After more than ten years of market cultivation, sugar-free beverages have finally waited for its golden decade. Sanyuan Bio has been working in the field of sugar substitute for more than ten years, and has also sat on the cold bench of capital for eight years. With the Yuanqi Forest bringing fire to erythritol, Ternary Biology has also begun to raise its eyebrows in the capital market, but there are still many market variables, can you laugh to the end in this war without gun smoke?
Wen | Wish Tingting
Overnight, the sugar control trend blew all over the streets.
This wave of sugar-free beverages led by Yuanqi Forest is continuing to benefit its sugar substitute suppliers. Shandong Sanyuan Biotechnology Co., Ltd. (hereinafter referred to as Sanyuan Biotechnology), a major sugar substitute supplier of Yuanqi Forest, is accelerating its entry into the capital market.
On August 11, the Listing Committee of the Growth Enterprise Market of the Shenzhen Stock Exchange (hereinafter referred to as the Listing Committee) held the 47th review meeting in 2021 and announced the successful meeting of Sanyuan Bio. It is understood that Sanyuan Bio plans to raise 900 million yuan this time, and the raised funds will be used for the annual output of 50,000 tons of erythritol and technical center projects and supplementary working capital, and the expansion funds account for more than 85%.
Sanyuan Bio has been eager to enter the capital market for a long time, but it has been bumpy due to mediocre performance.
As early as December 29, 2012, Sanyuan Bio was listed on the Qilu Stock Exchange, with a total share capital of 20 million shares. After 3 years of incubation and incubation, at the end of 2015, Sanyuan Bio successfully transferred to the "New Third Board" through the green transfer channel established by Qilu Stock Exchange and the "New Third Board".
On September 11, 2020, the suspension of trading, Sanyuan Bio transferred from the new three board to A shares, and then "opened and hung" all the way, compared with the average queuing time of the transfer board enterprises of 451 days, the transfer of sanyuan bio, from the acceptance of the application to the process of the meeting, took only about half a year.
It is worth mentioning that before the delisting, the stock price of Sanyuan Bio once rose to 99.27 yuan / share, compared with 14.89 yuan at the beginning of 2020, the stock price has increased by 6 times. It is foreseeable that in the case of the increasing demand for erythritol in the food industry, once successfully listed, Ternary Bio will be hot in the short term.
As a professional manufacturer who began to industrialize the production of sugar substitutes earlier in China, the main product of Sanyuan Bio is a natural low-power sweetener - erythritol. In 2016, as a cutting-edge brand in the beverage industry, Yuanqi Forest applied the more expensive erythritol to the bottled beverage industry for the first time, and quickly came out of the circle with "0 sugar, 0 calories and 0 fat", and "sugar-free and low-sugar" became a new outlet in the beverage industry. For a time, a whirlwind of sugar-free beverages that swept the industry quietly blew. Driven by the concept of healthy eating, the entire industry has expanded rapidly.
(Source: Tianfeng Securities Research Institute)
The fiery sugar-free wind has supported the rapidly growing sugar substitute market, and erythritol has also appeared in the public eye for the first time.
Compared with aspartame and acesulfame potassium, as a substitute for traditional sweeteners, erythritol is fermented with glucose, and the use of stevia is similar in function, the calorie is negligible, and the sweetness of sucrose is maintained at 70%. Studies have shown that because the human body does not have an enzyme system that metabolizes erythritol, erythritol is not easy to digest by the human body, 90% of erythritol will be excreted with urine, the remaining 10% into the large intestine, and it is not easy to be fermented by the intestinal flora, and the safety of eating is high. It is also the least energetic of the polysitol sweeteners, also known as "zero" calorific value ingredients.
As a sweetener, erythritol has obvious advantages and shortcomings.
Tang Binsen, the founder of Yuanqi Forest, once said bluntly that the taste of erythritol is close to the taste of sugar, but the cost is extremely expensive, "50 times more expensive than the cost of traditional aspartame zero cola." ”
However, the relatively expensive cost does not stop the giants from going forward and following the pace, and the popularity of the Yuanqi Forest allows the beverage industry to see the vast market for high-end and low-sugar beverages, and also drives the rapid growth of the upstream industrial chain sugar industry. According to reports, some insiders said, "In January this year, the price of erythritol was 17 yuan per kilogram, and the price began to rise in April, and now the price remains at about 35 yuan per kilogram." The entire sugar generation industry has been in short supply this year. ”
The domestic erythritol industry started late, and the production capacity has not yet been fully released. Bowling Treasure entered the track first, followed by Sanyuan Creatures and Zhucheng Dongxiao. However, with the sluggish stock price of Bowling Bao and insufficient production capacity; the expansion of Zhucheng Dongxiao is weak, and the latecomers of Ternary Biology are on the top. In 2019, Sanyuan Bio, Bowling Bao, and Zhucheng Dongxiao accounted for 33%, 18% and 6% of the global market output share respectively.
<h1 class="pgc-h-arrow-right" > products are mainly exported, and the gross profit margin is higher than that of peers</h1>
Behind the "sweet" business of Sanyuan Bio is the gross profit margin that is much higher than that of other companies in the industry.
It is reported that the ternary biological products mainly include erythritol and monk fruit compound sugar, stevia compound sugar, sucralose compound sugar and other compound sugar products. Among them, erythritol revenue accounted for more than 60%.
In 2018, 2019 and 2020, the comprehensive gross profit margin of Ternary Bio was 36.85%, 45.77% and 42.27%, respectively, compared with 11.44% of Bowling Burg in 2020 and 30.76% of Jinhe, and its gross profit margin can be compared with almost any other company in the benchmark industry.
The reason is that compared with other companies in the industry such as Bowling Bao, Ternary Biology, as an industry giant whose output accounts for 54.90% of the total domestic erythritol production and 33% of the global total output, makes it give full play to its scale effect under the condition of "large production capacity", and also has high upstream and downstream bargaining power. In addition, the high gross profit margin of its new product Luo Han Guo compound sugar also further increased the overall gross profit margin of Ternary Bio.
In terms of business revenue, with the rapid growth of downstream market demand, the scale of operating income has maintained a relatively high growth rate, in 2018, 2019 and 2020, Ternary Bio achieved revenue of 292 million yuan, 477 million yuan and 783 million yuan, and net profit of 0.68 billion yuan, 136 million yuan and 233 million yuan, respectively.
From 2018 to 2020, cash outflows from operating activities were 210 million, 340 million and 590 million, respectively, with an average annual compound growth rate of 67.29%. From 2018 to 2020, the proportion of erythritol revenue to operating income was 84.65%, 59.87% and 78.80%, respectively, and the gross profit of erythritol accounted for 84.67%, 57.06% and 78.59% of the comprehensive gross profit, respectively.
It is worth mentioning that in 2020, because the original supplier Bowling Treasure and other production capacity can not meet the demand, Yuanqi Forest finally found a three-yuan organism through layers of agents. In the first half of 2021, Sanyuan Bio was officially labeled as a direct supplier of Yuanqi Forest, which also promoted the further growth of Sanyuan Bio's annual revenue in 2020.
Outside the halo of rapid growth in the industry, is the fact that the market size of the entire erythritol is still very small. It is estimated that the global erythritol market size will be about 1.6 billion yuan in 2020. Because the distribution method of ternary biological distribution is still based on "distribution-oriented, supplemented by direct sales", in addition to some head customers, the orders are scattered and the single order volume is not large, and the domestic sugar substitute market is still in the development stage, and there are still a few people who order large quantities directly to the factory like Yuanqi Forest.
This also coincides with the prospectus data of Ternary Bio. In fact, at present, the main products of Tsnary Bio are still mainly exported, and the concentration of the top five customers of Tsnary Bio is high. In 2020, in addition to Yuanqi Forest, the top five customers of Tsanyuan Bio are all American companies, accounting for 40.9% of total revenue. From 2018 to 2020, the export revenue of Ternary Biologics was 210 million, 400 million and 560 million, accounting for 82.25%, 89.53% and 71.86% of the main business income of the current period, respectively.
Under the trend of consumption upgrading, sugar-free and low-sugar, the demand for erythritol is bound to continue to expand. According to the research report of Tianfeng Securities, due to the trend of sugar-free and low-sugar, the demand for erythritol is expected to continue to grow. It is expected that the compound growth rate of domestic demand will exceed 40% in the future, and the global demand for erythritol is expected to reach 285,000 tons by 2025. According to the Sullivan Institute, from 2020 to 2024, the global demand for erythritol will further grow at a compound annual growth rate of 22.1%.
<h1 class="pgc-h-arrow-right" > the test of the golden decade</h1>
Dongxing Securities said that in 2019, the size of China's sugar-free beverage market was 9.87 billion yuan, accounting for only 1.25% of the overall soft drinks, and the current stage of development can be compared to the golden decade of the development of Japanese sugar-free beverages from 1985 to 1995.
The data in the prospectus of Sanyuan Bio gave it a perfect opening. But in fact, the test of the "sweet" business of erythritol is far from over.
The prospectus also exposed the shortcomings of Ternary Biology - a single main business. Although it was mentioned many times during the reporting period that new products such as rebaudidin M and allulose are being actively developed, the company's product structure is still dominated by erythritol. If there is a major fluctuation in demand or supply in the erythritol industry, or the company's new product research and development cannot meet expectations, Ternary Bio will be in an embarrassing situation.
In addition, as a product with more than 60% of ternary biological revenue, erythritol's "jianghu" status is not unshakable. The first half of the sugar substitute battlefield has been rumored to be the dispute between acesulfame potassium and aspartame, and the second half of the sugar substitute is the contest between erythritol and sucralose.
From focusing on cost performance, to focusing on functionality, to focusing on taste and safety, sweeteners are also constantly iterating with people's different needs at different times. As an alternative to traditional sucrose, erythritol is the optimal solution, but not the only optimal solution.
In fact, some beverage companies such as South Korea's LINGTEA have used sucralose as a sugar substitute. Many enterprises have also increased the size of sucralose, and jinhe industry's annual output of 5,000 tons of sucralose project has been fully put into a state of preparation for trial production. 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.
Erythritol, which has entered the public eye with the east wind of the sparkling water of the Yuanqi Forest, has established the cognition of "high-quality sugar substitute" in the minds of the public. However, with the continuous progress of the preparation and purification process, it is still unknown whether there will be other explosive sugar substitutes in the future to replace erythritol.
In addition, the concentration of the top five customers is high, and four of the five major customers are foreign customers, in the current anti-globalization situation, trade risks superimposed, how to improve inventory turnover and balance accounts receivable is also an urgent need to think about. In addition, if there is a significant adverse change in the survival and operation of a customer or the adjustment of the cooperation mode, the impact on its performance will be significant.
It is worth mentioning that due to the narrow scope of use of erythritol in the early stage, there are fewer customer applications, consumer awareness is not enough, the market introduction period is relatively long, and there are fewer track players. With the addition of track players, supply and demand will eventually be balanced after the release of the industry's overall production capacity, and erythritol will also move from the current high to a more reasonable price range.
With the popularity of erythritol and the coldness of the traditional sweetener market, these invisible competitors such as listed companies Baolingbao, Jinhe Industry, Fengyuan Pharmaceutical, etc., will directly impact the supply and demand pattern of the industry under the opportunity of seeking transformation and expanding production capacity. Taking Jinhe Industry as an example, it has gained a pricing advantage in the oligopoly pattern of acesulfame and is expected to repeat itself in the field of food additives such as sucralose.
After more than ten years of market cultivation, sugar-free beverages have finally waited for its outlet. Can Sanyuan Biology, a veteran who has worked in the field of sugar substitutes for more than ten years, have the last laugh in this war without gun smoke?
Perhaps as Nie Zaijian, the founder of Ternary Biology, said, "Out of a day of difficulties, to solve a day's problem, good things and bad things are not the thing itself, but the mentality of treating this matter." ”