GF Securities: The bottom of API prices stabilized, and diphenylene prices increased slightly

The Zhitong Finance App learned that GF Securities released a research report saying that the bottom of API prices stabilized. 2024M8, the API PPI index was 95.10, an increase of 0.6 over the previous month, and the API price system showed a slight upward trend. In addition, according to data from Health Network, there was a slight increase in the upstream price of hormone products. The price of M7 diene in 2023 was 900,000 yuan/ton. Since then, the price has continued to rise, breaking through 1 million yuan/ton in 2024M4 and further increasing to 1.08 million yuan/ton in 2024M8. In 2024, at a low inventory level, some downstream pharmaceutical companies began to restock, compounding the continuous release of new drug types after the patent expires. The sector is in a steady upward state at the bottom. Prices of various categories will still be affected to a large extent by supply in the future. It is recommended to actively pay attention to changes in industry supply

The main views of GF Securities are as follows:

The bottom of API prices stabilized. According to data from the National Bureau of Statistics, the year-on-year PPI value of chemical raw materials fell below 100 in January 2023 (2023M1 data was 99.60, same month of the previous year = 100). The decline on the price side was mainly due to downstream customers removing inventory. Throughout 2023, the PPI for the month of API manufacturing was below 100, and the 2023 M5-M6 API PPI index reached its lowest level, at 94.4. 2024M8, the API PPI index was 95.10, an increase of 0.6 over the previous month. The API price system showed a slight upward trend.

Prices of specialty API products fluctuated at the bottom. According to Health Network data, the prices of some hypertensive products declined by varying degrees in the second half of 2023. The 2024M1-M7 price was basically stable, and the 2024M8-M9 price fluctuated at a low level. Among high lipid products, the prices of atorvastatin and lovastatin have dropped significantly recently. They are in the middle and lower levels of the price range, and the price of simvastatin has increased to a certain extent.

Prices of antibiotic products have increased significantly in recent years, and the price increase of penicillin products is higher than that of cephalosporins. According to Health Network data, the prices of upstream penicillin products (6-APA and penicillin industrial salt) fell slightly from 2024Q1, but prices all began to rise in 2024M7, but the downstream prices of penicillin products (amoxicillin, ampicillin) have declined slightly since 2024M2.

Among cephalosporin products, the price of 7-ACA has increased slightly since 2024. The 2024M1 was 450 yuan/kg, and the 2024M4 was further raised to 480 yuan/kg, and has remained so far. In 2024, the 4-AA price fluctuated slightly. The 2024M1 was 1,400 yuan/kg, the 2024m2 dropped to 1,000 yuan/kg, and the 2024M7 price dropped to 720 yuan/kg.

Prices of hormone products have remained stable, and upstream prices have increased slightly. According to data from Health Network, the upstream price of hormone products increased slightly. The price of M7 diene in 2023 was 900,000 yuan/ton. Since then, the price has continued to rise, breaking through 1 million yuan/ton in 2024M4, and further rising to 1.08 million yuan/ton in 2024M8.

The price of the veterinary drug fluphenicol has basically bottomed out and stabilized. According to Health Network data, fluphenicol was impacted by synthetic biology, and prices continued to decline from 2021/4. The price of fluphenicol continued to decline from the highest price of 725 yuan/kg in 2021 M10 to 188 yuan/kg in 2024 M7.

Investment advice: In 2024, at a low inventory level, some downstream pharmaceutical companies began to replenish inventory, compounding the continuous release of new drug types after the patent expires. The sector is in a steady upward state at the bottom. Prices of various categories will still be affected to a large extent by supply in the future. It is recommended to actively pay attention to changes in industry supply. At the target level, it is recommended that attention be paid to Xianju Pharmaceutical (002332.SZ), Pluo Pharmaceutical (000739.SZ), Huahai Pharmaceutical (600521.SH), Tianyu Co., Ltd. (300702.SZ), Orient (605116.SH), Aoxiang Pharmaceutical (603229.SH), etc.

Risk warning: market competition risk, environmental risk, industry policy risk.