Plum biology: lysine and other performance is depressed, multi-species balanced development.

In the past two years, part of the amino acid production capacity like snowball-like rapid expansion, supply pressure, this year lysine, methionine, sucone market price decline, and continue to hover in the low range, this impact on manufacturers how, related manufacturers and how to deal with it? According to Meihua Bio's 2018 semi-annual report, the company achieved operating income of 62.87 billion yuan in the first half of the year, an increase of 12.16% YoY, and a net profit of 469 million yuan, a decrease of 24.31% YoYQ2 achieved operating income of RMB 3.08 billion, an increase of 7.48% YoY, and net profit attributed to the parent company of RMB221 million, down 20.53% YoYUmZ UmZlysine, Susine market downturn, net profit fell significantly UmZMeihua company's main products for the production and sales of amino acid products, including feed amino acids, sodium glutamate, flavored nucleotide di sodium and other products accounted for more than 80% of total operating incomeAs can be seen from the chart above, Meihua company's first-half operating income continued to grow year-on-year, while net profit fell for the first time in nearly 5 years, operating income continued to grow because of the increase in sucone sales, huangyuan gum and some small varieties of amino acid prices, while the decline in profits mainly due to lysine, sucthane first half downturn, price decline, in addition to rising costs, government subsidies are also related factorsSee Plum Bio's review of the lysine and suthine markets in the semi-annual report (see 1, 2 below)UmZ UmZMeihua Company established a third production base in Baicheng, Jilin Province, during the reporting period, the construction of the Baicheng base in accordance with the established plan, the first phase will be completed with an annual output of 400,000 tons of lysine production capacity, the plan is to complete the fourth quarter of 2018 trialIn addition, in the second half of the year there will be Dongxiao, Weifeng and other manufacturers to release new production capacity, so the second half of the lysine market supply pressureUmZ(1) Lysine: During the reporting period, the feed amino acid industry's overall performance in the first half of the year was weakDue to the increase in raw material costs, the increase in production costs of lysine, the obvious weakening of manufacturers' profits, serious losses in pig farming, the continued downturn in downstream demand, the rapid expansion of production capacity, a sharp reduction in exports, dragging down the market graduallyThe average price of lysine saline (98% lysine) decreased by 5% year-on-year, while the price of lysine sulfate (70% lysine) decreased by 17% year-on-year (source: Boa and News)UmZ(2) Susine: With the gradual release of domestic new susine production capacity, supply pressure increased, in order to ease the domestic competitive situation, the export orders of manufacturers increased, but due to the first half of the domestic pig breeding losses serious, egg and chicken column continued to decline, broiler column year-down, fundamental scarcity continued weakness, export sourine market prices continue to decline, is currently at the bottom of historyDuring the reporting period, the price of sulnine decreased by 2% YoY and decreased by 19% YoY UmZ domestic amino acid exportvolume surge, cost increase compression enterprise profitumZ Plum Biology said in the semi-annual report, based on the domestic fermentation amino acid production capacity continues to expand, corn storage system reform, production costs fell, domestic production enterprises in the global competitiveness to enhance, resulting in the last two years lysine, suline export volume surge Foreign enterprises such as taste of the vegetarian, Wintron and other factors such as price, profit and other factors in the global sales strategy is changing In the future, foreign enterprises will participate in the market competition in fermented amino acids using the model of patent licensing, custom production and global sales UmZ the macroeconomic environment at home and abroad in the first half of 2018 is complex and volatile compared to 2017 Domestically, "de-leveraging, risk control, environmental protection" is the main tone of the central government's work in the first half of the year, the domestic economic growth rate has shown signs of slowing down Environmental protection "look back" so that a large number of small and medium-sized enterprises shut down, some enterprises to increase investment in environmental protection, but also in the short term to push up the price of more basic raw materials Meihua company continued to invest 1-2 billion yuan per year for related equipment investment and environmental protection projects of technical reform, in this environmental protection "look back", Meihua company's environmental protection indicators all meet the standards, normal production, not affected In the first half of 2018, the relevant factors affecting the profits of Meihua Company are corn prices, coal prices, tax increases, etc., as detailed, for the increase in costs, Meihua Company through continuous improvement of production indicators and management level to reduce production costs, partially offset the increase in the cost of raw materials UmZ corn price increase: during the reporting period, the main raw material corn prices were affected by the market and national policies, the average price increased significantly compared with the first half of 2017, the national average corn price of 1823 yuan / ton, up 7.5% month-on-month, up 15.2% YoY, resulting in increased production costs of manufacturers During the reporting period, the purchase price of corn in Tongliao region increased by about 20% compared with last year, coal prices were basically flat, and corn in Xinjiang was basically the same as last year's purchase price through operation, but the price of coal rose by nearly 30%, and the average increase in the two places of accessories was about 30% UmZ Water Resources Tax and Environmental Protection Tax: In accordance with the decision-making and deployment of the CPC Central Committee and the State Council, the pilot of water tax reform has been expanded in nine provinces (autonomous regions and municipalities directly under the central government) in Beijing, Tianjin, Shanxi, Inner Mongolia, Shandong, Henan, Sichuan, Shaanxi and Ningxia since December 1, 2017 During the reporting period, corporate taxes and surcharges increased by 41.54 percentage points over the same period last year, mainly due to the increase in water and environmental taxes UmZ balanced development of multi-species, maintain ingenuity of profits UmZ Although the first half of the plum biological company's net profit decreased significantly, but the advantages of multi-product balanced development appeared, the taste nucleotide di sodium, jaundice and small varieties of amino acids in the company's main product price slack to maintain the company's profits For example, in the second quarter of environmental protection "look back" led to the closure of internal production capacity, the price of sodium glutamate began to gradually climb, the price of sodium glutamate increased by about 5% YoY during the reporting period; Huangyuan has continued its momentum since 2017, with a capacity of 50,000 tons after the expansion of capacity in 2017 During the reporting period, due to increased production capacity, new customer development and lower production costs, the overall sales volume, selling price and profit margin of Huangyuan gum increased significantly compared with last year, with sales increasing by about 50% and selling price increasing by about 20% UmZ Plum Product Classification includes animal nutrition amino acids, human medical amino acids, and food taste traits optimization During the reporting period, Meihua company through the reduction of efficiency, expand sales to enhance operating profit, make up for the impact of the decline in government subsidies on net profit, and use sunine, huangyuan glue and other products advantage capacity release, seize the market opportunity to achieve the price of sodium glutamate, nucleotide and huangraw gum products, product volume price advantage basically hedge the adverse effects of raw material price increases The good performance of misonucleotide disodium, jaundice and small varieties of amino acids in the first half of the year provided an effective supplement to the depressed prices of the main products of Meihua, suchelyine and lysine, and provided support for the company to hedge the profit fluctuations that may be brought about by market fluctuations in several products UmZ nearly two years, part of the amino acid production capacity like snowballrapid expansion, supply pressure, this year lysine, methionine, sucone market price decline, and continue to hover in the low range, this impact on manufacturers how, related manufacturers how to deal with it? According to Meihua Bio's 2018 semi-annual report, the company achieved operating income of 62.87 billion yuan in the first half of the year, an increase of 12.16% YoY, and a net profit of 469 million yuan, a decrease of 24.31% YoY Q2 achieved operating income of RMB 3.08 billion, an increase of 7.48% YoY, and net profit attributed to the parent company of RMB221 million, down 20.53% YoY UmZ UmZ lysine, Susine market downturn, net profit fell significantly UmZ Meihua company's main products for the production and sales of amino acid products, including feed amino acids, sodium glutamate, flavored nucleotide di sodium and other products accounted for more than 80% of total operating income As can be seen from the chart above, Meihua company's first-half operating income continued to grow year-on-year, while net profit fell for the first time in nearly 5 years, operating income continued to grow because of the increase in sucone sales, huangyuan gum and some small varieties of amino acid prices, while the decline in profits mainly due to lysine, sucthane first half downturn, price decline, in addition to rising costs, government subsidies are also related factors See Plum Bio's review of the lysine and suthine markets in the semi-annual report (see 1, 2 below) UmZ UmZ Meihua Company established a third production base in Baicheng, Jilin Province, during the reporting period, the construction of the Baicheng base in accordance with the established plan, the first phase will be completed with an annual output of 400,000 tons of lysine production capacity, the plan is to complete the fourth quarter of 2018 trial In addition, in the second half of the year there will be Dongxiao, Weifeng and other manufacturers to release new production capacity, so the second half of the lysine market supply pressure UmZ (1) Lysine: During the reporting period, the feed amino acid industry's overall performance in the first half of the year was weak Due to the increase in raw material costs, the increase in production costs of lysine, the obvious weakening of manufacturers' profits, serious losses in pig farming, the continued downturn in downstream demand, the rapid expansion of production capacity, a sharp reduction in exports, dragging down the market gradually The average price of lysine saline (98% lysine) decreased by 5% year-on-year, while the price of lysine sulfate (70% lysine) decreased by 17% year-on-year (source: Boa and News) UmZ (2) Susine: With the gradual release of domestic new susine production capacity, supply pressure increased, in order to ease the domestic competitive situation, the export orders of manufacturers increased, but due to the first half of the domestic pig breeding losses serious, egg and chicken column continued to decline, broiler column year-down, fundamental scarcity continued weakness, export sourine market prices continue to decline, is currently at the bottom of history During the reporting period, the price of sulnine decreased by 2% YoY and decreased by 19% YoY UmZ domestic amino acid exportvolume surge, cost increase compression enterprise profitumZ Plum Biology said in the semi-annual report, based on the domestic fermentation amino acid production capacity continues to expand, corn storage system reform, production costs fell, domestic production enterprises in the global competitiveness to enhance, resulting in the last two years lysine, suline export volume surge Foreign enterprises such as taste of the vegetarian, Wintron and other factors such as price, profit and other factors in the global sales strategy is changing In the future, foreign enterprises will participate in the market competition in fermented amino acids using the model of patent licensing, custom production and global sales UmZ the macroeconomic environment at home and abroad in the first half of 2018 is complex and volatile compared to 2017 Domestically, "de-leveraging, risk control, environmental protection" is the main tone of the central government's work in the first half of the year, the domestic economic growth rate has shown signs of slowing down Environmental protection "look back" so that a large number of small and medium-sized enterprises shut down, some enterprises to increase investment in environmental protection, but also in the short term to push up the price of more basic raw materials Meihua company continued to invest 1-2 billion yuan per year for related equipment investment and environmental protection projects of technical reform, in this environmental protection "look back", Meihua company's environmental protection indicators all meet the standards, normal production, not affected In the first half of 2018, the relevant factors affecting the profits of Meihua Company are corn prices, coal prices, tax increases, etc., as detailed, for the increase in costs, Meihua Company through continuous improvement of production indicators and management level to reduce production costs, partially offset the increase in the cost of raw materials UmZ corn price increase: during the reporting period, the main raw material corn prices were affected by the market and national policies, the average price increased significantly compared with the first half of 2017, the national average corn price of 1823 yuan / ton, up 7.5% month-on-month, up 15.2% YoY, resulting in increased production costs of manufacturers During the reporting period, the purchase price of corn in Tongliao region increased by about 20% compared with last year, coal prices were basically flat, and corn in Xinjiang was basically the same as last year's purchase price through operation, but the price of coal rose by nearly 30%, and the average increase in the two places of accessories was about 30% UmZ Water Resources Tax and Environmental Protection Tax: In accordance with the decision-making and deployment of the CPC Central Committee and the State Council, the pilot of water tax reform has been expanded in nine provinces (autonomous regions and municipalities directly under the central government) in Beijing, Tianjin, Shanxi, Inner Mongolia, Shandong, Henan, Sichuan, Shaanxi and Ningxia since December 1, 2017 During the reporting period, corporate taxes and surcharges increased by 41.54 percentage points over the same period last year, mainly due to the increase in water and environmental taxes UmZ balanced development of multi-species, maintain ingenuity of profits UmZ Although the first half of the plum biological company's net profit decreased significantly, but the advantages of multi-product balanced development appeared, the taste nucleotide di sodium, jaundice and small varieties of amino acids in the company's main product price slack to maintain the company's profits For example, in the second quarter of environmental protection "look back" led to the closure of internal production capacity, the price of sodium glutamate began to gradually climb, the price of sodium glutamate increased by about 5% YoY during the reporting period; Huangyuan has continued its momentum since 2017, with a capacity of 50,000 tons after the expansion of capacity in 2017 During the reporting period, due to increased production capacity, new customer development and lower production costs, the overall sales volume, selling price and profit margin of Huangyuan gum increased significantly compared with last year, with sales increasing by about 50% and selling price increasing by about 20% UmZ Plum Product Classification includes animal nutrition amino acids, human medical amino acids, and food taste traits optimization During the reporting period, Meihua company through the reduction of efficiency, expand sales to enhance operating profit, make up for the impact of the decline in government subsidies on net profit, and use sunine, huangyuan glue and other products advantage capacity release, seize the market opportunity to achieve the price of sodium glutamate, nucleotide and huangraw gum products, product volume price advantage basically hedge the adverse effects of raw material price increases The good performance of misonucleotide disodium, jaundice and small varieties of amino acids in the first half of the year provided an effective supplement to the depressed prices of the main products of Meihua, suchelyine and lysine, and provided support for the company to hedge the profit fluctuations that may be brought about by market fluctuations in several products UmZ .