. Follow the environmental protection policy to buy stocks, will you definitely lose money? There is obviously a problem with this logic.
The original market view has always believed that environmental protection is just a "gust of wind" and is not very sustainable, but judging from the current inspection efforts of the environmental protection team, the intensity is far greater than any environmental protection inspection action in previous years. Because the facts have proved that " Kingsoft Silver Mountain has far less benefits than green mountains." As a result, some enterprises passively restrict production and relocation under the high pressure of environmental protection, resulting in frequent industry supply gaps.
Take Hebei and Shandong, a province with major raw material production provinces as examples. Some raw material companies have stopped production and restricted production, and the industry's supply has contracted significantly. The raw material varieties represented by vitamins and antibiotics intermediate have all experienced large-scale price increases. The largest increase, such as vitamin D3, calcium pantothenate, etc., have all accumulated an increase of more than 200%.
Raw material prices rose, directly driving the rise of related fund indexes. Zhitong Finance APP observation shows from the "500 Raw Materials" fund index of A-shares that the individual stock range has increased by more than 25 points since the beginning of this year, with a total volume of 3.818 billion shares and a total amount of 4016.756 billion yuan.
Market source: Futu Securities
Fund achieved a high end and implemented it on related stocks. People who also watch it are "ittingled". For example, Shiyao Group (01093), because Shijiazhuang's "sword to cut down the pollution", the company's stock price has exceeded the Hang Seng Index for a long time due to the positive price increase of raw materials such as vitamin C and caffeine, and is not inferior to the bull stocks in Hong Kong stocks at all. For example, Federal Pharmaceutical (03933), benefiting from raw materials, the interim performance in 2017 turned losses into profits...
is the industry that thinks that the high pressure of environmental protection has passed. Recently, the Ministry of Environmental Protection, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security and other 10 ministries and commissions, and the governments of six provinces (cities) including Beijing, Hebei, and Shandong jointly issued the "Action Plan for Comprehensive Control of Air Pollution in the Autumn and Winter of Beijing, Tianjin and Hebei and Surrounding Areas from 2017 to 2018".
This not only marks the resurgence of the wave of strict environmental protection, but also means that the raw material pharmaceutical industry will usher in a long-term rebound in prosperity against the backdrop of changes in the supply-side pattern, which is beneficial to related stocks. In a word, the stock prices of the above-mentioned companies are about to hit another high.
Environmental protection policy triggered the price of raw materials to rise across the board
supply is less than demand. Faced with such a scenario, you can only grab goods at high prices, and finally produce a "butterfly effect", and "counting money" is lying in the upstream of production, allowing consumers to "swear". For example, in the recent paper industry, policies require the reduction of production capacity, resulting in the high price of raw pulp. Papermakers can only spend more money to purchase raw pulp production. After the products are on the market, the prices have all risen. Consumers can only swallow their anger and buy toilet paper with unchanged quality and higher price to go to the toilet...
In fact, compared with the paper industry, the pharmaceutical industry, especially the raw material industry, is the same.
With the gradual strengthening of environmental protection awareness and the country's gradual attention to environmental protection, the policies on environmental protection in recent years have been "stricter than the other". Zhitong Finance APP found that in 5 years, no less than 10 major environmental protection policies have been issued.
For example, in 2012, the State Council issued the "Plan for Water Pollution Prevention and Control of Key River Basins", requiring the increase in structural adjustment of pharmaceutical and other enterprises, and the shutdown of "low, small, and scattered" enterprises with high pollution and high energy consumption; in April 2015, the "Ten Water Regulations" followed one after another, and raw material drug manufacturing was listed as one of the top ten key rectification industries; in 2016, the 13th Five-Year Plan for Environmental Protection, the raw material drug manufacturing industry was required to promote emission transformation in industry compliance; in November 2016, the Shijiazhuang government launched the "Shijiazhuang Air Pollution Prevention and Control Dispatch Order", requiring all raw material drug pharmaceutical companies in the city to stop production.
The policy has become stricter, and raw material manufacturers naturally implement the regulations, so the production that should be stopped will be suspended and the rectification will be rectified. As a result, the initial market oversupply of raw materials began to shortage, and price increases followed one after another.
Zhitong Finance APP observed that the raw material market rose sharply in 2016, which was comparable to that in 2008, and the prices of some products continued to rise. Taking vitamins as an example, the global market demand is about 150,000 tons, with a production capacity of about 200,000 tons. There are 6 major suppliers. Except for the DSM Scottish factory, the other five are in my country, namely Shiyao, Northeast Pharmaceutical , Huayao Weierkang, Jiangshan Pharmaceutical and Luwei Pharmaceutical. So far, the production capacity of these five manufacturers in my country has remained the same as the global vitamin market demand.Although
is becoming saturated with production capacity, from the perspective of exports, my country's vitamin export volume has grown rapidly in the past two years. As North America's share gradually declines, Europe's share has increased year by year, and the region has also become the engine of my country's sharp increase in vitamin exports in the past two years.
Against the backdrop of the surge in demand in Europe and the suspension of environmental protection production, the domestic market price of vitamin raw powder rose sharply in November 2016. The feed grade raw powder was raised to 38 yuan/KG, and the food grade was raised to 40 yuan/KG, an increase of more than 25% from the initial quotation of feed grade of 30 yuan/KG and the food grade of 32 yuan/KG. The price of pharmaceutical-grade vitamin C has been raised to 45 yuan/KG.
developed to September 2017, and vitamins had already increased. As of the latest quotation on September 4, vitamins nicotinamide, K3, B6 and biotin have been further improved, the VA market is still strong, and the D3 market is paying more attention.
Vitamins are the tip of the iceberg of raw materials, and the rise has scared away many buyers. It is conceivable that the pressure of environmental protection has made the price increase of raw materials the "normal".
Recently, the Ministry of Environmental Protection and 10 other ministries and commissions issued the "Action Plan for Comprehensive Control of Air Pollution in the Autumn and Winter 2017-2018 in Beijing-Tianjin-Hebei and Surrounding Areas", requiring all pharmaceutical and pesticide enterprises to stop production during the winter heating season, and the implementation scope includes cities such as Tianjin, Beijing, Shijiazhuang, Jinan, and Zhengzhou.
With such frequent policies, we can foresee that a new round of production suspension is imminent, and the price increase of raw materials has become a foregone conclusion.
The growth space of stone medicine continues to expand
price increase wave will naturally make major raw material medicine manufacturers happy. Take Shiyao Group, a leading domestic vitamin C company, for example. Due to Shijiazhuang Environmental Protection in December 2016, the company's vitamin C raw materials price rebounded. In January 2017, it raised its ex-factory price to 50,000 yuan/ton (the ex-factory price was 30,000 yuan/ton in mid-December), and currently it is 67,000 yuan/ton.
is favorable for price adjustment, and Shiyao's stock price has begun to rise in December 2016. Judging from the K-line trend, the stock rose by more than 53.66% in 187 trading days, with a total trading volume of 2.498 billion shares, an average price of 10.36 Hong Kong dollars, and an amount of 25.884 billion Hong Kong dollars, a complete blue-chip stock trend.
Market source: Futu Securities
From the interim performance in 2017, it can also be seen that the performance and stock prices both rose, and the raw materials made an indelible contribution. During the period, the company achieved revenue of approximately HK$7.202 billion, an increase of 17.2% year-on-year; gross profit of HK$4.125 billion, an increase of 35.9% year-on-year; net profit attributable to shareholders reached HK$1.313 billion, an increase of 27.1% year-on-year; basic earnings per share of HK$21.69, no interim dividend was paid.
00000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 During the period, the revenue of the business was HK$1.928 billion, an increase of nearly 16 percentage points from HK$1.666 billion in mid-2016.
Specifically, due to the sharp rise in Viagra prices, Shijiao's Viagra's Viagra's revenue increased by 12% to HK$760 million; while in terms of caffeine, due to the positive effects of exports (Coca-Cola) Abbott , Kraft , Nestlé) and the rise in price, the business increased by 53.1% during the period, about HK$548 million.
In accordance with environmental protection restrictions and market demand, the company's raw materials business is expected to continue to grow throughout the year. Investors may wish to continue to pay attention and wait for the right investment opportunities.
Federal Pharmaceuticals become the best target for raw materials
In addition to stone medicine, federal pharmaceuticals will also become the winner of raw materials. And because of the recovery of raw material business, the performance in the first half of 2017 has been significantly driven, and the loss-to-profit has been turned.
Zhitong Finance APP observed that in the mid-2017, the company achieved revenue of 3.34 billion yuan, a year-on-year increase of 12.7%; net profit of 109 million yuan, a loss of 13.48 million yuan in the same period last year; basic earnings per share of 6.71 points.
Why is it said that the recovery of raw materials business has driven the performance of Federal Pharmaceuticals? We might as well analyze the company's business, namely, selling intermediate products; selling raw materials; selling antibiotic preparation products, non-antibiotic preparation products and hollow capsules. Among them, in the first half of 2017, the revenue of intermediates was 1.43 billion yuan; the raw materials were 1.609 billion yuan. During the period 0, the company's intermediate and raw material segment profit margins were improved. In the first half of the year, due to the increase in raw material costs, environmental protection costs, and the national environmental protection verification promoted supply-side reform, the prices of intermediate raw material returned to a reasonable level and the profit margin was increased.The price of 6APA rose from 150 yuan to 210 yuan, and the orders were in short supply. Since Inner Mongolia began to implement mandatory zero emissions on January 1, 2018, the intensity of environmental protection will be further strengthened. The strengthening of environmental impact assessment will still have great uncertainty in the recovery time of competitors' production capacity, ranging from 1-2 months to 1-2 years, providing a time opportunity for Federal Pharmaceuticals in terms of competition.
In addition, at the performance meeting, the company's management also stated that the price increase orders have been implemented since July, and the prices of intermediate raw materials will have a possibility of further increase in the second half of the year. As
profits rose, the cost side of intermediates and raw materials also improved significantly. The capacity utilization rate of intermediate raw materials has improved significantly year-on-year, with 6APA rising from 70% to 96%, penicillin industrial salts rising from 32% to 95.7%, and semi-synthetic penicillin from 46.5% to 75.5%. The increase in capacity utilization rate has greatly reduced production costs. With the lack of year-on-year changes in prices in the first half of the year, the profitability of each section has been effectively improved.
and the current prices of 6APA and semi-synthetic penicillin remain above 210 yuan and 185 yuan/KG respectively. According to the existing capacity utilization rate, this growth rate is expected to maintain in the second half of the year. It is expected that this sector can maintain good elasticity in Federal Pharmaceutical's profits.
In general, in the context of stricter environmental protection and rising raw material prices, Federal Pharmaceuticals is still a good target. (Tian Yuxuan/text)
