Fine chemicals: Focus on the uptrend of the sector and subdivision industry leaders

In 2018, the total output value of the chemical industry was 13.7 trillion yuan, accounting for 15.2% of the national GDP and about 40% of the global chemical output value, ranking first in the world. In the past ten years, the growth rate of fixed asset investment in the chemical industry is overall in the declining channel, so relying on expanding investment, the mode of production capacity will be more and more difficult, and taking the high value-added route is the inevitable choice in the future, we are optimistic about the leading companies with the integration ability of the industrial chain and the ability to continue to grow in the field of fine chemical industry.

1 Vitamins: Focus on VA, VE, biotin and coenzyme Q10

Vitamins are a kind of trace organic substances that humans and animals must obtain from food in order to maintain normal physiological functions. The technical barriers to vitamin production are high, the process technology is complex, and the pollution is heavy, so China's vitamin industry has been blocked by Western countries for a long time. After about 20 years of development, the world's vitamin industry has gradually formed a three-way pattern of DSM, BASF and Chinese enterprises, and the production capacity is mainly located in China. In 2018, China's vitamin production was about 328,000 tons, accounting for 77% of global production, of which 247,000 tons were exported, accounting for 75% of China's production, and the export value was 2.45 billion US dollars. The main factors affecting China's vitamin industry are downstream demand, environmental regulation and safety.

Vitamin A: Short-term supply constraints due to the BASF condensate tower accident

Vitamin A is a fat-soluble vitamin, also known as retinol or anti-dry eye factor. It was discovered by Elmer McCollum and M. Davis between 1912 and 1914. It cannot be synthesized in humans and animals or is not synthesized in sufficient quantities, so although the amount required is small, it must often be supplied by food. Vitamin A technical barriers are high, production capacity is concentrated in a few large production enterprises, few new entrants. 

Vitamin E: the supply of raw materials is limited and the production of special technology is discontinued, and the price has entered the medium and long term rising channel

Vitamin E is a fat-soluble vitamin, also known as tocopherol, which has strong antioxidant capacity, can regulate the metabolic function of the nucleus, promote the development of animal gonads, improve the body's immune ability and reproductive ability. Feed is the main downstream of vitamins, accounting for about 48%, and nearly 70% of VE are used as feed additives, the rest are used for medicine and cosmetics, and a small amount is used for food and beverage. According to GlobalMarket Insights, Inc., the global vitamin E market size will grow at a compound growth rate of 3.5% from 2016 to 2024.

Biotin: Benefit from the capacity gap, the price increase continues

Biotin is one of the vitamin B group, also known as vitamin H, vitamin B7, coenzyme R, involved in fat, sugar, protein metabolism, is an indispensable vitamin to maintain body health. In 2002, China's Fudan University broke through the biotin industrial synthesis technology, greatly reducing its production cost and time. Since then, China has gradually become the main production base of biotin in the world, and more than 90% of the world's biotin is produced in China.

Biotin supply: oligopoly pattern, highly concentrated industry: Compared with the market demand for tens of thousands of tons of vitamin A and vitamin E, biotin belongs to the small industry in vitamins, and the market size of biotin is about 957 million yuan in 2018. In 2018, global biotin demand was 230 tons, an increase of 4.55%. Among them, China's biotin demand of 40 tons, an increase of 25%; Foreign demand 190 tons, an increase of 1.06%, China's demand growth faster than the global demand growth. In 2018, China's biotin production was 295 tons, an increase of 5.35%, and China's biotin production growth rate was faster than the global demand growth. The small market size coupled with stable demand growth, resulting in the demand for biotin quickly can not keep up with the pace of China's biotin manufacturers to expand production. The global biotin industry has maintained a state of nominal overcapacity since 2012.

Coenzyme Q10: Benefiting from the capacity gap, the price increase continues

coenzyme Q10 (coenzyme Q10), commonly known as vitamin Q, also known as ubiquinone, decanoquinone, is one of the indispensable elements of human life, plays an important role in the mitochondrial respiratory chain electron transport and the production of adenosine triphosphate. Coenzyme Q10 has many pharmacological effects such as scavenging free radicals and improving immunity. It can effectively protect and improve the functions of liver, brain, heart and nervous system, effectively protect cardiovascular system and prevent Alzheimer's disease. It is widely used as antioxidant and immunomodulatory drugs, health products and functional food additives. The global demand for coenzyme Q10 is about 800 tons, the demand growth rate is 8-10%, and the market size is about 350 million US dollars. The downstream demand for coenzyme is mainly used in the field of health care, and the demand for dietary nutritional supplements accounts for 60%, followed by cosmetics and medicinal fields, accounting for 25% and 15%, respectively.