ANGEL YEAST(600298) 长江证券·2024-08-04 12:31Investment Rating - Buy rating, first coverage [5] Core Views - Angel Yeast is a leading company in the yeast and derivatives market, with a domestic market share of over 55% in 2023 and a revenue of 13.58 billion RMB [5][17] - The company has a strong position in the yeast extract market, with a 70% market share, and is expected to benefit from the growing demand for healthier food additives [17][7] - Angel Yeast's overseas business is expanding rapidly, with a global market share of 18% in 2023, and further growth is expected with new capacity in Egypt and Russia [8][66] Market Overview - The yeast and yeast extract market in China reached over 15 billion RMB in 2022, with Angel Yeast being a key player [5][18] - The demand for yeast in China is divided into three main categories: Western baking, Chinese staple foods, and brewing, with Chinese staple foods accounting for 39% of total demand in 2021 [6] - Yeast extract, a key derivative, is expected to see significant growth due to health trends, with demand projected to increase by 182.84% to 259.58% by 2030 compared to 2021 levels [7] Product and Technology - Angel Yeast has a comprehensive product matrix, including dry yeast, semi-dry yeast, and fresh yeast, catering to various market needs [62][63] - The company has made significant technological breakthroughs, such as the development of high-sugar-tolerant active dry yeast in 2001 and aluminum-free baking powder in 2009 [22] - Angel Yeast's product portfolio is supported by extensive R&D and a wide distribution network, which enhances its competitive advantage [62][64] International Expansion - Angel Yeast has been expanding its overseas presence, with significant investments in Egypt and Russia, where new production facilities are expected to boost capacity [68][69] - The company's international revenue reached 4.79 billion RMB in 2023, with a CAGR of 19.96% from 2018 to 2023 [66] - Angel Yeast's global market share is expected to grow further, supported by its strategic investments and local production capabilities in key markets [72][73] Financial Projections - Angel Yeast is expected to achieve net profits of 1.30 billion RMB, 1.48 billion RMB, and 1.71 billion RMB in 2024, 2025, and 2026, respectively, with corresponding EPS of 1.50 RMB, 1.71 RMB, and 1.97 RMB [9] - The company's PE ratios are projected to be 20x, 17x, and 15x for 2024, 2025, and 2026, respectively, indicating a favorable valuation [9]