High vitamin price industry is expected to usher in boom cycle

Due to the spread of overseas public health events and global concerns about drug shortage, API production and export have become the focus of market attention. On April 17, the vitamin concept stocks in the A-share market all strengthened, among which, Huabei pharmaceutical and Huayuan biology rose by more than 5%, Guangji pharmaceutical, jindawei and brother technology all rose by more than 5%. Analysts believe that the rising price of vitamin varieties is mainly due to the supply shortage pattern caused by the global public health events, and there is still room for upward price in the short term.

At present, the domestic vitamin concept related listed enterprises include more than ten pharmaceutical enterprises, including XinHeCheng, Zhejiang Pharmaceutical, jindawei, Huayuan biology, brother technology, Northeast Pharmaceutical, Guangji pharmaceutical, North China Pharmaceutical and Yifan pharmaceutical. According to the first quarter performance forecast of 2020 disclosed by Xinhe daily, the company expects to achieve a net profit of 868 million yuan to 970 million yuan in the first quarter, a year-on-year increase of 70% to 90%. XinHeCheng said that during the reporting period, the sales price and sales volume of vitamin A, vitamin E, biotin and other products increased compared with the same period of last year, and the company's net profit increased year on year.

Jindawei expects the company to achieve a net profit of 170 million yuan to 236 million yuan in the first quarter of 2020, with a year-on-year growth of 30% to 80%. Jindawei said that the company's net profit increased year on year mainly due to the rising price of vitamin and coenzyme Q10 raw materials.

Yifan medicine and brother technology are also expected to rise in the first quarter. On April 14, Yifan pharmaceutical disclosed its forecast for the first quarter of 2020. The company expects to make a profit range of 280 million yuan to 340 million yuan, an increase of 90% to 130% compared with the same period of 2019. Yifan pharmaceutical said that the company's net profit in the first quarter increased significantly compared with the same period last year due to the large increase of vitamin series products in the reporting period. On the same day, brother technology released the performance forecast that due to the increase of the sales price of relevant vitamin products, the gross profit rate of the company's products has been improved. The company expects the net profit in the first quarter of 2020 to be 18 million yuan to 23.4 million yuan, turning a loss year on year, with a loss of 25.42 million yuan in the same period of last year.

Ping An Securities Research Report shows that China is the largest country in vitamin production. Feed additive is the main application field of vitamin, accounting for about 70%, the remaining 20% is used in medicine and cosmetics, and 10% is used in food and beverage. In 2019, China's vitamin output is about 349000 tons, an increase of 4.4% year on year, accounting for 77.0% of the global output.

At the same time, most of China's vitamin demand comes from export. In 2019, China exported 269000 tons of vitamins, with an export rate of 77.1%. VC accounted for the highest proportion of export varieties, accounting for 54.3% of the total, followed by 24.2% of VE, accounting for 78.5% of the total.

Recently, affected by the spread of global public health events, the prices of VA, VE, VB1, biotin, VK3 and other vitamin varieties have increased. The agency believes that the main reason lies in the supply shortage pattern caused by the global public health events. Considering that there are still uncertainties in the start-up of the current vitamin overseas market, the pressure on the supply side of the vitamin industry is hard to change in the short term; while the demand side is expected to continue to drive the demand for feed and vitamins with the recovery of the domestic pig breeding industry, and the high vitamin price continues to benefit the development of Companies in the industry.

Zhang Lichao, senior researcher of Guoxin Securities, said that from the supply side, for example, vitamin manufacturers in Germany and the Netherlands were directly impacted by public health events, and the intermediate links such as logistics and transportation were blocked, which led to a substantial reduction in the inventory of some traders and a gradual tightening of the spot supply. From the demand side, vitamin feed is a must consumption of the breeding industry One of the products, feed demand is rigid and will not be delayed or delayed due to public health events. To a certain extent, it will increase by panic replenishment, which will drive the price to rise rapidly.

Guosheng securities analysis pointed out that under the background of public health events, the vitamin industry is expected to usher in a long cycle of prosperity, and the impact of subsequent supply is expected to continue to push up the price of vitamin.

Zhang Lichao believes that the future vitamin price still depends on the development trend of global public health events. In the short term, there is still room for prices to continue to rise, and it is expected that supply and demand will remain tight within the year. The profits of vitamin raw material manufacturers, especially the leading enterprises, will increase significantly. However, for the vitamin health products and pharmaceutical industry, there is a long transition period from the rise in the price of APIs to the rise in the price of finished drugs. Even if the price of finished products rises, it will often be lower than the rise in the price of raw materials. Therefore, the impact on the performance of related listed companies also depends on the fundamentals of the follow-up market and the supply and demand situation.

                                                                                                                                                         By Shen siqi