Bailong Chuangyuan(SH:605016) Guoxin Securities·2024-04-29 02:30Investment Rating - The report maintains a "Buy" rating for the company with a target price of 26.31 CNY [8][45]. Core Insights - The company, Bailong Chuangyuan, is a leading producer of prebiotics, dietary fibers, and healthy sweeteners in China. In 2023, it achieved a revenue of 868 million CNY, a year-on-year increase of 20.3%, and a net profit of 193 million CNY, up 28.0% year-on-year [8][18]. - The dietary fiber segment saw a revenue of 444 million CNY in 2023, growing by 31.1%, with a gross profit of 173 million CNY, an increase of 49.1% [8][27]. - The health sweetener segment generated 137 million CNY in revenue, a 44.9% increase, driven by strong overseas demand for allulose [8][22]. Financial Forecasts and Metrics - Revenue projections for 2024-2026 are 1,265 million CNY, 1,651 million CNY, and 1,946 million CNY, respectively, with corresponding net profits of 281 million CNY, 383 million CNY, and 466 million CNY [8][40]. - The company's EBIT margin is expected to improve from 22.6% in 2023 to 27.1% by 2026, while the return on equity (ROE) is projected to rise from 12.8% to 17.8% over the same period [8][40]. - The price-to-earnings (PE) ratio is forecasted to decrease from 33.9 in 2023 to 14.0 by 2026, indicating a more attractive valuation as earnings grow [8][40]. Market Trends and Competitive Position - The global dietary fiber market is projected to grow from 180.64 billion CNY in 2019 to 229.13 billion CNY by 2026, with a compound annual growth rate (CAGR) of 8.9% [8][27]. - The company is expanding its production capacity with a new facility in Thailand, which is expected to reduce costs and enhance international competitiveness [8][24][32]. - The demand for allulose, a healthy sweetener, is rapidly increasing in overseas markets, particularly in baking, candy, beverages, and pharmaceuticals [8][22][24].