COFCO TECH(SZ:000930) Tianfeng Securities·2025-06-28 08:16Investment Rating - The report gives a "Buy" rating for COFCO Technology with a target price of 6.8 CNY, based on a price-to-book (PB) ratio of 1.2 for 2025 [5][3]. Core Views - COFCO Technology is a leading player in the domestic corn deep processing industry, with its dividend value becoming more prominent as performance improves. The company has a strong cost control capability, which has allowed it to turn a profit in 2024 despite low corn prices [1][3]. - The company is focusing on sustainable business models centered around biotechnology, with significant developments in bioenergy, fermentation products, and biodegradable materials [2][3]. Summary by Sections Company Overview - COFCO Technology, controlled by COFCO Group, has established a comprehensive corn processing industry layout covering food, food ingredients, bioenergy, and biodegradable materials. It is recognized as a leading corn deep processing enterprise in terms of scale and technology [1][13]. Main Business Segments 1. Bioenergy: - The company is a leader in fuel ethanol production with a capacity of 1.35 million tons, accounting for 23% of the national total. The industry is currently experiencing a slowdown, prompting the company to diversify into high-end alcohol and carbon dioxide utilization [2][31]. 2. Fermentation Products & Starch Raw Materials: - COFCO Technology is a leading producer of starch sugars, focusing on products like fructose syrup and maltodextrin. The company plans to expand its production capacity significantly by 2025 [2][46]. 3. Biodegradable Materials: - The main product is polylactic acid (PLA), with applications in packaging and agriculture. The company is advancing its biodegradable materials business through subsidiaries and plans to enhance its production capabilities [2][72]. Financial Forecast & Valuation Analysis - Revenue projections for 2025-2027 are 20.62 billion, 21.25 billion, and 22.97 billion CNY, respectively. The net profit attributable to shareholders is expected to reach 1.02 million, 1.64 million, and 2.34 million CNY for the same period [3][4]. - The report highlights the company's strong recovery in profitability, with a net profit of over 40 million CNY in Q1 2025, a year-on-year increase of 63.17% [1][3]. Investment Recommendations - The report emphasizes the potential for COFCO Technology to explore sustainable development models centered on biotechnology, which could enhance its dividend value as performance improves [3][5].