Plum Blossom Group profits fall 30% MSG Excess capacity

MSG Enterprise recently released 2013 years of performance again shows that the MSG industry is in the downlink channel. The 2013 annual report of the Plum Blossom Group (600873.SH), released in Friday, shows that the company realized its operating income of 7.78 billion yuan in 2013, the micro-increase of 4.16%, and the net profit of the shareholders of the listed company 404 million Yuan, which fell 33.58% year-on-year. Among them, MSG and glutamic acid business realized operating income 3.64 billion yuan, fell 8.02% year-on-year, and the gross margin was reduced by 3.39% compared with a year earlier. CITIC Securities Agriculture and Fisheries Industry chief analyst Shiliang told the first financial daily reporter, "Export volume in recent years is also declining, because the price is expensive." MSG raw material is corn, our country corn price is higher than the international price 50%~60%, plus the land cost is higher than abroad, the overall cost is higher, the price is therefore high, lost the export advantage. "Plum Blossom Group's amino acid business suffered setbacks in 2013. During the reporting period, the overall culture situation is depressed, the amino acid market demand drops, most amino acid products in the premise of high cost, product prices into a historic low. Shiliang told reporters, "Plum Blossom team is still relatively excellent, but the industry cycle is not good." Their team tried their best to make the business better. The first few years ago, the optimization of the industrial chain, the corn starch link to do more sophisticated, and then develop the size of the amino acids, and now to the biomedical field development. But the msg industry is a heavy asset, unlike the light assets industry, said that change can be changed. Heavy asset transformation is not easy, it takes time to digest. "In order to expand the business, Plum Blossom Group in January this year and the Tibetan Yi Yuan Industrial Co., Ltd. reached a framework agreement, to finance the acquisition of Yi Yuan Industrial Holdings Dalian Sino-letter Bio-Pharmaceutical Co., Ltd. 100% stake. The acquisition became the first step in the company's substantive foray into the biopharmaceutical sector.