Bailong Chuangyuan(SH:605016) Guoxin Securities·2024-05-29 08:02Investment Rating - The investment rating for the company is "Outperform the Market" [6][28][38] Core Viewpoints - The company is a leading domestic producer of prebiotics, dietary fibers, and healthy sweeteners, with a focus on high-end products. Recent adjustments in product structure and production optimization have led to an increase in gross margins to industry-leading levels. The demand from downstream customers is continuously growing, and the company’s production lines are operating at full capacity. The launch of new projects, including 30,000 tons of dietary fiber and 15,000 tons of crystalline sugar, will significantly alleviate capacity constraints and enhance revenue and profit [1][2][38]. - The new production capacity will allow the company to further optimize its product matrix and meet diverse customer needs. This will also reduce production costs associated with switching between different products on existing lines, thereby lowering management costs [1][2][38]. - The company has established itself as a pioneer in the production of allulose, a new generation of healthy natural sweeteners, which has seen rapid growth in overseas demand. The recent launch of a 15,000-ton crystalline sugar project will help meet the needs of downstream food processing companies [3][4][19]. Financial Projections - The company is projected to achieve revenues of 12.65 billion, 16.51 billion, and 19.46 billion yuan for the years 2024, 2025, and 2026, respectively, with net profits of 2.81 billion, 3.83 billion, and 4.66 billion yuan for the same years. The current stock price corresponds to P/E ratios of 27.1, 19.9, and 16.3 for 2024, 2025, and 2026, respectively [38]. - The dietary fiber segment achieved a revenue of 444 million yuan in 2023, reflecting a year-on-year growth of 31.1%. The production volume reached 43,216.37 tons, up 53.26%, and sales volume increased by 58.32% to 42,622.79 tons. The new capacity for dietary fiber is expected to drive revenue growth by 36%-57% [35][38]. Strategic Developments - The company is investing 452 million yuan in a production base in Thailand, which will help reduce production and transportation costs due to the availability of cheaper raw materials. This strategic move is expected to enhance the company's international competitiveness and support its international development strategy [5][22][37].