ANGEL YEAST(SH:600298) Guoxin Securities·2026-01-21 13:08Investment Rating - The report assigns an "Outperform" rating to the company, marking its first coverage [5]. Core Insights - The company is a leader in the Chinese yeast market and the second-largest yeast producer globally, with a total fermentation capacity of 400,000 tons and sales of 415,400 tons of yeast and deep-processed products expected in 2024 [1][3]. - The company has a comprehensive global layout with 11 production bases in China and overseas factories in Egypt and Russia, distributing products to over 160 countries and regions [1]. - The yeast industry is characterized by an oligopolistic structure, with the top three companies holding over 70% market share globally, and the company holds a 55% market share in China [1][42]. - The company has a strong competitive edge due to its global capacity and R&D system, with a consistent R&D expense ratio of over 4% and numerous domestic and international patents [2][3]. - The company is expected to benefit from a decline in raw material costs, particularly molasses, which is projected to support profit recovery as sugarcane planting areas expand in China [1][2]. Financial Projections - The company is forecasted to achieve total revenue of CNY 167.2 billion, CNY 188.4 billion, and CNY 210.0 billion for the years 2025 to 2027, representing year-on-year growth rates of 10.0%, 12.6%, and 11.5% respectively [3][4]. - The projected net profit for the same period is CNY 15.8 billion, CNY 19.7 billion, and CNY 23.1 billion, with year-on-year growth rates of 19.6%, 24.5%, and 17.3% respectively [3][4]. - The earnings per share (EPS) are expected to be CNY 1.82, CNY 2.27, and CNY 2.66 for 2025 to 2027 [3][4]. - The current stock price corresponds to a price-to-earnings (PE) ratio of 24.8, 19.9, and 17.0 for the years 2025 to 2027, indicating a potential premium of 10%-25% compared to the estimated valuation range of CNY 49.98 to CNY 56.79 [3][4].