Vitamin boom rebounded! NHU Q1 net profit increased by 76%

NHU recently released a financial report showing that the company's operating income in 2019 was 7.621 billion yuan, -12.23% year-on-year, and net profit attributable to the mother was 2.169 billion yuan, -29.56% year-on-year, and 5 yuan was distributed for every 10 shares; 2.62 billion yuan, + 42.68% year-on-year, and net profit attributable to the mother was 901 million yuan, + 76.51% year-on-year.

Demand in 2019 is affected by swine fever, and the 2020 Q1 vitamin boom has fully recovered. In 2019, vitamin prosperity dropped from a high level, and domestic swine fever affected feed demand. The company's main vitamin varieties have declined in different degrees. However, in recent years, the company's spices, methionine and PPS businesses have developed rapidly, and their overall ability to withstand cyclical fluctuations has improved. 18Q2-19Q4 company can maintain a profit of about 500 million in a single quarter. The gross profit margin for 2019Q4 was 48.68%, an increase of 1.42 percentage points from the previous month, while the increase in management, research and development, and financial expenses caused the performance to decrease by 15.81% from the previous month to 463 million yuan. Global supply of vitamins is tight in 2020Q1, and prices of VA, VE, VD3, VH, and methionine have all increased. The company's Q1 performance mainly benefited from the price increase of biotin, coenzyme Q10 and VE, with a gross profit margin of 51%, an increase of 4.4 percentage points year-on-year and an increase of 2.32 percentage points from the previous month. Considering the order lagging factor, the contribution of product price increases to performance will continue to be reflected in the second quarter.

The company embraces the overall prosperity of vitamins, and new projects are put into production to open up growth space. Vitamin prosperity has rebounded comprehensively. The company is a domestic vitamin leader, with VA production capacity of 10,000 tons, VE production capacity of 40,000 tons, biotin production capacity of 6,000 tons, and VD3 production capacity of 2,000 tons. The price increase of various varieties brings considerable performance elasticity. At the same time, the company is developing towards the leading of all categories. The 30,000-ton VC of the first-phase project of Heilongjiang has been trial-produced, and VB2 and VB12 are also in the future planning. The company has a high self-sufficiency rate of key raw materials for various vitamin varieties, and a low supply risk of raw materials. The company's production and supply are guaranteed, and the company can enjoy the prosperity dividends of the vitamin industry to the greatest extent. The first-phase project of Heilongjiang is an important foothold for the company's bio-fermentation product layout. The company has accumulated technical experience in fermentation products at Shangyu Base. This time, combined with the rich local raw material resources in Heilongjiang, it can create an industry cost advantage. In the first half of 2020, 100,000 tons of methionine will be put into production, and the total production capacity will be increased to 150,000 tons, because over 80% of the global production capacity is affected by the epidemic. The current methionine boom is recovering from the bottom of history. The increase in performance is expected to exceed expectations.