Angel Yeast rises due to capital and technical barriersProduction|Daily Financial ReportAuthor|Liu YuchenThe “Daily Financial Report” some time ago Introduced the peach plum bread company. Today I will talk about Angel yeast, which is highly related to peach plum bread. The reason why it is highly related is that yeast is necessary for baking pasta. The predecessor of Angel Yeast was the Yichang Edible Yeast Base. It was founded in 1986 and is the only yeast scientific research base in the country deployed by the State Planning Commission. In 1997, the Yichang Edible Yeast Base was transformed into Hubei Angel. Biological Group Co., Ltd. In 1998, 5 companies including Angel Biological Group initiated the establishment of Angel Yeast Co., Ltd. The company was listed on the Shanghai Stock Exchange in 2000. Angel Bio Group holds 39.98% of Angel Yeast, and Yichang State-owned Assets Supervision and Administration Commission holds 100% of Angel Bio Group. It is the actual controller of the company. Angel Yeast’s yeast production scale and market share rank first in China and Asia, with a global market share of about 16%, second only to Lesaffre and Intended Marley, with a domestic market share As of 2019, the company’s yeast production capacity reached 249,000 tons. Familiar and unfamiliar yeast industryYeast is both familiar and unfamiliar to everyone. The familiarity is because we eat it every day, and the unfamiliarity is because most people are familiar with the industry. The development situation is not understood. A brief introduction, yeast is a single-celled microorganism. Yeast cells contain protein, fat, sugar and B vitamins, etc., which have rich nutritional value. From the perspective of the industrial chain, the upstream of the yeast is mainly raw material molasses. The yeast strains are expanded in the molasses and other media after being expanded, propagated, separated, dehydrated, homogenized and then pressed to make yeast. The middle stream includes yeast and yeast extract. And intermediate products such as yeast derivatives; downstream applications include baking, fermented pasta, condiments, animal feed, wine, health products and other fields. For a long period of time, the global yeast production capacity was mainly concentrated in Europe and the Americas, accounting for 65% of the total, while the yeast production capacity distribution in Asia and Africa, where the population is relatively high, was relatively small. The yeast industry is positively correlated with population density and population birth rate. In 2018, the population growth rates of Africa, the Middle East, and South Asia were 2.7%, 1.7%, and 1.2%, respectively, which exceeded the global growth rate of 1.1%. It is an important growth area for yeast demand. With the slowdown in the production capacity growth of global yeast Phenibut on sale giant Lesaffre and British Union Marley, in recent years, the Asian and African markets have ushered in huge room for growth with rapid population growth, which provides the soil for the rise of Angel Yeast. According to the “Daily Financial Report” statistics, between 2009 and 2019, the global yeast production capacity increased from 1.3 million tons to 1.55 million tons, and the annual compound growth rate of production capacity in the past 10 years was about 2%. The rapid expansion, from 90,000 tons in 2009 to 250,000 tons in 2019, with a compound annual growth rate of 11%, far exceeding the industry average growth rate, allowing Angel Yeast to quickly become a leading company. Angel Yeast’s revenue ranks first in Asia and third in the world, with a domestic market share of 55% and a global market share of 16%. Among them, Lesaffre, British Union Marley, Angel Yeast, Las Vegas Mann accounts for 31%/17%/16%/8% respectively, CR4 exceeds 70%, and the industry concentration is relatively high. As mentioned above, most of the production capacity of the yeast industry is concentrated in Europe and North America, and the mismatch between the layout of yeast production capacity and the demand growth area gives leading yeast companies new development opportunities, so why do not Africa and South Asia countries The birth of a leading enterprise, but Angel Yeast has risen in China? The answer is simple. The industry barriers are very high. The main ones are capital barriers and technical barriers. Many people may not believe that, how can a simple yeast have high barriers? Taking Angel Yeast as an example, the company’s construction cycle is about one production line every two years. The domestic production line investment needs about 600 million yuan, and the foreign production line investment needs about 700 million yuan, and the average is about 300 million yuan per year. Asset investment, small product investment is about 100 million yuan to 150 million yuan per year, and annual production line maintenance costs are about 100 million yuan, and the total annual fixed asset investment is about 600 million yuan. According to statistics in the industry, the construction of a 10,000-ton active dry yeast production line requires a capital expenditure of 200-300 million yuan. In addition, yeast production includes processes such as strain cultivation and reproduction. The process flow is fine and complex, and the level of technology Performance and stability have a greater impact, and consumer experience differences are more obvious. In other words, it is difficult to produce yeast without capital and technical support, let alone building a leading enterprise, but Angel Yeast’s state-owned assets background and deep technical skills provide China Phenibut the possibility. Due to the obvious Matthew effect in the industry, some competitors and small yeast factories have poor profitability and have lost the motivation to expand production capacity, and some have even exited the yeast industry. There is room for further optimization of the industry competition pattern , Leading companies enjoy the dividends brought by the increase in industry concentration. The operating status of Angel YeastIn 2019, the company achieved operating income of 7.653 billion yuan, a year-on-year increase of 14.47%. The net profit attributable to shareholders of listed companies was 902 million yuan, which was higher An increase of 5.23% during the same period of the year. From the perspective of revenue composition, the company’s business includes yeast series, sugar, packaging, dairy products, and other main businesses (enzyme preparations, health products, condiments, organic fertilizers and food raw materials). The proportion of revenue was 76.8%, 6.4%, 3.6%, 0.8%, and 11.7% respectively. It can be intuitively discovered that yeast products are the main source of income for Angel yeast. Yeast can be widely used in pasta fermentation, baking, winemaking, food flavoring, medicine, nutrition and health care, industry, commodity production, environmental protection and scientific research. Fermented pasta is the largest source of yeast demand, contributing about 51% of the company’s total revenue. The domestic market is still the main battlefield of Angel Yeast. In 2019, the company’s domestic and foreign revenue accounted for 70.7% and 28.7% respectively. From the perspective of growth rate, domestic growth in most years in the past five years The growth rate is higher than that of foreign countries, and the growth rate of foreign countries is more dynamic from year to year. In 2019, the company’s gross profit margin was 35%, down 1.32% year-on-year, net profit margin was 12.28%, down 1.18% year-on-year, ROE was 19.37%, down 1.69% year-on-year, and the three fees were basically stable. The decline in profitability was mainly due to the increase in operating costs, which increased the cost-expense ratio from 62.36% in 2017 to 64.99% in 2019. However, the profit margin level is likely to be improved in the future. The fundamental reason is that the company’s products have room for price increases. In overseas markets, the prices of Lesaffre and British Union Marley products are higher than those of Angel products. Most of Angel products It is about 10% lower than similar competitors, and the price difference of some products is about 15%. The price difference is obvious. In addition, rising costs are another factor driving price increases. Molasses is a necessity for the production of yeast. Generally speak Buy Phenibut Online ing, 1 ton of yeast can be produced for every 5 tons of molasses juice. The unit price of molasses has increased by 10%-15% year-to-date, and the company has purchased the 2020 price at the end of 2019 when the price of molasses was low. 70% of molasses is needed. If the price of molasses rises by 10-25%, the cost of raw materials in 2020 is expected to rise by about 1.9-4.8%, which has a cost leading advantage compared with other manufacturers. On the other hand, from 2015 to 2019, the CAGR of the company’s yeast product ton price reached 4.39%, and the CAGR of sales growth reached 10.02%. The sales growth rate was much faster than the unit price growth rate. In 2020, the dual pressures of rising raw material prices and tight production capacity Under the circumstances, it is an inevitable trend for the company to take the opportunity to raise prices and increase the level of profitability. From a long-term perspective, Yeast Extract (YE) is likely to become a new flashpoint for Angel Yeast’s performance growth. YE is a natural seasoning. It has the characteristics of increasing freshness and flavor, reducing salt and light salt, balancing peculiar smell, and strong tolerance. It conforms to the development trend of salt reduction and health. The future development direction is to replace MSG. From the development of western flavoring agents, yeast extracts and vegetable protein hydrolysates have replaced MSG as the main cooking flavorings. Yeast extracts account for 30%-40% of the market share of umami flavors. , And China’s current proportion is only 2%, and it is still in the early stages of market substitution. At present, domestic MSG consumption is about 1.7 million tons. If 30% is replaced, it can be converted to 500,000 tons of yeast extract. Compared with the current level, there is still room for growth of more than 5 times. Angel Yeast is the world’s largest YE producer, with a production capacity of approximately 78,000 tons, accounting for 25% of the global production capacity, and a domestic market share of over 60%. It has established a leading position in the market and is expected to continue to enjoy the industry expansion dividend. Finally, let’s talk about the company’s investment value. In the past three years, ROE has declined year by year, but it has remained at about 20%. After the external expansion has come to an end, ROE may rebound with the release of earnings. The level can be compared to Haitian Flavour and Hengshun Vinegar in the condiment companies. Haitian Flavour’s 74 times price-earnings ratio (TTM) corresponds to 4.15 PEG, and Hengshun Vinegar’s 58 times price-earnings ratio (TTM) corresponds to 3.76 PEG. Qi Yeast’s 32 times price-to-earnings ratio (TTM) corresponding to 2.59 PEG is still relatively underestimated. Disclaimer: This article is for the purpose of conveying more information. The content of the article is for reference only and does not constitute investment advice. Investors operate accordingly at their own risk.