Founder Securities released a research report stating that the nutritional health supplement market will maintain high prosperity in the long term, with a trillion-dollar super-scale market potentially nurturing mega-cap companies. Currently, the industry chain is undergoing transformation, with structural high-growth opportunities continuously emerging. Overall industry performance is gradually stabilizing and beginning to break upward, supported by improving fundamentals that are driving the sector into a valuation recovery phase, making its allocation value increasingly evident.
From a horizontal comparison perspective, considering long-term growth potential alongside mid-to-short-term fundamentals and valuation levels, the report recommends companies such as Jiyuan Group (603262.SH). Founder Securities' key views are as follows:
**Global Trillion-Dollar Nutritional Health Supplement Market: Supply-Demand Transformation Breeding High-Growth Structural Opportunities** Driven by economic development, demographic shifts, and evolving health awareness, the global nutritional health supplement market is expected to maintain a compound annual growth rate (CAGR) of over 5% in the long term, reaching $226.8 billion by 2027. The U.S., China, and Europe are the top three regional markets, accounting for nearly 70% of the total. While the U.S. and European markets are mature with established regulatory systems, supply chains, and consumer bases, China's market is steadily improving. Across global markets, changes in consumer demographics, demand, and sales channels are driving transformations on both the supply and demand sides, fostering high-growth structural opportunities such as direct-to-consumer (DTC) brands and e-commerce channels.
**Mature Specialization System in Nutritional Health Supplement Industry: Synchronized Growth and Transformation Across Segments** With over a century of development, the nutritional health supplement industry has formed a specialized division of labor: upstream raw material suppliers, midstream contract manufacturers and brand owners, and downstream distributors.
- **Upstream**: The nutritional raw material market benefits from strong mid-to-downstream demand, projected to expand at a CAGR exceeding 6% over the next six years, with a trend toward consolidation. Comprehensive raw material suppliers lead in scale, while specialized suppliers excel in profitability. - **Midstream**: Brand owners enjoy gross margins 20–30 percentage points higher than contract manufacturers, but the market remains highly fragmented, with long-tail brands maintaining a ~40% market share. The global contract manufacturing market, valued at ~$15 billion in China and the U.S., continues to grow at a ~4% CAGR, with leading manufacturers gaining more share due to balanced regional distribution, customer structure, and product mix. - **Downstream**: Online channels have become the largest sales channel globally, with penetration rates nearing 60% in China. The online nutritional health supplement market sustains a ~20% CAGR, with emerging segments like content-driven e-commerce and cross-border imports showing even stronger growth momentum.
**Industry Fundamentals Turning Upward, Allocation Value of Sector and Leading Companies Increasing** Industry revenue, profits, and operational conditions have bottomed out and are gradually recovering. Over the next three years, overall sector performance is expected to break upward at a CAGR exceeding 20%, entering a new phase. Meanwhile, the industry maintains a relatively sound capital structure with low financial risks, while improving fundamentals support gradual valuation recovery.
In summary, the nutritional health supplement industry boasts strong long-term growth potential, coupled with a likely robust mid-to-short-term fundamental recovery, making sector allocation increasingly attractive. Additionally, internal differentiation within the sector highlights the relative advantages of certain companies, warranting closer attention.
**Risk Factors**: Regulatory policy uncertainties, brand damage from product quality issues or false advertising, failure to keep pace with ingredient or formulation innovations, and intensified competition leading to rising costs and margin compression.
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