Vitamin leader Xinhecheng's quantity and price both increased in the first half of the year

Vitamin prices have skyrocketed, and this leading domestic vitamin company has seen a significant increase in performance in the first half of the year.

On August 22, Zhejiang Xinhecheng Co., Ltd. (Xinhecheng, 002001) announced that in the first half of 2024, the company achieved a revenue of 9.845 billion yuan, a year-on-year increase of 32.7%; Net profit was 2.204 billion yuan, a year-on-year increase of 48.62%; Basic earnings per share were 0.71 yuan, a year-on-year increase of 47.92%.

Xinhecheng stated that during the reporting period, the company's main product market prices were restored, and revenue growth was mainly affected by the increase in sales and prices of products such as methionine and vitamins.

Xinhecheng is one of the four major vitamin manufacturers in the world. It is mainly engaged in the production and sales of vitamins and other nutrients, essence and fragrances, polymer materials, and APIs. It focuses on the field of fine chemicals, and develops various functional chemicals with two core technology platforms: "Chemical+" and "Biological+".

In the first half of the year, the average market prices of the main products of Xinhecheng Nutritional Products, including vitamin D3, vitamin B2, vitamin B6, vitamin B12, vitamin C, and solid methionine, increased by 7.5%, 14.5%, 19.3%, 5.2%, 16.3%, and 25.2% year-on-year, respectively.

Among them, the price of methionine products increased significantly, coupled with the increased production capacity of 150000 tons of methionine in the second phase of Xinhe Cheng. This business achieved a revenue of 3.21 billion yuan, an increase of over 80% year-on-year, and a net profit of 1.18 billion yuan, an increase of 161% year-on-year.

It is worth noting that in the first half of the year, the prices of Xinhecheng Vitamin A and Vitamin E slightly decreased compared to the same period last year, but overseas demand was good. The cumulative exports of Vitamin A and Vitamin E in the first half of the year increased by 17.4% and 29.5% year-on-year, respectively.

In terms of products, in the first half of the year, Xinhecheng Nutritional Products achieved a revenue of 6.68 billion yuan, a year-on-year increase of 38.3%, accounting for 67.86% of the total revenue; The revenue of essence and spice business was 1.925 billion yuan, up 17.94% year on year, accounting for 19.55% of the total revenue; The new materials business achieved a revenue of 722 million yuan, a year-on-year increase of 24.89%, accounting for 7.34% of the total revenue.

Looking at different regions, in the first half of the year, Xinhecheng's domestic revenue was 404 million yuan, a year-on-year increase of 23.81%, accounting for 44.71% of the total revenue; Overseas revenue was 5.44 billion yuan, a year-on-year increase of 40.9%, accounting for 55.26% of the total revenue.

Affected by BASF's announcement that its vitamin A and vitamin E have encountered force majeure and are expected to resume production as early as January 2025, domestic vitamin prices have further increased.

According to data from Boya Hexun, as of August 22, the average market price of vitamin A was about 330 yuan/kg, and the average market price of vitamin E was about 162 yuan/kg, up 355% and 173% respectively from the beginning of the year.

China Merchants Securities stated that as we enter the third quarter, the prosperity of the vitamin industry continues to rise, especially after the explosion accident at BASF's Ludwigshafen site in Germany and the declaration of force majeure, the prices of vitamin A and vitamin E continue to rise significantly, and the profitability of the Xinhecheng Nutritional Products sector is expected to increase significantly.

Xinhecheng stated that during the reporting period, the development and construction of the company's new projects and products proceeded in an orderly manner. In the nutrition sector, the methionine project has achieved 300000 tons/year of product production and sales; The construction of the 180000 tons/year liquid methionine (converted to pure) project, a joint venture between the company and China Petroleum&Chemical Corporation, is steadily advancing. In the essence and fragrance sector, the series of aldehyde projects, SA projects, and the first phase project of the spice industrial park are steadily advancing.

In addition, in July of this year, Xinhecheng announced its intention to invest 10 billion yuan in the construction of a nylon new material project in the Nangang Industrial Zone of Tianjin. Among them, the first phase of investment is about 3 billion yuan, constructing a 100000 ton/year adiponitrile hexamethylenediamine project; The second phase plans to invest approximately 7 billion yuan, with a planned construction of 400000 tons/year of adiponitrile hexamethylenediamine, and an extension of the 400000 tons/year nylon 66 project to the downstream material end.

As of the close on August 23rd, Xinhe Chengbao reported a price of 19.24 yuan per share, with a total market value of 59.469 billion yuan.