Jinhe Industry (002597) 2019 Interim Report Review: Second-quarter results improved on optimistic about the company’s new product layout

Jinhe Industry (002597) 2019 Interim Report Review: Second-quarter results improved on optimistic about the company’s new product layout
The company achieved net profit attributable to mothers in the first half of the year4.10,000 yuan, second quarter revenue, net profit improved month-on-month.The competition pattern of the new sweetener industry is expected to be good. The future demand will grow steadily, and the company will gradually expand its market share. We are optimistic about the layout of the company’s furan series of new products and achieve long-term growth.Maintain 2019 EPS forecast to 1.41/1.70/2.06 yuan, maintaining a target price of 29.7 yuan and “Buy” rating. The performance in the second quarter improved month-on-month, and the food additive business turned positive.In the first half of 2019, the company achieved operating income19.780,000 yuan, at least -12.3%; net profit attributable to mother 4.10,000 yuan, at least -26.1%, in line with expectations. Corresponding to the second quarter to achieve operating income10.69 ppm, at least -4.4%, +17.7%; net profit attributable to mother 2.210,000 yuan, at least -12.2%, +22.4%.The company’s food additive business achieved revenue in the first half of the year9.67 trillion, ten years +4.1%, mainly due to the increase in product sales; revenue from bulk chemicals7.500,000 yuan, at least -15.4%, mainly due to falling product prices. Increase investment in research and development, and financial costs decrease every year.The company’s overall gross profit margin was 33 in the first half of the year.05%, year -1.50pct, of which food additive gross margin is 46.44%, ten years +3.93 天津夜网 points, gross margin of bulk chemicals 21.74% every year -15.35 points.In the first half of the year, the company’s net interest rate was 20.28% per year -3.78pct, mainly because the R & D expense ratio increased by 2.03pct to 4.02%.For the three major expense ratios, the sales expense ratio is 3.14%, ten years +0.45 points; management expense ratio 2.26%, ten years +0.62 points; financial expense ratio -0.49% a year -1.01pct, mainly due to the company’s exchange gains in the first half increased by 9.8 million yuan. Sucralose plans to expand production by 5,000 tons, optimistic about the competitive landscape.According to the announcement of the Laian County Government’s environmental assessment, the company plans to invest 10 trillion to build a new 5,000-ton sucralose production capacity.At present, the company has a production capacity of 3,000 tons, leading the scale of the industry, and the cost is significantly lower than the subdivision.In the future, the supply side of the industry, Anhuan supervision will tend to be severe and accelerate the elimination of small-scale production capacity. The company is expected to expand its production capacity and expand its market share.Will become an inevitable trend.At present, the price of sucralose is stable at the historical bottom (including tax price of about 21 million tons / ton), and it is already at the cost line of most small and medium-sized production facilities. It is expected that the price will have limited downward space. The consumer single product Philharmonic was launched to expand the use of sweeteners.This year, the company launched a sweetener consumer single product, Ale Sweet, targeting C-end consumers, expanding the use of sweeteners in daily brewing, cooking, and baking processes, while breaking through the inherent sales of the product only to food and beverage manufacturers.mode.The launch of Philharmonic can increase consumer awareness of sweeteners, accelerate the replacement of sucrose, and open up demand space; gradually increase the company’s sweetener business gross margin level and improve profitability. The Dingyuan Phase I project was partially completed, and its cost advantage was promoted.The company is in the first phase of the construction of Dingyuan, and plans to insert 2 capacity of furfural (an important raw material for maltol) and 8 chloride trisucrose (an important raw material for sucralose).Among them, the 4-chlorinated naphthyl chloride and 1-furfural-formaldehyde main projects that have been constructed in advance have been capped, and the 30MW biomass thermal power project achieved grid-connected power generation trial operation in July.After the project is put into production, the company’s cost advantage is expected to be further strengthened, and there is room for marginal improvement in profitability. Extend the furfural industry chain and create revenue from fist products.According to the announcement of Dingyuan County Government’s environmental impact assessment, Jinxuan Technology, a wholly-owned subsidiary of the company, plans to invest 3.US $ 5.6 billion to build 600 tons of furanones, 4,500 tons of musk solution, 5,000 tons of 2-methylfuran, 3,000 tons of 2-methyltetrahydrofuran, and 1,000 tons of ammonium furan salt. This project will replace the original planned long-term plan.5000 tons of formaldehyde maltol production capacity.The series of products laid out this time is a further extension of the furfural industry chain, mainly covering the fields of flavors and fragrances and pharmaceutical intermediates.We are optimistic about the development and growth of a series of products, which is another accumulation of the company’s fist products, providing new growth points for future performance. Risk factors: 1) Deteriorating competition pattern exceeds expectations; 2) Product prices have fallen sharply; 3) New capacity is released less than expected; 4) Food additive safety risks Investment suggestion: The competition pattern of the new sweetener industry is gradually improving, and the future demand will grow steadily. The company will gradually realize its cost and capacity advantages to expand its market share. We are optimistic about the company’s layout of furan products and consumer single product Philharmonic, with long-term growthExpected.Maintain the forecast of net profit attributable to mother to 2019-2021.90/9.49/11.49 trillion, corresponding EPS is 1.41/1.70/2.06 yuan.Maintain target price of 29.7 yuan (corresponding to 21 times PE in 2019) and “Buy” rating.