Jinan Zhuocheng Bio-Tech Co., Ltd.

API product prices continue to decline, and some products have already reached relatively bottom levels. According to Wind data, in Q1 2026, the traditional API market showed significant year-on-year pressure across different categories. However, some products also showed sequential price increases.

By category:
(1) Vitamins: prices were flat or declined QoQ, with certain YoY pressure;
(2) Antibiotics: prices increased significantly QoQ, but still faced YoY pressure;
(3) Hormones: overall prices remained stable without significant fluctuations;
(4) Sartan APIs: price declines showed marginal stabilization;
(5) Veterinary APIs: according to the WeChat official account of China Veterinary Feed Trade Center, since March, prices of doxycycline and florfenicol have risen sharply, showing a V-shaped recovery pattern.

Changes in the global political and economic environment, with significant FX impacts

From 2025 to Q1 2026, multiple global political factors have had structural impacts on the future API industry landscape:
(1) Cost pressures are accumulating. High crude oil prices, combined with geopolitical risks such as those in the Strait of Hormuz, have driven continuous increases in upstream chemical raw material prices, and costs have begun to be transmitted downstream;
(2) India has implemented minimum import price policies on key intermediates such as penicillin industrial salt, 6-APA, and amoxicillin (as a result, penicillin APIs have seen price increases in practice);
(3) This round of RMB appreciation began in April 2025. By December 2025, offshore RMB against the US dollar broke above the 7.0 level. In 2026, the appreciation accelerated further, with onshore RMB against the US dollar once reaching around 6.82, a three-year high. RMB appreciation has already had a significant impact on the Q1 2026 performance of multiple API companies.

New business, new momentum, new growth drivers, and new valuation

After experiencing intense competition and industry “involution,” profitability in traditional API businesses has continued to shrink. In addition to ongoing technical upgrades and cost reduction measures, expanding new businesses has become an inevitable path for API companies’ transformation.

In addition to finished dosage integration (vertical integration of the industrial chain), the expansion of innovative businesses requires companies to make early strategic layouts, which is more difficult and involves longer development cycles.

(1) Innovative drugs: United Laboratories’ UBT251 and UBT48128, Huahai Pharmaceutical’s HB0025, etc.;
(2) New molecular types: Aurisco Pharmaceutical’s small nucleic acid technology platform, Menovo Pharmaceutical’s oral peptide delivery system.