According to the data from the National Bureau of Statistics, in September 2024, the month-on-month PPI value of the chemical pharmaceutical active pharmaceutical ingredient manufacturing was 97.10, an increase of 2.0 from the previous month, and an increase of 1.63 from the average of 95.47 in the first half of 2024. Since the year 2023, when the year-on-year PPI of the active pharmaceutical ingredient manufacturing dropped below 100, the recent PPI values have been on the rise, indicating that the overall prices of active pharmaceutical ingredients are in a slightly bottoming out and recovering phase.
Zhongtong Finance & Economics APP learned that GF Securities released research reports stating that in 2024, downstream formulation customers have nearly completed destocking, most customers have resumed normal stocking, and some customers have started to gradually replenish inventory. In addition to the continuous volume increase of new active pharmaceutical ingredient varieties after the patent expiration, the sector is in a bottoming out and stabilizing recovery phase. Currently, prices of antibiotics products have seen significant increases, with prices fluctuating at high levels; prices of hormone products have remained relatively stable, with slight price increases in the upstream. However, it is still important to note that prices of various categories of active pharmaceutical ingredients are still significantly influenced by supply, and it is recommended to actively monitor changes in industry supply.
GF Securities' main points are as follows:
The price of active pharmaceutical ingredients is stabilizing at the bottom.
According to data from the National Bureau of Statistics, the year-on-year PPI value for the manufacturing of active pharmaceutical ingredients in September 2024 is 97.10, an increase of 2.0 compared to the previous month, and up 1.63 from the average of 95.47 in the first half of 2024. Since the year-on-year PPI for active pharmaceutical ingredient manufacturing fell below 100 in the entire year of 2023, the recent PPI values have been on the rise, indicating that the overall price of active pharmaceutical ingredients is in a slight recovery phase after reaching a low.
The prices of specialty active pharmaceutical ingredient products are fluctuating at the bottom.
According to data from Healthy Net, for example, the price of hypertension products such as Valsartan in October 2024 is 710 yuan/kg, and it has remained stable for over a year in the price range of 710-720 yuan/kg (June 2023 - October 2024); for hyperlipidemia products such as Atorvastatin calcium, the export price in October 2024 is 1300 yuan/kg, also stable at this price for over a year (June 2023 - October 2024). This indicates that the downward cycle of prices for specialty active pharmaceutical ingredients has basically ended, and the current prices are at the bottom with fluctuations, awaiting subsequent price elasticity.
In recent years, the prices of antibiotic products have significantly increased, causing high price fluctuations.
According to data from Health.com, the price of the upstream 6-APA of penicillin products in October 2024 was 350 yuan/kg, slightly higher than the average price of 320 yuan/kg in Q2 2024. The upstream 7-ACA of cephalosporin products in October 2024 was priced at 480 yuan/kg, maintaining stability in price over the past six months (from April 2024 to October 2024). Prices of penicillin and cephalosporin upstream products are both at high and fluctuating levels. The price of 4-AA in October 2024 was 700 yuan/kg, a 50% decrease from 1400 yuan/kg in January 2024. The current price of 4-AA at 700 yuan/kg has remained at a low level for a quarter (from August 2024 to October 2024), basically reaching a bottoming-out and stabilizing phase.
The prices of hormone products have remained stable, with slight increases in upstream prices.
According to data from Health.com, the prices of hormone products' upstream materials have slightly increased. The price of double bonds in October 2024 was 1.08 million yuan/ton, compared to 0.95 million yuan/ton in the same period last year (October 2023), showing a slight increase in price. Other hormone prices have remained stable, with the price of progesterone in October 2024 at 19.5 million yuan/ton, maintaining stability for over a year (from August 2023 to October 2024); the price of hydrocortisone in October 2024 is 56 million yuan/ton, also stable for more than a year (September 2023 to October 2024).
The price of veterinary drug products, such as florfenicol, has basically stabilized at the bottom.
The quote for florfenicol in September 2024 was 180 yuan/kg. After a decline from a high price, the price of florfenicol has been in the range of 180-210 yuan/kg for nearly a year (from November 2023 to September 2024). Taking into account the production and manufacturing costs of the products, some companies have entered a loss-making operation phase. We expect the industry to enter a phase of supply clearing.
Investment advice
It is recommended to pay attention to Zhejiang Xianju Pharmaceutical (002332.SZ), Apeloa Pharmaceutical (000739.SZ), Zhejiang Huahai Pharmaceutical (600521.SH), Zhejiang Tianyu Pharmaceutical (300702.SZ), Aurisco Pharmaceutical (605116.SH), Zhejiang Ausun Pharmaceutical (603229.SH), etc.
Risk warning: Market competition risk, eco-friendly concept risk, and industry industrial policy risk.
