2021-10-12Loftly Dongguan Securities Co., Ltd. Lu Liting conducted a study on Jinhe Industry and released a research report "Event Review: Raw Material Prices Increase, Tight Supply and Demand, and the Company's Product Prices Continue to Rise", this report gives An overweight rating to Jinhe Industry, and the current stock price is 40.93 yuan.
Jinhe Industry (002597)
Event: According to the data of Baichuan Yingfu, on October 11, the company's current quotation of acesulfame potassium products was 95,000 yuan / ton, up 18.75% from last week; sucralose products were quoted at 360,000 yuan / ton, up 12.5% from last week's price; ethyl maltol products were quoted at 180,000 yuan / ton, up 20% from last week's price; methyl maltol was quoted at 150,000 yuan / ton, and the price remained unchanged.
The double control of energy consumption and power curtailment and production rationing have led to an increase in raw material prices, and the company's sweeteners and maltol products are tightly supplied and the price is raised. According to the data of Baichuan Yingfu, on October 11, the company's acesulfame potassium product quotation was 95,000 yuan / ton, up 18.75% from last week, up 26.67% from the previous month, up 63.79% from the beginning of the year; sucralose products were quoted at 360,000 yuan / ton, up 12.5% from last week, up 28.57% from last month, up 71.43% from the beginning of the year; ethyl maltol products quoted at 180,000 yuan / ton, up 20% from last week's price, up 71.43% from the previous month, This is up 106.9% from the beginning of the year. The reasons for the company's price adjustment of acesulfame potassium, sucralose and ethyl maltol are mainly (1) the supply of raw materials is tight and the price is high due to the double control of energy consumption and power rationing; (2) the individual manufacturers of sweeteners and maltol are in a state of low yield under the influence of insufficient supply of raw materials and double control of energy consumption, and the industry supply is tightening; (3) "Double Eleven" and domestic and foreign holidays are approaching, and the terminal demand is better.
To achieve vertical integration and extension, the company is expected to benefit from the price increase in depth. The company currently has an annual output of 12,000 tons of acesulfame potassium production capacity and 8,000 tons of sucralose production capacity, is the leading industry of acesulfame and sucralose, the two global production capacity accounted for 60% and 50% respectively. In addition, the company currently has an annual output of 1,000 tons of methyl maltol and an annual output of 4,000 tons of ethyl maltol capacity, and another 1,000 tons of methyl maltol and 4,000 tons of ethyl maltol capacity will be put into operation in the fourth quarter of this year. The company is committed to the vertical extension of the industrial chain, and currently realizes the self-production of divinylone, thionyl chloride and furfural, an important raw material upstream of acesulfame potassium, sucralose and methylethyl maltol, with an annual output of 10,000 tons of diethylene ketone production capacity, an annual output of 40,000 tons of sulfoxide chloride production capacity and an annual output of 10,000 tons of furfural production capacity, which is conducive to reducing the cost fluctuations caused by the company's purchased raw materials. The prices of acesulfame potassium, sucralose and ethyl maltol have risen by 63.79%, 71.43% and 106.9% respectively this year, and the company's cost control is better than that of its peers, and it is expected to fully benefit from the second round of price increases.
Investment advice: The recent price increase in acesulfame potassium, sucralose and ethyl maltol is obvious, on the one hand, due to upstream cost support, on the other hand, the product supply is tight and the demand is better. We believe that in recent years, the company has actively extended vertically to the upstream of the industrial chain, producing important raw materials by itself, and under the background of this round of product price increases, the company's performance can be expected to increase rapidly. Considering the price increase of the company's products and the increase in the company's profit forecast, it is expected that the company's basic earnings per share for 2021-2022 will be 1.89 yuan and 2.28 yuan, and the current stock price corresponding to the price-earnings ratio is 22 times and 19 times, maintaining a cautious recommendation rating.
Risk warning: the risk of downstream demand weakening; the risk of product price decline; the risk of intensified competition in the industry; the progress of projects under construction and proposed to be built is less than expected, and the occurrence of force majeure events such as natural disasters and man-made disasters.