2021-10-30Li Yonglei, Dong Bojun and Tang Yongjun of Guohai Securities Co., Ltd. conducted research on Jinhe Industry and released a research report "Three Quarterly Report Reviews: Sweeteners and Chemicals Profitability Increase, Maltol Increment will Be Put into Production", this report gives a buy rating to Jinhe Industry, and the current stock price is 48.08 yuan.
Jinhe Industry (002597)
event:
On October 28, 2021, the company released the third quarter report of 2021: achieved operating income of 4.019 billion yuan, an increase of +48.20% year-on-year; realized net profit attributable to the mother of 713 million yuan, a year-on-year increase of +33.82%; weighted average return on net assets of 13.78%, an increase of 2.26 percentage points year-on-year. The gross profit margin of sales was 26.44%, a year-on-year decrease of 4.25 percentage points; the net profit margin of sales was 17.74%, a decrease of 1.90 percentage points year-on-year.
Among them, in Q3 2021, the revenue was 1.545 billion yuan, +74.93% year-on-year, +15.53% month-on-month; the net profit attributable to the mother was 274 million yuan, +55.43% year-on-year, +19.63% month-on-month; the average return on net assets was 5.23%, an increase of 1.44 percentage points year-on-year, an increase of 0.78 percentage points. The gross profit margin of sales was 26.84%, a decrease of 3.33 percentage points year-on-year, an increase of 3.03 percentage points from the previous quarter, and the net profit margin of sales was 17.74%, a decrease of 2.21 percentage points year-on-year, an increase of 0.62 percentage points from the previous quarter.
Investment Points:
The profitability of sweeteners and basic chemicals has increased, and the benefits of new production capacity have been released significantly
In the first three quarters of 2021, the company achieved revenue of 4.019 billion yuan, an increase of 48.20% year-on-year; and achieved a net profit attributable to the mother of 712 million yuan, an increase of 33.82% year-on-year. Among them, in the single quarter of 2021Q3, the company achieved revenue of 15.450 billion yuan, an increase of 74.93% year-on-year and 11% month-on-month; and a net profit attributable to the mother of 274 million yuan, an increase of 55.43% year-on-year and a 12% increase from the previous quarter. The company's performance has grown rapidly, on the one hand, it has benefited from the effective control of the epidemic, the continuous recovery of downstream demand, driving the rapid rise in upstream chemical prices, and the company's basic chemical business has fully benefited from the industry boom and improved profitability. At the same time, the company's projects with an annual output of 5,000 tons of sucralose and an annual output of 1,000 tons of furan ammonium salt have been put into operation from the end of 2020 to the beginning of 2021, and the benefits have been released significantly, contributing to the company's stable performance increment.
In Q3 2021, the company's net cash inflow from operating activities was 293 million yuan, an increase of 179 million yuan or 157.39% year-on-year. In Q3 2021, the company received 145,700 yuan in cash from the sale of goods and the provision of labor services, an increase of 79,800 yuan or 121.07% year-on-year.
In terms of expenses during the period, the sales/management/financial expense ratio of the company in 2021Q3 was 1.08%/2.37%/0.72% respectively, -0.99/+0.75/+0.77pct year-on-year, +0.19/+0.62/+0.68pct.
Acesulfame potassium and sucralose continued to prosper, and the sweetener faucet fully benefited
The company is the world's leading sweetener company, as of the end of the reporting period, the company has 12,000 tons / year acesulfametic, 8,000 tons / year sucralose production capacity, the scale advantage is significant. With the increase of residents' health awareness, low-sugar diets receiving more and more consumer attention, the market demand for healthy sweeteners continues to increase, the market supply and demand tighten, and the support of upstream raw material prices on the cost side, starting in August 2021, the prices of acesulfame potassium and sucralose have ushered in a significant increase. According to Baichuan Information, Acesulfametic rose from 61,000 yuan / ton in early August to the current 95,000 yuan / ton, with a cumulative increase of 56.5%; sucralose rose from 208,000 yuan / ton in early August to the current 452,000 yuan / ton, with a cumulative increase of 117.31%, ushering in a high degree of prosperity. In view of the rapid growth in the number and consumption of low-sugar/sugar-free products at home and abroad, the demand for sweeteners will continue to increase, and the high prosperity is expected to continue, and the company as a sweetener leader will fully benefit.
5,000 tons of methyl ethyl maltol is about to reach production, and the leading edge of the flavor and fragrance business is expanding
On December 10, 2020, the company announced that the project with an annual output of 5,000 tons of methyl ethyl maltol was approved by the EIA, and the total investment of the project is expected to be about 521 million yuan, and the overall construction period is 12 months. Up to now, the project has entered the equipment, instrument installation stage, according to the project construction plan, is expected to be put into operation in the fourth quarter of 2021, when the company's maltol production capacity will reach 9,000 tons / year, on the basis of consolidating the current market share, will further enhance the market share, and continue to expand the leading edge in the flavor and fragrance sector. At the same time, in addition to maltol, the company also actively layouts other products of flavors and fragrances, and currently has a production capacity of 4500 tons/year Jiale musk and 100 tons/year methylcyclopentenolone, and the flavor and fragrance product line is rich.
The Dingyuan project continues to be built to promote the company's future growth
The company's Dingyuan Circular Economy Industrial Park in the early stage of 10,000 tons / year furfural, 40,000 tons / year chlorinated sulfoxide project has been put into production in 2019, 4500 tons / year Jiale musk solution, 1000 tons / year furan ammonium salt has been completed construction, and officially entered the trial production stage in January 2021. At the same time, the remaining 10,000 tons/year furfural, 40,000 tons/year thionyl chloride, 5,000 tons/year 2-methylfuran, 3,000 tons/year 2-methyltetrahydrofuran, and the second phase of the Dingyuan Circular Economy Industrial Park project are also continuing to advance, of which 40,000 tons/year sulfoxide chloride is expected to be put into operation in 2022. The planned production capacity of Dingyuan Circular Economy Industrial Park has been successively built and put into operation, which is conducive to the company to further improve the industrial chain, optimize the product structure, form upstream and downstream synergies, promote the company's long-term and stable development in the future, and become a leader in the food additive industry.
Profit Forecast and Investment Rating It is expected that the company's net profit attributable to the parent in 2021/2022/2023 will be 1.059, 13.52 and 1.541 billion yuan, respectively, and the EPS will be 1.89, 2.41 and 2.75 yuan / share, corresponding to PE of 23, 18 and 16 times, giving a "buy" rating.
Risk Warning The progress of new capacity construction is not up to expectations, the performance of new capacity contribution is not up to expectations, raw material prices are fluctuating, and the economy is down sharply.
A total of 13 institutions have given ratings in the last 90 days, 11 buy ratings and 2 overweight ratings; the average target price of institutions in the past 90 days has been 43.93; the Securities Star Valuation Analysis Tool shows that Jinhe Industrial (002597) good company rating is 4 stars, good price rating is 2.5 stars, and valuation comprehensive rating is 3.5 stars.