1、ab1 August 2025Global ResearchPowered byUBS Evidence LabYESChina Chemical SectorAnimal nutrition:a US$29bn market,what to buy in China?Animal nutrition:potential market size of US$29bn;China leads market share Nutrients are added to animal feed to improve animal health/performances.Main products inc

2、lude vitamins,amino acids,etc.With S&P Globals data,we estimate global consumption of feed additives might reach 16.7mt(US$29bn by value)in 2025,expanding at a 2.4%CAGR over 2023-28E.China accounts for over 70%/80%of global amino acid/vitamin production,with growing influence via capacity additions/

3、expansion in high-end products.Chinese companies have significantly higher ROEs(16.4%average,versus overseas peers 8.1%)with slightly higher P/BV(1.5x average,versus overseas peers 1.2x)in 2026E.Amino acid growth outpaces industry,eyes on Chinas incremental growthAmino acids dominate the animal nutr

4、ition market by value(US$12bn),potentially generating a 4.4%CAGR over 2023-28E.Companies are seeking new areas of growth through more high-end products and biotechnologies,shifting towards natural ingredients,and adopting sustainable practices.UBS Evidence Lab data(Access Dataset)suggests growth in

5、animal feeds end-markets in Asia outpaced other regions in 2013-24.We are more positive on incremental amino acid demand in China,due to governments aim to reduce the proportion of soybean meal in feed.We estimate this will bring 40-60%incremental demand for valine,and 6-15%for lysine and threonine

6、in China(implying 6-8%,1-3%additional CAGRs in 2024-30E,respectively).Product outlook:bullish on threonine and MSGIn terms of product outlook in 2025E-26E(see Figure 21),we are most positive on threonine and MSG prices.Threonine and MSG have limited supply additions in 2025-26E and high market conce