Meihua Biological (600873) Annual Report Comments: Stable Operation and Rising Opportunity for Company Performance
Event: The company’s 2018 annual report showed that operating income reached 126.
48 ppm, an increase of 13 in ten years.
62%, net profit attributable to mothers to achieve 10.
2 billion, down 14 every year.
Q4 achieved operating income of 33.
47 ppm, a ten-year increase4.
89%, net profit attributable to mothers2.
72 ppm, a decrease of 43 per year.
The company’s proposed profit distribution plan is to distribute cash dividends to all shareholders for every 10 shares3.
30 yuan (including tax), according to the existing total share capital is expected to distribute cash dividends10.
About 25 trillion (including tax).
The market for xanthan gum and small varieties of amino acids has improved, and the performance contribution is obvious. Under the situation that the price of the main MSG product is sluggish, the company has nurtured many years of nucleotides.
Thanks to the increase in production capacity, the decline in new customer development and production costs, the overall sales volume, volume and profit margin of xanthan gum have increased compared to the same period last year, of which sales volume increased by 51.
8%, with an average budget increase of 18.
The sales of small varieties of amino acids, especially glutamine, isoleucine, adenosine and valine, increased significantly. In 2018, the business income of small varieties of amino acids increased by 50% compared with 2017.
The business income of human medical amino acid products increased by 50 compared with the same period last year.
04 impurities, mainly due to the increase in sales of glutamine, isoleucine, adenosine and other products, as a result of rising sales prices.
Weak demand for feed amino acids has dragged down prices. Leading companies in these industries will increase a large amount of amino acid production. In addition, affected by the African swine fever epidemic, the total feed demand, and the prices of threonine and lysine will be weak.
Coupled with the main material corn, the price of raw coal has risen, leading to a decrease in the gross profit margin of the amino acid sector for feed compared to the same period last year.
The company’s Jilin Baicheng’s annual output of 40 was included in the comprehensive amino acid project and it was put into production and commissioning in Q4 of 2018.
After Baicheng put into production, the 成都桑拿网 company’s amino acid output reached 70 tons, the company’s leading position in the lysine industry will be further consolidated, and the cost of amino acid production is expected to continue to decline.
The base number affects Q4 performance, and non-profit deductions continue to grow.
72 million US dollars, a decline in resistance in ten years, mainly due to the high base of 2017Q4.
In the second half of 2017, there was a breakthrough increase in threonine prices, driving 2017Q4 earnings growth.
From a business point of view, 2018Q4 operation is relatively stable, and the gross profit margin and net profit margin are roughly equivalent to 2018Q3.
Initially, the change in net profit was mainly affected by the decrease in government subsidies, which measured the decrease in government subsidies in 2018 and 20172.
After extrapolating non-recurring gains and losses, the net profit in 2018 was 8.
92 ppm, an increase of 7 per year.
09%, showing better profitability.
Monosodium glutamate is steadily rising. The price of monosodium glutamate, the company ‘s main product, was strong in the first half of last year. It once hit the lowest point in the history of the industry.The achievement of the standard was stopped and restricted to varying degrees. The market supply and the expectations of downstream customers were greatly affected. The market price began to rise rapidly and eventually appeared after reaching the annual high point in mid-to-August.The quotation was maintained at about 8300 yuan / ton, and the average price for the whole year increased by about 10% per year.
The prices of monosodium glutamate and mononucleotide increased, driving the company’s food taste optimization products to increase operating income over the same period last year.
52 averages, gross margin increased by 3 quantities over the same period last year.
We expect that the price of taste nucleotides will continue to rise steadily in 2019, and there will be better performance in 2019. The profit forecast starts from the first quarter of 2019. The price trends of major products are judged. The price of monosodium glutamate as a whole is rising steadily, and the demand for flavor nucleotides is still relatively strong.
Due to the destocking effect brought by African swine fever, the prices of threonine and lysine products may continue to decline and decline, and small varieties of amino acids will still become the pillar products of profitability in 2019.
We forecast the company to achieve sales revenue of 146 in 2019.
4.0 billion, an annual increase of 16.
68%, realizing net profit attributable to mother 13.
1.8 billion, an annual increase of 31.
42 yuan, corresponding to an estimated 12 times.
As a leading company in the MSG industry, we believe that the company’s assessment and performance have room for improvement in both directions, giving an 18x estimate and a target price of 7.
56 yuan, give a buy rating.
Risks prompt price fluctuations caused by intensified competition in the industry, major deficiencies in the management of the company, swine fever and other epidemics aggravate downstream demand and increase macroeconomic fluctuations.