Plum Group: No Extreme Tailai, MSG and Amino Acids or Double Reversal

slightly lower-than-expected results
CaFPlum Shares achieved operating income of RMB7.78 billion in 2013, up 4.2% YoY, and net profit attributable to shareholders of listed companies was RMB404 million, down 33.58% YoY, due to weak market demand and lower product prices, while earnings per share was RMB0.13, slightly lower than our expectationsCaFtrends
CaFMSG industry consolidation is drawing to a close, and the 2014 industry reversal will help performanceDuring the reporting period, MSG and glutamate achieved operating income of RMB3.640 billion, accounting for 46.79% of total sales revenue, but due to the competitive integration of the industry and other factors, the price of large packages of MSG decreased by 10.94% YoY, glutamate price decreased by 10.4% YoY, and the gross profit margin of products decreased by 3.39% YoYThis round of industry consolidation began in 2011, and 33% of the 11 MSG production enterprises in China have lost 33% of their production capacity for nearly two yearsAgainst the backdrop of increasing environmental tightening, we expect the consolidation of the MSG industry to be completed and a new cycle to begin in 2014Plum Group accounted for 20% of the domestic MSG production capacity in the second place, will significantly benefit from MSG price increase performance to achieve a doublingCaF
The effects of avian influenza fade away and amino acid sales will reboundIn 2013 due to events such as H7N9, the overall farming situation was depressed, product prices entered historic lows, and the demand for amino acids declinedCompared to 2012, the average sales price of susine decreased by approximately RMB746 per ton, and the gross margin decreased from 25.93% to 14.67%We expect that with the cross-border migration of avian influenza, its impact will gradually fade, with the expansion of the company's amino acid product production capacity, the company's cost advantage will be more prominent CaF
　　New products further optimize the product structure, xanthan gum and Prolando sugar began to contribute to profit The high gross margin new products laid out by the Plum Group will gradually contribute to the performance in 2014 The company's independent research and development successfully broke through the technical difficulties of Prundo sugar, 300 tons of production capacity has been completed, the company's pharmaceutical raw materials to become a new growth point of profit While Huangyuan glue is expected to fall in price but the profit margin is still above average, will gradually begin to contribute to the company's profits CaF slightly lower than expected
CaF Plum Shares achieved operating income of RMB7.78 billion in 2013, up 4.2% YoY, and net profit attributable to shareholders of listed companies was RMB404 million, down 33.58% YoY, due to weak market demand and lower product prices, while earnings per share was RMB0.13, slightly lower than our expectations CaF trends
CaF MSG industry consolidation is drawing to a close, and the 2014 industry reversal will help performance During the reporting period, MSG and glutamate achieved operating income of RMB3.640 billion, accounting for 46.79% of total sales revenue, but due to the competitive integration of the industry and other factors, the price of large packages of MSG decreased by 10.94% YoY, glutamate price decreased by 10.4% YoY, and the gross profit margin of products decreased by 3.39% YoY This round of industry consolidation began in 2011, and 33% of the 11 MSG production enterprises in China have lost 33% of their production capacity for nearly two years Against the backdrop of increasing environmental tightening, we expect the consolidation of the MSG industry to be completed and a new cycle to begin in 2014 Plum Group accounted for 20% of the domestic MSG production capacity in the second place, will significantly benefit from MSG price increase performance to achieve a doubling CaF
　　The effects of avian influenza fade away and amino acid sales will rebound In 2013 due to events such as H7N9, the overall farming situation was depressed, product prices entered historic lows, and the demand for amino acids declined Compared to 2012, the average sales price of susine decreased by approximately RMB746 per ton, and the gross margin decreased from 25.93% to 14.67% We expect that with the cross-border migration of avian influenza, its impact will gradually fade, with the expansion of the company's amino acid product production capacity, the company's cost advantage will be more prominent CaF
　　New products further optimize the product structure, xanthan gum and Prolando sugar began to contribute to profit The high gross margin new products laid out by the Plum Group will gradually contribute to the performance in 2014 The company's independent research and development successfully broke through the technical difficulties of Prundo sugar, 300 tons of production capacity has been completed, the company's pharmaceutical raw materials to become a new growth point of profit While Huangyuan glue is expected to fall in price but the profit margin is still above average, will gradually begin to contribute to the company's profits CaF
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