Amino acids are the basic structures that make up protein macromolecules, and almost all life activities are related to them. As the material basis of life metabolism, amino acids play an extremely important role in the activity and physiological functions of biological macromolecules, and play a vital role in the fields of nutrition and health such as feed, food, medicine, culture media, and health care products.
According to the classification of nutritional functions, it can be divided into three types: essential amino acids, semi-essential amino acids and non-essential amino acids;
According to its metabolic pathway in vivo, it can be divided into ketogenic amino acids and sugar-forming amino acids;
According to the classification of chemical properties, it can be divided into neutral amino acids, acidic amino acids and basic amino acids, and most of the amino acids belong to neutral.
The production methods of amino acids include extraction, chemical synthesis and biological methods (including direct fermentation and enzymatic transformation).
The extraction method is limited by the limited protein raw materials and easy to cause environmental pollution, and is only used for the production of a few amino acids such as cysteine;
Chemical synthesis method: due to the harsh reaction conditions and the easy racemicization of the product, it is only used for the production of a few amino acids such as methionine and glycine;
The biological method has the characteristics of low raw material cost, mild reaction conditions, and easy large-scale production, so the biological method has become the main method for the production of amino acids.
With the rapid development of the global economy, especially the developed economies, which pay more attention to the health of nutritional intake, the world's amino acid industry has grown rapidly.
In terms of global market size, according to the data of Beijing Yanjing Bizhi Information Consulting, as of the end of 2020, the market size of the global amino acid industry was about 24 billion US dollars, a year-on-year increase of 27.66%, and the global market size further increased to about 28.5 billion US dollars in 2021, a year-on-year increase of 18.75%, and the global amino acid industry market size is expected to reach more than 50 billion US dollars in 2025, with a CAGR of about 15.09% from 2021 to 2025.
In terms of global market demand, according to the statistics of Beijing Yanjing Bizhi Information Consulting, the global market demand in 2020 was about 8 million tons, a year-on-year increase of 12.11%, and the global demand for amino acids in 2021 further increased to 8.62 million tons, an increase of 7.75% year-on-year, and the global demand for amino acids is expected to grow to more than 10 million tons in 2025, with a CAGR of about 3.78% from 2021 to 2025.
According to the data of Beijing Yanjing Bizhi Information Consulting, the global market demand for lysine in 2020 was about 3.25 million tons, accounting for 40.63% of the global market in the same period, and the market demand for threonine was about 800,000 tons, accounting for 10.00%. In 2021, the global market demand for lysine was about 3.25 million tons, accounting for 41.18%, and the market demand for threonine was about 920,000 tons, accounting for 10.67%.
In terms of the scale of the domestic market, with the continuous acceleration of the development process of domestic amino acids, the scale of the mainland amino acid market is also gradually increasing, and it has become a major producer and consumer of amino acids in the world. According to the data of Beijing Yanjing Bizhi Information Consulting, in 2020, the size of China's amino acid market was about 9.2 billion US dollars, a year-on-year increase of 16.16%, and in 2021, the size of China's amino acid market reached 10.8 billion US dollars, a year-on-year increase of 16.30%, and it is expected that the size of China's amino acid market will reach more than 15 billion US dollars in 2025.
In terms of output in the domestic market, with the application of amino acids in human nutrition additives, flavorings and various feed additives, the output of the mainland market is also gradually increasing. According to the data of Beijing Yanjing Bizhi Information Consulting, the output of China's amino acid market reached 2.05 million tons in 2020, a year-on-year increase of 12.64%, and the output of China's amino acid market reached 2.21 million tons in 2021, a year-on-year increase of 7.80%, and it is expected that the domestic output of amino acids will reach more than 2.5 million tons in 2023.
In recent years, due to factors such as Sino-US trade frictions, soybean meal prices have shown an upward trend. According to Baichuan Yingfu data, the average price of domestic soybean meal in 2018 was 3174.48 yuan/ton, and as of the end of December 2023, the price has reached 4359.93 yuan/ton, an increase of 37.34%; In contrast, the general price of miscellaneous meal is generally lower than that of soybean meal. At the end of December 2023, the unit price of crude protein of soybean meal was 9.86 yuan/kg, while the unit price of peanut meal, rapeseed meal and cotton meal was 9.44 yuan/ton, 8.83 yuan/ton and 8.40 yuan/ton, respectively. The overall potential of corn yield is limited, so promoting the reduction of the use of feed grains, especially the reduction of soybean meal, is an objective need to reduce the risk of national food security and ensure the steady development of the aquaculture industry.
The livestock breeding industry shows a large-scale development trend, which is also conducive to the demand for amino acids. In June 2023, the Ministry of Agriculture and Rural Affairs, together with the National Development Commission, the Ministry of Finance and the Ministry of Natural Resources, issued the National Plan for the Construction of Modern Facility Agriculture (2023-2030), which pointed out that "by 2030, the large-scale rate of animal husbandry will reach 83%", which is conducive to the growth of demand for amino acids in animal nutrition. Due to the lack of comprehensive understanding of feed additives in traditional free-range farming, and large-scale farms have professional breeding methods and experience, the level of awareness of feed additives is relatively high, so the acceptance of animal amino acids will be higher, so the large-scale development of the breeding industry is expected to increase the demand for animal nutrition amino acids.
The development of the global lysine industry is characterized by cyclical fluctuations and high supply concentration. From the perspective of the development history of lysine, the lysine industry has experienced two rounds of expansion and contraction from 2010 to 2015 and from 2016 to 2020.
(1) The first stage (2010-2015): From 2010 to 2013, the lysine industry ushered in a round of expansion, with a CR3 of about 56% in 2013, and from 2014 to 2015, the industry faced industry consolidation and liquidation, and the production capacity decreased from about 3.68 million tons in 2014 to about 3.2 million tons in 2015, and the number of major production enterprises decreased from 21 to 13, and CR3 decreased to 51%. (2) The second stage (2016-2020): From 2016 to 2018, with a new round of capacity expansion + new manufacturers entering the market, the industry concentration continued to decline, and at the end of 2018, the number of major global lysine production enterprises increased to 17, and the global production capacity reached about 3.89 million tons, and CR3 was further reduced to 48%. From 2019 to 2020, the industry once again entered a period of consolidation, and at the end of 2020, the number of major lysine producers in the world remained at 17, and the concentration of CR3 production capacity increased to about 50%. By the end of 2021, the global lysine production capacity had decreased to 3.86 million tons, the number of major producers had increased to 19, and the CR3 had decreased to 49%.
The industry planning and expansion are limited, and the competitive advantage of the leading enterprises represented by the company has been steadily improved. From 2021 to the present, with the gradual elimination of backward production capacity, the further consolidation of leading advantages, and the long-term support brought by the reduction and substitution of downstream soybean meal, the pattern of the lysine industry will gradually improve, and the industry pattern will gradually stabilize. In the short term, in the future, in addition to the Fufeng Group's plan to build a factory in the United States in 2025 to expand production, there is no further large-scale expansion plan for global lysine, and the competitive advantage of leading enterprises dominated by plum blossoms will be further highlighted. In 2021, Meihua Biotech ranked first in the global industry with a million-ton lysine production capacity, with a global production capacity market share of 19%.
Since 2010, the domestic threonine production capacity has achieved rapid expansion, from 2013 to 2015, with the elimination of backward production capacity, the market share of the world's leading threonine production enterprises has been gradually established, at the end of 2015, the CR3 production capacity concentration rate is about 60%, since 2016, the world's major threonine production enterprises have expanded one after another, and the industry's leading production capacity concentration trend is significant; in 2020, there are 9 major threonine production companies in the world, and the CR3 production capacity concentration has increased to 84%;2021 The number of global threonine manufacturers will be reduced to 8, the global threonine production capacity will be 1.08 million tons, and the CR3 production capacity concentration will be reduced to 80%.
Changes in the market share of the production capacity of major threonine manufacturers in the world from 2010 to 2021
Similar to lysine, threonine will expand production in the future, and the business environment of major manufacturers dominated by plum blossoms is expected to improve. From 2021 to the present, the number of global threonine industry manufacturers has remained stable, and in the short term, except for Fufeng's plan to build a factory in the United States in 2025 and Xijie's plan to expand production in Brazil in 2025, the world's major threonine manufacturers have no further expansion plans for the time being, which is good for the development of leading enterprises dominated by Meihua. In 2021, Meihua Biotech ranked first in the global industry with a production capacity of 300,000 tons of threonine, and the global production capacity market share reached 31%. In 2023, with the commissioning of the Tongliao threonine project, the company's threonine production capacity advantage will be further improved.
Domestic Lysine Industry Concentration-Capacity (as of the end of November 2023)
Domestic Threonine Industry Concentration - Capacity Caliber (as of the end of November 2023)
Meihua Biotechnology: a leading enterprise of amino acids, leading in production and sales in the world.
The predecessor of the company is Hebei Meihua Monosodium Glutamate Group Co., Ltd., which was formally established in 2002 and started with monosodium glutamate;
In 2006, the western area of the company's Tongliao base was fully put into operation, and the company became one of the world's largest monosodium glutamate enterprises, which laid a certain scale advantage for the company;
In 2008, the company's first amino acid glutamine was put into production, and the first phase of the Tongliao threonine project was successfully put into production, which marked the company's official entry into the field of animal nutrition amino acids;
In the same year, the company introduced CDH Investment and New Horizon Capital to invest 230 million yuan, providing sufficient financial guarantee for the comprehensive entry into the amino acid field.
At the end of 2010, the company successfully landed in the capital market, and Tongliaodong District was also fully completed and put into operation;
In 2013, the company's Xinjiang base was officially put into operation;
In 2017, the company's Jilin Baicheng subsidiary was established to seek a new force point, and in 2018, the first phase of 400,000 tons of lysine was put into production, the second phase of 250,000 tons of monosodium glutamate and the third phase of 300,000 tons of lysine, and the xanthan gum project was completed and put into operation in 2020, 2021 and 2023 respectively.
The company's main amino acid products cover many fields such as feed, food, and medicine. After more than 20 years of development, the company has become a full-chain synthetic biology company mainly engaged in amino acid products, and its production and marketing capabilities are in the leading position in the industry. Specifically, the company's main products include:
(1) Animal nutrition amino acid products: lysine, threonine, tryptophan, feed grade valine, monosodium glutamate residue, starch by-products feed fiber, corn germ, bacterial protein, etc.;
(2) Food taste trait optimization products: glutamic acid, sodium glutamate, disodium nucleotide, disodium inosinate, food-grade xanthan gum, trehalose, natamycin, etc.;
(3) Human medical amino acids: glutamine, proline, leucine, isoleucine, pharmaceutical-grade valine, inosine, guanosine, adenosine, pullulan polysaccharide, vitamin B2, etc.;
(4) Other products: petroleum-grade xanthan gum, bio-organic fertilizer, etc.
Animal nutrition amino acid products and food taste trait optimization products are the company's main products.
From 2018 to 2022, animal nutrition amino acids and food taste trait optimization products accounted for more than 80% of the total products, which were the company's main products, and the company's two major products in 2022 were 53.73% and 36.40% respectively;
In terms of product gross profit margin, the gross profit margin of the company's animal nutrition amino acid products increased year by year, achieving a gross profit margin of 23.20% in 2022, while the gross profit margin of food taste trait optimization products remained relatively stable, achieving a gross profit of 21.68% in 2022.
In recent years, the company's revenue and net profit attributable to the parent company have increased year by year.
According to the company's announcement, from 2018 to 2022, the company's revenue increased from 12.648 billion yuan to 27.937 billion yuan, with a CAGR of 21.91%, and the net profit attributable to the parent company increased from 1.002 billion yuan to 4.406 billion yuan, with a CAGR of 44.81%.
According to the latest three quarterly report announcement data, from Q1 to 3 in 2023, the company achieved revenue of 20.526 billion yuan, a year-on-year decrease of 1.42%, and a net profit attributable to the parent company of 2.161 billion yuan, a year-on-year decrease of 37.26%, mainly due to the price adjustment of corn raw materials and main products.
The company is a leading amino acid enterprise in China, mainly engaged in amino acid products, covering many fields such as feed, food, medicine and so on. As a global leading amino acid enterprise, it has outstanding scale and cost advantages.
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