In 2024, with relatively low inventory levels, some downstream formulation companies began to replenish inventory, coupled with the continuous release of new active pharmaceutical ingredients after the expiration of patents, the sector is in a bottoming stabilization and rebound state.
According to the report released by GF Securities obtained by the Wisdom Finance app, the bottoming stabilization of raw material prices, in August 2024, the raw material PPI index is 95.10, an increase of 0.6 from the previous month. The raw material price system shows a slight trend of bottoming out and rebounding. In addition, according to data from Health Net, the prices of upstream hormone products have slightly increased. In July 2023, the price of dienes was 0.9 million yuan/ton, and thereafter the price continued to rise, breaking through to 1 million yuan/ton in April 2024, and further increasing to 1.08 million yuan/ton in August 2024. In 2024, with relatively low inventory levels, some downstream formulation companies began to replenish inventory, coupled with the continuous release of new active pharmaceutical ingredients after the expiration of patents, the sector is in a bottoming stabilization and rebound state. Prices of various categories in the future are still greatly influenced by supply; it is recommended to actively monitor changes in industry supply.
GF Securities' main points are as follows:
The bottoming stabilization of raw material prices. According to data from the National Bureau of Statistics, the PPI value of chemical pharmaceutical raw material manufacturing month-on-month fell below 100 in January 2023 (the data for January 2023 was 99.60, compared to 100 the same month last year), with the price decline mainly due to downstream customers destocking. Throughout 2023, the PPI of raw material manufacturing was below 100 each month, reaching a low point of 94.4 in May-June 2023. In August 2024, the raw material PPI index is 95.10, an increase of 0.6 from the previous month, showing a slight trend of bottoming out and rebounding for the raw material price system.
Characteristic raw material product prices are bottoming out with fluctuations. According to Health Net data, prices of certain hypertension products decreased to varying degrees in the second half of 2023, remaining stable from January to July 2024, and entering a low-level fluctuation state from August to September 2024. Among lipid-lowering products, the prices of atorvastatin and lovastatin have recently decreased significantly, currently at the lower end of the price range, while simvastatin has experienced a certain degree of price increase.
In recent years, antibiotic products have experienced significant price increases, with penicillin products showing higher price increases than cephalosporins. According to Health Net data, the prices of upstream penicillin products (6-APA and penicillin industrial salt) saw a slight decrease in 2024 Q2 compared to 2024 Q1, but started to increase from July 2024. However, prices of downstream penicillin products (amoxicillin, ampicillin) started to slightly decrease from February 2024. Cephalosporin products have seen a slight increase in the price of 7-ACA since 2024, reaching 450 yuan/kg in January 2024, further increasing to 480 yuan/kg in April 2024 and maintaining this level to date. The price of 4-AA has slightly fluctuated downward in 2024, with 1400 yuan/kg in January 2024, dropping to 1000 yuan/kg in February 2024, and further dropping to 720 yuan/kg in July 2024.
Among cephalosporin products, since 2024, the price of 7-ACA has slightly increased, reaching 450 yuan/kg in January 2024 and further increasing to 480 yuan/kg and has remained at this level since April 2024. The price of 4-AA has slightly fluctuated downward in 2024, with 1400 yuan/kg in January 2024, dropping to 1000 yuan/kg in February 2024, and further dropping to 720 yuan/kg in July 2024.
The prices of hormone products basically remained stable, with upstream prices slightly increasing. According to Health.com data, the upstream prices of hormone products have seen a slight increase. The price of 2023M7 dienes is 0.9 million yuan per ton, and then the price continues to rise, breaking through 1 million yuan per ton in 2024M4, and further increasing to 1.08 million yuan per ton in 2024M8.
The price of veterinary drug fluopyramine products is basically stable at the bottom. According to Health.com data, fluopyramine has been impacted by synthetic biology, and the price has been continuously decreasing since 2021Q4. The price of fluopyramine has continuously declined from the highest price of 725 yuan/kg in 2021M10 to 188 yuan/kg in 2024M7.
Investment advice: In 2024, with relatively low inventory levels, some downstream formulation companies have started replenishing inventory. In addition, with the continuous release of new active pharmaceutical ingredients after patent expiration, the sector is at the bottom and stabilizing for a rebound. The prices of various categories will continue to be greatly affected by supply. It is recommended to actively monitor changes in industry supply. Regarding specific targets, it is recommended to focus on 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.
