Plum Group: MSG prices and amino acid heavy volume, and promote the future performance of higher flexibility

Company MSG prices are expected to enter the rising channel, driven by stable growth performance.

China's MSG market demand for the total 1.55 million tons, exports close to 300,000 tons, production and sales of about 200 million tons, basically in the supply and demand balance. With the industry leading enterprises in the main contribution to the profit of the main business convergence, the manufacturer of the game will be different from the past, industrial concentration and capacity elimination policy stack, the future industry average ex-factory price into the rising channel probability is great. The current ex-factory price average of 7500 yuan or so, is still higher than the June price. Assuming next year the average price is higher than the average price of 2013 800 yuan / ton, according to 25% tax rate measured EPS contribution of about 0.1 yuan / share. Livestock and poultry feed demand growth, driven by the company to accelerate the development of amino acid business.

In the national economy, per capita income and population growth, and urbanization and other factors, driven by the demand for livestock and poultry aquatic products will continue to maintain a rigid growth, China's feed industry has ushered in a historic opportunity, which will lead the amino acid industry boom rise. China's threonine market demand in 2015 will reach 130,000 tons, while exports will continue to grow, the company's production scale and comprehensive market share for the world's second; 2015 China's lysine demand will reach 550,000 tons, the company Sales target and threonine sales synergies reached 100%; glutamine international market demand to an average annual rate of 8% -10% increase, the company is one of the five producers around the world; tryptophan demand is also substantial improve. In addition, China's annual output of about 10,000 tons of nucleotides, still can not meet the market demand, the company's market competitiveness is strong; China's annual output of about 700 tons of proline, while the domestic demand of more than 1,500 tons, the company has advantages, Sales and isoleucine business can be used with mature pharmaceutical grade amino acid sales network.

Other business is expected to become the company development Aspect.

Such as Xanthan gum and the company raised funds project has turned to relatively small output value but the income and gross margin is relatively high project, the future is expected to replace the monosodium glutamate business as the company's development Aspect.

Performance flexibility, the next few years the higher the net profit growth rate

The company 2013 / 2014EPS were 0.15 / 0.31 yuan, 2013-2015 net profit CAGR 61%, although the relative valuation of 13PE is not low, but given the future business development of high performance flexibility, investors can focus on investment opportunities, Give "recommended" rating.


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