The Zhitong Finance App learned that Huafu Securities released a research report saying that due to the explosion, BASF delayed the resumption of vitamin E and A production. After the news was announced, vitamin E and vitamin A quickly stopped falling and rebounded. Domestic manufacturers will also make up for some of the market gaps caused by the BASF explosion. Taking vitamin E as an example, they exported 103.2189 million tons in September 2024, an increase of 41.4% over the previous year. It is expected that both volume and profit will rise. It is expected that this round of market will be able to deliver on the performance of manufacturers.

The main views of Huafu Securities are as follows:

BASF delayed the resumption of vitamin E and A production, and vitamin E exports continued to increase sharply year-on-year, and we are optimistic that subsequent results will continue to be realized

On October 17, 2024, BASF updated the estimation of when the product will be put into production after the accident. In terms of fragrance ingredients, the production schedule for white flower alcohol, methyl violanone 70, and DL-menthol FG is estimated to be in line with expectations and is expected to begin in the last week of October 2024. For other products, previously announced estimates of production times need to be adjusted. Production of the remaining fragrance ingredients is expected to resume in stages from April to June 2025, starting with B-violanone products.

In terms of nutritional raw materials, it is currently expected that production of vitamin A will resume in early April 2025, and production of vitamin E and carotenoid products will resume in early July 2025. After the news was announced, vitamin E and vitamin A quickly stopped falling and rebounded. Domestic manufacturers will also make up for some of the market gaps caused by the BASF explosion. Taking vitamin E as an example, they exported 103.2189 million tons in September 2024, an increase of 41.4% over the previous year. It is expected that both volume and profit will rise. It is expected that this round of market will be able to deliver on the performance of manufacturers.

Key varieties of vitamins

Vitamin E: As of October 25, the price was 130 yuan/kg, down -7.5 yuan/kg from 137.5 yuan/kg at the end of the previous month, or -5.5%. BASF announced that the resumption of vitamin E production was delayed until early July 2025. Vitamin E prices quickly stopped falling and rebounded, and domestic manufacturers will also make up for some of the market vacancies caused by the BASF explosion.

Vitamin A: As of October 25, the price was 180 yuan/kg, down -45 yuan/kg from 225 yuan/kg at the end of the previous month, or -20%. BASF announced the resumption of vitamin A production

The time was delayed until April 2025, and the price of vitamin A quickly stopped falling and rebounding, but it is also necessary to note that all processes of Wanhua Chemical's 0.048 million tons/year citral plant were successfully put into test run and successfully produced qualified products. Its vitamin A is expected to be put into production by the end of the year, and industry competition will intensify at that time.

Vitamin D3: As of October 25, the price was 242.5 yuan/kg, down -22.5 yuan/kg from 265 yuan/kg at the end of the previous month, or -8.5%. Currently, major manufacturers have basically stopped reporting and signing, and the market mainly consumes inventory.

Downstream pig profits have declined, and white feather chicken profits have recovered

Pigs: In September, the number of breeding sows in the country was 40.62 million, up 0.26 million from August, an increase of 0.6%; the number of commercial pigs (sample companies) kept was 36.44 million, up 0.2789 million from August, an increase of 0.8%. Pig companies' profits have improved markedly since May, and have declined slightly recently. As of October 25, 2024, the profit of self-raised pigs was 8.86 yuan/kg, down 1% from the end of the previous month.

Chicken: As of October 25, the average price of white feather broiler in the main production area was 7.53 yuan/kg, up 0.43 yuan/kg from the end of last month; white feather broiler breeding profit was -2.29 yuan/feather, down 0.82 yuan/feather from the end of last month.

Investment advice

It is recommended to focus on Zhejiang Pharmaceutical (600216.SH) and Xinhecheng (002001.SZ), which have benefited from the price increase of vitamin A and vitamin E; Garden Biology (300401.SZ), which has benefited from the increase in the price of vitamin D3.

Risk warning

Demand fell short of expectations; companies changed equipment due to force majeure; raw material prices rose sharply.