Bailong Chuangyuan(SH:605016) Tianfeng Securities·2025-04-15 14:55Investment Rating - The report assigns a "Buy" rating for the company with a target price of 26 CNY, based on a relative valuation method, corresponding to a PE of 25X for 2025 [6]. Core Viewpoints - The company is a leading player in functional sugars, with accelerated capacity expansion driving high growth. It has established itself as a top supplier of functional ingredients in China, focusing on prebiotics, dietary fibers, and healthy sweeteners. The company is expected to achieve a revenue CAGR of 22% and a net profit CAGR of 25% from 2019 to 2024 [1][3]. Summary by Sections 1. Functional Sugar Leadership and Capacity Expansion - The company has diversified its product matrix to meet health demands, with a focus on prebiotics, dietary fibers, and healthy sweeteners. Its revenue from prebiotics, dietary fibers, and healthy sweeteners accounted for 29%, 54%, and 13% respectively in Q1-Q3 2024 [18][19]. - The company has a stable shareholding structure and experienced management team, with the chairman holding 47.36% of shares, ensuring strong operational control [21][24]. - The company maintains a strong profitability position within the industry, with new production lines expected to enhance profit elasticity in 2025 [26]. 2. Emerging Industry Potential and Competitive Barriers - The dietary fiber industry is experiencing robust growth, with global and Chinese revenues reaching 514 million and 129 million USD in 2023, respectively, and projected to grow significantly by 2030 [2][34]. - The company is positioned to benefit from the high technical barriers in the high-end product segment, particularly in resistant dextrin, which has a market share of 18% in China [40][46]. 3. Performance Growth from Capacity Expansion and Stable Demand - The company anticipates revenue growth from three main areas: increased proportion of high-margin products, continuous capacity expansion, and strong customer stickiness [3][32]. - The company expects a revenue increase of 33% in 2024, reaching 1.15 billion CNY, with net profit projected to grow by 30% to 250 million CNY [3][5]. 4. Financial Forecast - The company’s financial projections indicate a revenue increase to 1.15 billion CNY in 2024, with net profit reaching 250 million CNY, and further growth expected in subsequent years [5][26].