MEIHUA BIO、MeiHua Group(600873) 申万宏源·2024-11-25 11:18Investment Rating - Maintains an "Overweight" rating for the company [3] Core Views - The company plans to acquire Kirin Holdings' subsidiary Kyowa Hakko Bio for 10.5 billion yen (approximately 500 million RMB), which includes food amino acids, pharmaceutical amino acids, and human milk oligosaccharides (HMO) businesses [3] - The acquisition will expand the company's product portfolio and accelerate its overseas strategic layout, particularly through overseas production bases [3] - In Q4 2024, the company's MSG product prices remain under pressure, but lysine and threonine prices have increased, leading to a significant improvement in profitability [3] - The company's Q4 2024 performance is expected to reach a new high for the year, driven by improved profitability in key amino acid products [3] Financial Summary - Revenue for 2024E is projected at 26,127 million RMB, with a year-on-year decline of 5.9% [4] - Net profit attributable to the parent company for 2024E is forecasted at 2,822 million RMB, a year-on-year decrease of 11.3% [4] - Gross margin for 2024E is expected to remain stable at 18.9% [4] - ROE for 2024E is projected at 16.6% [4] Market Data - The company's closing price on November 22, 2024, was 10.55 RMB [5] - The price-to-book ratio is 2.0, and the dividend yield is 5.65% [5] - The company's A-share market capitalization is 30,097 million RMB [5] Key Projects and Capacity Expansion - The company is rapidly expanding its production capacity, including projects such as the Tongliao MSG expansion and technical transformation, Xinjiang isoleucine technical transformation, and xanthan gum process improvement [3] - The Jilin lysine project has completed the approval process [3] Valuation and Earnings Forecast - The company's 2024-2026 net profit forecasts have been revised upward to 2,822, 3,118, and 3,512 million RMB, respectively [3] - The current market valuation corresponds to a PE ratio of 11X, 10X, and 9X for 2024-2026 [3]