Capitalist Roader Fund: BUY-Hubei Guangji Pharmaceutical (000952, Shenzhen)

By Tom Pellman July 25th, 2008 Call us impatient, but we’ve got a new riboflavin-of-the-month. And no, it’s not that Riboflavin. Yesterday we bought 100 shares of Hubei Guangji Pharmaceutical at 17.00, our first foray into the Shenzhen market. Guangji is the world’s largest riboflavin supplier by production capacity, with a 90% market share in China, itself one-third of the global market. Also known as vitamin B2, riboflavin is mainly used in animal feed and as a food additive. For the uninitiated, 2007 was something of a banner year for riboflavin, with prices sky-rocketing and Guangji riding the tide to post a 14-fold sales growth for the year. German chemical-making giant BASF must have noticed and summarily crashed the party by resuming regular riboflavin production in the third quarter of 2007. Prices have plummeted... [read full story]