Event: from July 1, vitamin D3 implemented the new national standard. According to the new national standard, the starting material of vitamin D3 oil is lanolin cholesterol, which limits the use of brainstem cholesterol. Lanolin has become the only legal source for the production of vitamin D3.
NF lanolin cholesterol is the core raw material of VD3 production, and Garden Biology has a global market share of more than 50%. According to the purity and grade, lanolin cholesterol is mainly divided into BP grade (purity > 91%), NF grade (purity > 95%) and high purity grade (purity > 99%). At present, NF grade lanolin cholesterol is used in the production of vitamin D3. At present, the global lanolin cholesterol production enterprises are mainly Chinese Garden Biology, India Dishman, Japan refined Chemical, Singapore Enkai and other enterprises. Garden creatures have more than 50% of the global and Chinese market share, according to the state antitrust bureau.
The entry barrier of NF lanolin cholesterol market is high, the environmental protection standard is difficult and the cost is high, so it is difficult to appear new effective competitors in the short term.
After the implementation of the new national standard, the production capacity and small factories that use raw materials other than lanolin cholesterol to produce VD3 will be eliminated, the industry will be cleared, and the concentration will be enhanced, which will benefit the leading enterprises. According to the State Anti-monopoly Bureau, the global and Chinese veterinary and human vitamin D3 markets are highly concentrated, with the top five major competitors accounting for more than 90% of the market share. DSM and Garden Biology rank in the top two places in the global and Chinese veterinary vitamin D3 market, with a combined share of more than 50%. The main global vitamin D3 manufacturers are Garden Biology (with a capacity of 4000t feed grade VD3 oil + 100t25-hydroxy VD3), Holland DSM, Xinhe Cheng (capacity 2000t), Jindawei (capacity 1000t), Taizhou Haisheng (Xianli Pharmaceutical holding subsidiary), India FERMENTA, Zhejiang Pharmaceutical, etc. (note: the above production capacity data are from the company announcement and investor interaction platform). Among them, the current Jindawei VD3 production capacity of 1000 tons, annual production of 200t vitamin D3 oil project is progressing smoothly, is expected to enter the trial production phase in the first half of 2021. Jin Dawei said on the interactive platform that the company has produced vitamin D3 products for many years and has a variety of measures for raw material procurement to ensure the safe production and stable supply of the products. After the implementation of the new national standard, it is conducive to further enhance the concentration of the VD3 industry, the price center is expected to maintain a high level, good for leading enterprises.
Investment suggestion: this year, Jindawei coenzyme Q10 is expected to make a profit of more than 600 million yuan, vitamin An and D3 is expected to make a profit of about 600 million, and brand health products are expected to earn more than 100 million. It is estimated that the company's EPS from 2020 to 2022 is 2.04,2.35,2.60 yuan, corresponding to PE is 13.1,11.3 and 10.2 times, respectively, maintaining a "highly recommended" rating.
Risk hints: market expansion is less than expected, downstream demand is lower than expected, product prices fall sharply, raw material prices fluctuate sharply, risks of environmental protection, risks of production safety