China Post Securities: Expect further price increases for vitamins, with significant producers directly benefiting from the price rise.

China Post Securities released a research report stating that the vitamin industry has strong price sustainability and price elasticity due to its characteristics of rigid demand, low cost proportion, and high supply concentration, which currently are at historic low levels. For relevant listed companies, their profit increment depends on the extent of the product price increase and the company's own production capacity. Leading companies with large production capacity of relevant vitamin varieties will directly benefit from this, and it is recommended to pay attention to related vitamin production companies. China Post Securities' main views are as follows: The vitamin industry has started a new round of price increase cycle, with prices of multiple core varieties significantly increasing from historical lows. As of March 20, 2026, the price of VE has increased from 55.5 yuan/kg to 85.0 yuan/kg, an increase of 53.15%; VA has increased from 63.0 yuan/kg to 95.0 yuan/kg, an increase of 50.79%; VB3 and calcium pantothenate also increased by 40.58% and 13.50% respectively. This round of price increase of multiple varieties started at historical lows, and with upstream raw materials rising due to geopolitical factors, and with supply shrinkage and low-price support characteristics, further price increases can be expected. The downstream demand for vitamins is rigid and extremely insensitive to prices, which is the core basis for sustaining price increases. In terms of application structure, feed is the most core demand for vitamins, with most varieties being considered key and irreplaceable feed additives. Vitamins account for a very low proportion of the end feed cost, with the cost of vitamins in laying hens and fattening pig feed accounting for only 0.51% and 0.15% respectively. Therefore, the sensitivity of downstream breeding industry to vitamin price fluctuations is low, providing higher elasticity and space for vitamin price increases. Core vitamin varieties have formed a high concentration supply structure dominated by a few companies, and leading companies have strong pricing power and the ability to support prices. Whether it is large varieties such as VA, VE, calcium pantothenate, or small varieties such as VB1, VB6, VD3, production capacity is concentrated in the hands of a few companies. For example, the top companies in calcium pantothenate have a production capacity share of over 70%, and the top 3 companies in VA industry have a production capacity share of over 50% (actual operating production capacity share is even higher). This high concentration structure enables the supply side to push for price increases by actively shrinking supply. A review of prices shows that vitamin price increases have been driven by supply constraints, and in a highly concentrated structure, any supply disturbance will be amplified, leading to significant price increases. A review of prices over the past 20 years shows that prices of vitamin varieties such as VE, VA, and calcium pantothenate have fluctuated greatly and have had short cycles, with long-term low and long-term increase rarely occurring. In past price increases, production shutdowns and reductions (such as factory accidents, environmental inspections) and shortages of core raw materials (such as citral, isobutyl aldehyde) have been the main drivers of price increases. And due to the rigid demand downstream, product price increases do not suppress demand, making each round of increase significantly price elastic. Risk warning: Risks of lower-than-expected price increases in vitamin raw materials; Risks of intensified market competition; Risks of geopolitical uncertainties; Risks of policy uncertainties.