&D and sales platform for non-sweeteners. At present, the subsidiary has two major products, polysaccharides, which have the effects of moisturizing, anti-inflammatory, improving immunity, repairing mucous membranes, promoting wound healing, regulating metabolism, etc., and can be widely used in skin care, food and beverage, health care products, animal nutrition and other fields. Peptides, with anti-superbug and other functions, will mainly develop in the direction of drugs in the future, and the company has held relevant patents.

Q: Does the company have a clear target for the synthetic biology business? Is there a clear expectation of revenue?

Answer: First of all, in terms of product transformation, the company has basically made it clear that in the second half of this year, it will gradually carry out the mass production of polysaccharides and enzyme-to-steviol glycosides, and issued a sales performance target for the business. In terms of qualification application, the company will accelerate the completion of relevant efficacy and safety evaluations, and is expected to submit certification applications for FD GRS and new food raw materials and new feed additives within the year. In terms of peptide products, preclinical trials will be carried out step by step, and clinical approval is planned to be obtained within three years.

Q: What is the company's R&D progress in the synthesis of mogrosides in biotechnology, and what is the next research direction?

A: The company has signed a 5-year R&D cooperation with Jiangnan University, and at present, the synthetic biotechnology of mogroside has just been completed, and the next step is to focus on improving the conversion rate to further reduce production costs and improve commercial accessibility.

Q: What is the composition of the company's synthetic biology R&D team? What is the progress of the team building in the synthetic biology workshop?

Answer: The company's synthetic biology business development focuses on the transformation and industrialization of achievements, so in terms of front-end research and development, the company mainly relies on the team of Jiangnan University and the research and development team of Chengdu CCID. The synthetic biology workshop currently has a number of engineers in place, and workers are in the recruitment stage, and it is expected that the personnel will be gradually in place in June and the workshop trial production will be started.

Q: Do you have any potential customers for Sedike's polysaccharide products?

Answer: The management of CCDICO has certain customer resources in the field of polysaccharide-related applications, especially in the field of cosmetics, the product has a certain customer base, and the company has also sent samples to customers at home and abroad, and the preparatory work for market development has been continuing.

Q: Does the enzyme-to-RM product have a good market development foundation? What are the main aspects of the company's competitive advantages in this business?

A: Among the natural sugar-free sweetener product categories, stevia occupies the largest market share, and among its many components, RM is currently the ingredient with the best taste and sweetness multiple, and the enzymatic conversion RM technology is relatively mature, and because its raw material is naturally extracted R, the RM obtained through conversion is also recognized as having natural properties. In terms of market access, the application of enzyme-converted RM products in the food field has been approved in most countries and regions, and China has also approved it as a new food ingredient for the first time in March 2024. On the whole, enzyme-to-RM products have a good foundation for market development.

Whether it is natural extraction or biosynthesis, the company has comprehensive advantages in separation and purification technology, production capacity, cost control, customer collaboration, etc., and the company's enzyme conversion products (not only RM) are expected to be sold mainly in the form of formulas in the future, and will rely on rich extraction product types and formula application research and development strength, which is expected to maximize the commercial application value of enzyme conversion products, establish its own differentiated competitive advantage, realize in-depth binding with customers, and seize more market share.

Q: Is the company's polysaccharide products produced by enzymatic conversion or fermentation technology? Are there any competitors?

Answer: the company's polysaccharide products are produced by fermentation, the raw material is glucose, the product is a compound with a new structure, due to its different molecular weight products in different fields of wide application, in various subdivisions there are similar efficacy of competing products, such as in the field of skin care, hyaluronic acid can be regarded as one of the competing products of polysaccharides. Therefore, in the process of industrialization of polysaccharide products in the future, how to further reduce costs, reasonable pricing, and enhance the competitiveness of various market segments will be the focus of the company's business development.

Q: From the industry average, the gross profit margin of stevia extract is maintained at 25%-30%, will the company's enzyme-to-stevia products be mass-produced, will it help to improve the gross profit center of the business?

A: First of all, the company's related products have not yet achieved mass production, so we cannot give clear guidance. From a logical point of view, the enzyme-to-stevia products currently developed by the company are high-value products, which will play a positive role in promoting the improvement of the gross profit margin, especially the company will mainly sell enzyme-to-stevia products in the form of formulas in the future, which will be conducive to achieving deep and long-term binding with customers and ensuring the stability of the company's business gross profit.

The main business of Rhine Biotech (002166) is the production and operation of natural health products, and continues to focus on the field of plant functional ingredient extraction.

According to the first quarter report of Rhine Biotech in 2024, the company's main revenue was 341 million yuan, an increase of 35.07% year-on-year; the net profit attributable to the parent company was 26.7901 million yuan, an increase of 34.37% year-on-year; deducted non-net profit of 39.5709 million yuan, an increase of 372.05% year-on-year; The debt ratio was 33.19%, the financial expenses were 3.4599 million yuan, and the gross profit margin was 26.05%.

A total of 3 institutions have rated the stock in the last 90 days, and 3 have given buy ratings.

Here's the detailed earnings forecast information:

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