ANGEL YEAST(SH:600298) Guoxin Securities·2026-01-22 00:45Investment Rating - The report assigns an "Outperform" rating to the company, marking the first coverage of the stock [5]. Core Insights - The company is a leader in the Chinese yeast industry and the second-largest yeast producer globally, with a focus on yeast and deep-processing products. It has a total fermentation capacity of 400,000 tons and expects to achieve a revenue of 15.197 billion yuan and a net profit of 1.325 billion yuan in 2024 [1][3]. - The yeast industry is characterized by an oligopolistic market structure, with the top three companies holding over 70% of the market share globally. The company holds a 55% market share in China, leading the domestic market [1][42]. - The company has established a global production and R&D system, enhancing its competitive barriers. It has invested in local production facilities to stabilize supply and mitigate raw material price fluctuations [2][3]. Summary by Sections Company Overview - The company has been deeply involved in the yeast industry for 40 years, evolving from a local state-owned enterprise to a global giant. It produces a wide range of products, including bread yeast, yeast extract, and nutritional health products, with sales channels spanning over 160 countries [13][15]. Market Position and Financial Performance - The company has a strong financial outlook, with projected revenues of 16.723 billion yuan in 2025, reflecting a 10% year-on-year growth. The net profit is expected to reach 1.585 billion yuan, a 19.6% increase [3][4]. - The company’s gross margin is projected to improve due to declining raw material costs, particularly sugar molasses, which accounts for approximately 40% of total costs [2][27]. Growth Drivers - The company’s growth is supported by two main engines: the expansion of its overseas business, which is expected to increase its revenue share from 28% in 2020 to 38% in 2024, and the rising demand for yeast extract as a natural flavoring agent [2][3]. - The company maintains a robust R&D investment, with a research expense ratio consistently above 4%, which has led to a strong patent portfolio and enhanced bargaining power with downstream customers [2][3]. Industry Characteristics - The yeast industry is capital-intensive, with high barriers to entry due to the significant investment required for production facilities. The company’s capital expenditure per unit capacity is 10-18 times that of the seasoning industry [1][48]. - The price of sugar molasses, a key raw material, is closely linked to white sugar prices and exhibits cyclical fluctuations. The company anticipates a downward trend in sugar molasses prices by 2025, which will support profit recovery [1][56]. Valuation - The report estimates a reasonable valuation range for the company’s stock between 49.98 and 56.79 yuan, indicating a potential premium of 10%-25% compared to the current stock price of 45.33 yuan [5][3].