Orient Securities: Gave Angel Yeast a buy rating with a target price of 61.42 yuan

2021-10-25 Orient Securities Co., Ltd. Xie Ningling conducted a study on Angel Yeast and released a research report "Angel Yeast Three Quarterly Report Interpretation: Revenue meets expectations, profits are lower than expected, waiting for the price increase effect to appear", this report gives a buy rating to Angel Yeast, believing that its target price is 61.42 yuan, the current stock price is 48.69 yuan, and the expected increase is 26.14%.

Angel yeast (600298)

Core ideas

Revenue: The company's 21Q3 revenue was 2.360 billion yuan / +13.22%, which was accelerated by the base effect (Q2 revenue was +12.50% year-on-year). 1) From the perspective of volume price splitting, it is expected that driven by direct price increases, the Q3 price increase will contribute about 5% (overseas product prices at the end of 20 years, YE prices at the beginning of 21 years, and large packaging prices in March 21). 2) By channel, 21Q3 foreign revenue of 644 million yuan / + 6.91% (vs domestic revenue of 1.691 billion yuan / + 18.85%), excluding the price increase factor (overseas business from the end of 20 to 21Q1 price increase 10-20%), it is expected that the volume of foreign business will increase slightly, mainly due to the slowdown of the export business of the company due to the rise in maritime costs. 3) By category, the company's yeast revenue was 1.830 billion yuan / + 14.52%, sugar revenue was 151 million yuan / + 77.12%, packaging revenue was 0.98 billion yuan / + 17.13%, and dairy revenue was 0.14 billion yuan / +8.18%.

On the profit side: 1) the company's 21Q3 gross profit margin of 24.58%/-14.72%, if excluding the impact of accounting standard adjustments, the company's 21Q3 gross sales difference of 18.59%/-8.70pct, is expected to be mainly due to the increase in molasses, energy and other costs, of which the increase in molasses cost is estimated to affect the gross profit margin of 4pct+; 2) single Q3 to achieve a sales expense ratio of 5.99%/-6.03pct, which is expected to be affected by the adjustment of accounting standards; the realization of management expense ratio of 4.47%/+ 1.29pct (of which equity incentive expenses are expected to contribute 0.7pct), financial expense ratio of 0.53%/-1.17pct; 3) 21Q3 The company achieved a net profit margin attributable to the parent of 8.06%/-6.02pct, and the profit was under pressure.

In the short term, 1) the company has raised the price of 30%of the products accounting for 20-30% since October, and the price increase effect is expected to gradually reflect in 21Q4 and 22 years, and this price increase will boost the company's revenue by 6-9%; if the cost is assumed to be unchanged, it will contribute about 3-5pct to the gross profit margin. However, due to the company's high price increase and the focus on B-end products, we believe that the implementation of the subsequent channel price increase remains to be seen. 2) In addition, a new round of crushing season has begun, the current cost of molasses is still at a high level, and it is still necessary to closely track molasses price data in the future. 3) The company is currently mainly in the construction of the production line concentrated in 22 years of production, the depreciation expense is expected to increase. In the long run, the company's yeast concentric diversification development ideas are clear, domestic and foreign expansion is stable, and after this round of price increases to hedge costs, it is expected to release more profit margins in the future.

Financial forecasting and investment advice

Due to the price increase and the increase in raw material costs, we adjusted the company's 21-23 year EPS forecast of 1.66/2.01/2.31 yuan (1.84/2.11/2.36 yuan before the adjustment), and according to the comparable company law, we gave 37 times the valuation for 21 years, corresponding to a target price of 61.42 yuan, maintaining a "Buy rating".

Risk Warning

The cost of molasses has risen sharply, the implementation of price increases has not been expected, and the production capacity has not been expected

A total of 11 institutions have given ratings in the last 90 days, with 8 buy ratings and 3 overweight ratings; the average target price of institutions in the past 90 days has been 65.84; the Securities Star Valuation Analysis Tool shows that Angel Yeast (600298) good company rating is 4.5 stars, good price rating is 3 stars, and valuation comprehensive rating is 4 stars.