Raw materials rise vitamin plate or usher in explosive market

Business Club March 30th The international pharmaceutical giant Dutch DSM announced a global increase in the price of vitamin products, industry sources said that domestic companies may follow up the price, vitamin plate or usher in an explosive market, but also A reminder said, "It is not advisable to blindly chase high."

On March 24th, the international pharmaceutical giant Dutch DSM announced that the company will increase the price of vitamin products on a global scale. All new business vitamin B2 and B6 prices increased by 15%, and all new orders for vitamin A, vitamin E, and calcium pantothenate increased by 10%. Affected by this, the domestic pharmaceutical companies of vitamin tablets rose on Friday. Xinfu Pharmaceutical (002019) rose more than 6%, Guangji Pharmaceutical (000952) and Xinhecheng (002001) also rose more than 5%.

An industry person interviewed by a reporter from the China Economic Times said that under normal circumstances, domestic related companies will follow the upward adjustment of product prices, and vitamin tablets in listed pharmaceutical companies may usher in an explosive market. However, there are also views that for the vitamin plate "should not blindly chase high."

Domestic companies or follow-up

It is reported that this is DSM's second price increase in March. What is the reason given by DSM for this price increase? Rising raw material prices, inflation and exchange rate changes have been factors in recent months. Domestic companies are affected by this and the pace of product price increases has accelerated.

"Japan's earthquake has brought insufficient supply of VE intermediates and it has become an important catalyst to promote price hikes. We believe that the increase in VA and VE quotes from Xinhecheng last week will become the starting point for this round of VA and VE price hikes." Industrial Securities R&D Center research report said.

The research report believes that the price increase of the DSM is not an end. It may be the beginning of the price increase cycle. After Japan's earthquake reconstruction, the corresponding chemical companies need 2 to 3 months to resume production. During this period, the supply of some vitamin intermediates will be very tight, and companies will continue to raise prices; while the downstream demand is rigid, and the demand is stable. increase. "As a result, we expect vitamin prices to continue for some time."

According to information from Boya He, since late March, the price of vitamin C has reversed from the historical bottom of 35 yuan/kg, reaching 45 yuan/kg. Under the combined influence of various factors such as the suspension of production of small businesses, the price of vitamin C has been rising. There will be a bottoming rebound but not much.

“VC is the most dominant species in bulk APIs. We expect that as the country’s management of exports becomes more stringent, small companies will have difficulty exporting. The advantages of large companies will be very obvious, and the price of products is expected to continue to rise.” Industrial Securities Research reported.

The report also stressed that for other small vitamin products, prices will follow up. For example, VB5 (Xinfu Pharmaceutical) and VB2 (Guangji Pharmaceutical) are among DSM's price increase products. "We believe domestic companies will follow the price increase."

In this regard, API manufacturers are more cautious. In the interview with this reporter, the relevant persons of Xinhecheng and Zhejiang Pharmaceuticals tried to avoid the price increase of the company. And Mr. Lu of Northeast Pharmaceutical (000597) told the reporter on the phone that whether or not the price increase of VC is a market behavior, “the company has not yet moved in this direction”.

Explosive market is coming?

Affected by the increase in raw materials, the vitamin plate rose significantly last week.

"The vitamins plate is one of the few rising sectors in the pharmaceutical industry recently... Since the recommendation, the vitamins plate has risen by about 30%." Industrial Securities Research reported that from a historical point of view, cyclical varieties entered the upward cycle, and share price rises generally have longer durations and larger increases. "So the current rise in vitamins can't be considered too large."

The report believes that the recent adjustment of vitamins does not mean that the market is over. Historically, stock prices fluctuate along with product prices. “And for some time in the future, the reason why vitamin prices continue to be bullish is enough ... what the market is worried about does not affect the price increase, so we continue to look at the multivitamin plate.”

“DSM, BASF, and New Hecheng have monopolistic desires for VE intermediates, and the trend is obvious. The price increase is inevitable and a trend.” Insiders told this reporter, “The vitamin series will follow up. Is the market, but the specific product prices rise how much remains to be seen."

According to Liu Yaming, a senior researcher at the Institute of Pharmaceutical Research at Founder Securities, the current VE's gross margin is 40%-50%, and the company's net interest rate is above 24%, which is already monopolistic excess returns for bulk API manufacturers. More than other companies. "The formation of price is the result of the game between the market supply and demand. As a manufacturer, in order to block new competitors and ensure market share, it does not tend to raise the price too high."

"Comprehensive judgment, the trend of product price increases is only a phase, will not form a big trend," Liu Yaming said, "but for investors, (the vitamin plate) should not blindly chase high."