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National Business Daily: increasing of monosodium glutamate improve the business performance; Meihua Biotechnology Q1 net profit was doubled

Opened in 2015 year Meihua creatures (600873, closed at 10.04 Yuan) ushered in the start of performance. On April 9, Meihua bio-bulletin, preliminary estimates by the Finance Department, 2015 is expected first quarter net profits attributable to shareholders of listed companies reached 180 million Yuan, and about 140% from a year earlier. The daily economic news reporter noted, this is the MSG industry downturn after years of company products prices rose for the first time.

For the explosive rally reason performance, Meihua biological capacity attributed to subsidiaries of Xinjiang Meihua amino acid releasing, the main product production and sales volume increases, as well as the market recovers. Call the reporter for the daily news to investment companies, Meihua Department of bio-security-related staff further said: "compared to the first quarter of 2014, packaging MSG sales in the first quarter of this year rose 40,000 tons, of which domestic growth 42.73%; threonine sales grew by 20,000 tons, an increase of 79.96%. ”

In addition to the increase in sales, company main product prices has steadily picked up. "Without tax calculation, which MSG about raising 5%, lysine prices increase by about 7%, tryptophan increases the maximum 25%. "The staff member said.

With capacity out of the industry restructuring and mergers and acquisitions, Meihua bio after the acquisition of biological and market share will further increase company's monosodium glutamate, threonine, lysine market share from 27%, 14%, 42% up to, 33%, 55%, and Fu forms a duopoly. Brokers believe that oligopolistic market structure will enhance the bargaining power of the market, monosodium glutamate and glutamic acid increases gateway to the business.

Meanwhile, Shen Wan Hongyuan believes that this helps to eliminate competition within the industry, promoting the steady growth of prices of monosodium glutamate and amino acid products. After the merger, Meihua creatures will become the industry's true giants./span>

In addition to market share expansion of industry capacity contracted prices created a good opportunity for the company. In recent years, as prices continue to slump, rising operating costs, monosodium glutamate and lysine products such as capacity continued contraction. Bureau of statistics, four times after 2010-2013 year after cutting capacity (eliminated capacity 750,000 metric tons for the period), the domestic capacity is reduced to about 2.67 million tons of monosodium glutamate, currently Fufeng + Meihua + product capacity market share of more than 70%, production market share of more than 90%.