The main line of price increases has been hotly discussed recently, such as the recent surge in vitamin prices...

In the past few days, stocks like Garden Biotech and Zhejiang Medicine, which are related to vitamins, have all seen strong upward momentum and continue to set new highs for the phase.

Although some differentiation has occurred, many leading companies are still in the main wave of the upward trend, so let's consider the long-term logic.

Besides those super sectors, many excessive alpha opportunities will be distributed in niche tracks like vitamins, which are "small but beautiful."

Today, let's focus on discussing the investment opportunities in vitamins.

In addition to the super tracks of technology stocks like chips, AI, and smart driving that have been continuously attracting traffic recently, there are actually many niche opportunities in the market worth paying attention to, such as the vitamin sector that has been hot for a while.

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However, it may be that the technology track has been too hot recently, and many people may not have paid much attention to this track.

But once you start paying attention, you might be surprised because vitamins have been a bit volatile recently.

"Rise, rise, rise," the price increase of vitamins continues.

Looking at individual varieties, data shows that the market price of vitamin E on July 23 has risen from less than 60 yuan/kg at the beginning of the year to 90 yuan/kg, an increase of more than 50%; the price of vitamin D3 is even more crazy, and the current price has risen to 215 yuan/kg, more than double the increase from less than 60 yuan/kg at the beginning of the year.

Looking back, the price of vitamin D3 has also seen several rounds of significant increases in recent years, such as a super bull market in the first quarter of 2020.

Looking at this round of the market, it seems that there is no signal of vitamin D3 reaching its peak and turning.

The significant increase in vitamin prices has also driven a group of concept stocks to perform strongly.

Let's take a look at the secondary market performance of some typical companies, with a focus on mentioning that many are setting new highs with increased trading volume and are still in the main wave of the upward trend.

For example, Garden Biotech, which claims to have a designed production capacity of 3,600 tons/year for feed-grade vitamin D3 and 540 tons/year for food-grade vitamin D3.

On Tuesday of this week, the company's share price once surged by more than 8% during the trading day, setting a new high for nearly two years.

Since February of this year, the company's share price has rebounded along the 60-day moving average, and since February 6, the share price has more than doubled.

Another example is Zhejiang Medicine, which recently stated that its life nutrition product segment includes vitamin D3, and vitamin A is currently in a profitable state.

Looking at the secondary market, the share price of Zhejiang Medicine has recently started to rise rapidly, and it is also with increased trading volume.

From February 6 to May 9 of this year, the company's share price has risen by 30%, and then there was a round of adjustment; on June 18, a new round of increases started, and so far, it has risen by 30%, setting a new high for nearly a year.

Let's look at another company, Adisseo, whose main business involves animal nutrition products, including vitamins.

Since July 9, the company's share price has started a new round of the market, and so far, it has risen by 15%.

This round of the market since the low point on February 6 has risen by 60%, setting a new high for nearly two years.

Vitamins are a relatively niche track, with many industry market participants, and it is a relatively fully competitive market.

Let's do a little popular science here and talk about the basic situation of vitamins.

Vitamins include many types, mainly vitamin A, B, C, D, E, mainly function together with enzymes to participate in the metabolism of the body, to effectively regulate the body's functions, and are trace organic substances obtained from food to maintain normal physiological functions in humans and animals, playing an important role in growth, metabolism, and development.

Looking at the downstream demand side, it mainly comes from downstream fields such as feed, food, and medicine.

So, what are the reasons for the price increase of vitamins?

What is the sustainability like?

Let's continue to talk about this aspect.

Overall, it is still the fluctuation in prices caused by the mismatch between supply and demand.

For the price increase of vitamins, many listed companies have given some answers.

Xinhecheng stated that the main vitamin products of the company are mainly used as feed additives in the downstream breeding industry, and as the downstream recovers, there will be a certain impact on the upstream demand.

Looking at this year, the prices of many vitamins have increased, mainly vitamin E prices are stable, and the recent increase is large, and vitamin A has also increased.

Zhejiang Medicine stated that the recent warming of vitamin E prices is due to the combination of channel inventory levels and the current supply structure of the product being relatively stable.

The downstream of vitamin E, the dominant demand is still the breeding industry, that is, the demand for feed-grade.

The profit expectations of the breeding industry are also gradually improving, so in the short and medium term, it is believed that demand has been repaired compared to before.

It also stated that the order situation of vitamin E in the first half of this year has warmed up compared to last year.

In addition to the demand side, the supply side is also an important factor stimulating the price increase of vitamins, such as the shutdown factor.

Huaxin Securities has a view that during the high-temperature period of July-August in the summer, vitamin companies choose to shut down for maintenance, which is more conducive to stabilizing the supply and demand relationship and accelerating price increases.

Recently, varieties such as VE, VD3, and VB1 have been active in price increases and stable quotes.

This round of vitamin price increases and increased downstream demand is also being reflected and verified in the performance of listed companies.

Huaxin Securities believes that considering the recent increase in the varieties of vitamins, it is expected that from the second or third quarter of 2024, the profits from price increases will gradually become visible.

Recently, many vitamin concept stocks have published the performance forecast of this year's mid-term report in advance, and many have achieved significant growth in performance.

Companies like Adisseo, Shengda Bio, North China Pharmaceutical, and Yifan Pharmaceutical have all achieved double growth in the 2024 mid-term report, and Xinhecheng's pre-increase limit is 50.00%.

Let's take an example to expand on this, Xinhecheng is expected to achieve a net profit of 2.077 billion yuan to 2.225 billion yuan in the first half of 2024, a year-on-year increase of 40% to 50%, and it stated that the performance growth is related to the increase in sales volume and price of the main products in the company's nutrition business segment compared to the same period last year; Adisseo is expected to make a profit of 550 million yuan to 650 million yuan in the first half of the year, with a year-on-year pre-increase range of 1547% to 1846%.

Another company has achieved a turnaround.

Shengda Bio is expected to achieve a net profit of 18 million yuan to 22 million yuan in the first half of the year, turning from a loss to a profit year-on-year.

Regarding the reason for the performance growth, it stated that it is related to the revenue growth of pharmaceutical-grade vitamin products and so on.

Looking at a longer cycle, many companies have seen performance repair in this year's first-quarter report, such as Yifan Pharmaceutical, Garden Biotech, and Xinhecheng, all of which have achieved more than 30% growth in performance this year, and Yifan Pharmaceutical's performance growth has doubled.

In addition, looking at the profitability aspect, the gross profit margins of most companies are in a relatively high and stable state.

Looking at this year's first-quarter report, the sales gross profit margins of Garden Biotech, Yifan Pharmaceutical, Goldway, Xinhecheng, and Zhejiang Medicine are all above 30%.

For the gross profit margin and net profit indicators of vitamin companies, you can see below.