①The high price of vitamins significantly boosts the performance of manufacturers; ②The Q2 net profit of Zhejiang Nhu reached a historical high in the same period; ③The company benefits from a high proportion of overseas business; ④The Q3 growth rate expands and manufacturers further benefit.
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Caixinshe News, August 22nd (Reporter Luo Yichen): The wave of rising prices for vitamins has greatly boosted the performance of manufacturers. In the first half of the year, Zhejiang Nhu (002001.SZ), a leading company, achieved a quarter-on-quarter increase in performance, and Q2 achieved a net profit attributable to shareholders of 1.335 billion yuan, a historical high in the same period.
Tonight, Zhejiang Nhu released its semi-annual report, with a revenue of 9.845 billion yuan in the first half of the year, a year-on-year increase of 32.70%, of which the net profit attributable to shareholders was 2.204 billion yuan, a year-on-year increase of 48.62%. Previously, many brokerages predicted that Zhejiang Nhu's full-year revenue and net profit attributable to shareholders in 2024 would increase by about 22.81% and 51.13% respectively. Considering that the price of the company's core product, vitamins, will further increase in the third quarter, if there are no unexpected events in the fourth quarter, it is no surprise that its full-year performance meets the market expectations mentioned above.
During the reporting period, the company's significant profit growth was mainly driven by the increase in volume and price of products such as lysine and vitamins. In the first half of the year, the revenue growth rate of the company's nutrition business, which includes vitamins, ranked first, reaching 38.30%, and the gross margin increased by 6.98 percentage points year-on-year, reaching 35.86%. Thanks to the strong performance of products such as vitamins, the company's operating cash flow has significantly strengthened, with a year-on-year growth of 73.06%.
It is worth noting that in the first half of the year, the main benefit enjoyed by vitamin manufacturers was the bullish trend in prices, and the significant increase in vitamin prices occurred in the third quarter. In this context, the Q2 performance reaching a historical high in the same period is not a common phenomenon in the industry. Zhejiang Medicine (600216.SH), which is also a major player in the vitamin industry, only achieved a net profit attributable to shareholders of 0.206 billion yuan in the second quarter of this year, which has not yet reached the previous high point in the same period of 2021.
The reasons for the performance difference among manufacturers are diverse. In addition to different business structures, Caixinshe reporters noticed that in the first half of the year, the export market for vitamins was stronger than the domestic market, and companies with a higher proportion of exports benefited more. During the reporting period, Zhejiang Nhu's export proportion reached around 55%, far exceeding the 31% export proportion of Zhejiang Medicine.
Looking ahead to the performance in the second half of the year, the current wave of rising prices for vitamins is still ongoing, which is becoming more favorable for leading companies. Market data shows that recently, vitamin A has gradually become the core category with price increases, and some manufacturers have started quoting a high price of 600 yuan/kg, far exceeding the quoted prices of vitamin D3 at 440 yuan/kg and vitamin E at 200 yuan/kg in the same period, showing a trend of the latecomers surpassing the previous ones. Some observers believe that the current domestic demand is still weak and it is difficult to support a simultaneous sharp increase in prices for multiple categories of vitamins. The surge in the price of vitamin A may indicate that manufacturers have selected it as the main promoted product.