The Zhitong Finance App learned that Changjiang Securities published a research report saying that vitamin D3 is a small variety in the vitamin industry and is mainly used in feed and other fields. In the long run, with the steady growth of the feed industry, there is a steady increase in demand. In the short term, domestic farming profits have improved, and downstream acceptance of vitamins has increased. Along with the removal of overseas stocks, the overall vitamin export performance in the first half of this year also showed strong resilience. Vitamin D3 is a high-quality supply industry with a high concentration of raw materials. Leaders have a large voice and are highly flexible in price. According to Boya Hexun, the supply pattern of the vitamin D3 industry, which is currently in the 59.5% quantile for 10 years, is improving. Demand has increased slightly, and prices are expected to gradually rise.

Vitamin D3 is an essential nutrient for humans and animals

Vitamin D3 is a trace organic substance necessary for human and animal growth. Vitamin D3, also known as cholecalciferol, has the most basic function of promoting intestinal absorption of calcium and phosphorus, increasing blood calcium and phosphorus levels, promoting bone calcification, and transforming it into the ultimate active substance 1α,25-hydroxyvitamin D3 in living organisms to exert physiological effects.

Demand side: Mainly used in feed and other fields, accounting for a relatively low cost

Vitamin D3 is mainly used in feed additives, healthcare, food additives and other fields. Normally, the amount of vitamin D3 added to each ton of feed is 3.4-6.9 g (0.5 millionIU/g off), and the corresponding cost is estimated to be 0.3-0.7 yuan (if the VD3 price is 100 yuan/kg), which accounts for a small proportion of downstream. It can be assumed that the downstream feed industry is less sensitive to VD3 prices. In the field of vitamins and amino acids used in animal feed around the world, different animal feeds correspond to different vitamin D3 addition ratios, and the corresponding demand for vitamin D3 is estimated to be 4100-8,400 tons. The human body needs an appropriate intake of vitamin D3 through food additives or health care products. According to estimates, the global dosage of vitamin D3 corresponding to health care and food additives is estimated to be around 1,900 tons. As a result, global demand for vitamin D3 is expected to rise to around 0.01 million tons. In the long run, with the steady growth of the feed industry, there is a steady increase in demand. In the short term, domestic farming profits have improved, and downstream acceptance of vitamins has increased. Along with the removal of overseas stocks, the overall vitamin export performance in the first half of this year also showed strong resilience. From January to May 2024, the vitamin industry exported 0.172 million tons, an increase of 13.5% over the previous year.

Supply side: raw material barriers, high overall concentration of the industry

The main source of vitamin D3 oil is lanolin cholesterol. Lanolin cholesterol can be obtained through purification, crystallization and other processes to obtain NF grade cholesterol (that is, cholesterol with a purity of 95% or more), and vitamin D3 can be further prepared. NF grade cholesterol is mainly controlled by several manufacturers such as Garden Biotech, India's Disman, Nippon Seika, and Singapore Enkai. Among them, the market share of Huayuan Biotech was as high as 57.5%, and the CR3 of the industry was as high as 91.8%. The world's nominal annual production capacity of vitamin D3 is about 0.018 million tons, and the industry's CR3 is 52.5%, CR5 is 74.3%. Among them, only Huayuan Biotech has upstream core raw materials, while other vitamin D3 manufacturers still need to purchase NF grade cholesterol or vitamin D3 oil from outside for production, so there is a difference in cost.

Price: Mainly influenced by the supply side, historically highly flexible

Historically, the price of vitamin D3 has often risen sharply due to supply-side changes, and each change shows greater price flexibility. VD3 ushered in a boom cycle in 2008-2009, mainly due to the recovery in feed demand, compounded by early discontinuation of production and technical reforms in part of production capacity; in 2016-2017, mainly due to environmental protection and supply-side reforms, enterprises ushered in a high boom; in 2021-2023, the vitamin industry experienced a period of downturn, while vitamins were gradually digested in overseas markets and a steady recovery in domestic demand, and the economy changed marginally. According to Boya Hexun, as of July 10, 2024, the price of vitamin D3 was 132.5 yuan/kg, up 134.5% from the price of 56.5 yuan/kg in mid-May. Currently, the supply pattern of the vitamin D3 industry, which is in the 59.5% quantile of 10 years, is improving, demand has increased slightly, and prices are expected to gradually rise.

Investment advice: optimistic about the upward trend in VD3

Vitamin D3 is a small variety in the vitamin industry, mainly used in feed and other fields. Along with the gradual digestion of overseas market inventories and a steady recovery in domestic demand, the product demand side was marginally catalysed. Vitamin D3 is a high-quality supply industry with a high concentration of raw materials. Leaders have a large voice and are highly flexible in price. It is recommended to focus on garden organisms.

Risk warning

1. The actual nominal overcapacity of the industry is, and there is a possibility that enterprises will significantly increase the number of construction starts. 2. 25-hydroxyvitamin D3 replaces vitamin D3.