Company Overview - 阜丰集团 is a leading fermentation enterprise focusing on shareholder returns, with major products including food additives (monosodium glutamate), animal nutrition (lysine, threonine, corn refined products), high-end amino acids (tryptophan, valine, leucine, isoleucine, glutamine, hyaluronic acid), and colloids (xanthan gum) [1] - The company has a production capacity of 1.33 million tons/year for monosodium glutamate by the end of 2023, projected to reach 1.65 million tons/year by the end of 2024, and potentially 1.73 million tons/year post-expansion, making it the largest globally [1] - Lysine production capacity is 380,000 tons/year (4th globally), threonine capacity is 263,000 tons/year (2nd globally), and xanthan gum capacity is 80,000 tons/year (1st globally) [1] - The company plans to establish two overseas production bases by 2024 [1] - The dividend payout ratio has been stable at 33%-35% from 2018 to 2021, with a projected ratio of 35% + 5% special dividend from 2022 to 2024, resulting in a TTM dividend yield of approximately 5.7% as of June 17, 2025 [1] Industry Insights - The monosodium glutamate industry is characterized by high concentration, with global industrial demand exceeding 3 million tons and stable growth trends [2] - China is the largest consumer of monosodium glutamate, accounting for about 70% of global consumption, with a projected apparent consumption of 2.24 million tons in 2024 and exports of 962,000 tons [2] - The industry is expected to recover from a downturn as new capacities are gradually absorbed, with the CR3 concentration reaching 85% in 2024 [2] Amino Acids Market - The demand for lysine and threonine is anticipated to grow, driven by increased feed production and amino acid usage in Asia, Africa, and Latin America [2] - The export growth rate of lysine and threonine from China to these regions is outpacing local feed production growth, indicating a shift in the amino acid industry towards domestic production [2] - The supply from overseas companies in the lysine and threonine markets is declining, with the CR3 for threonine reaching 83% and no short-term capacity expansion expected [2] Xanthan Gum Market - Xanthan gum prices have been volatile, influenced by geopolitical factors and oil price fluctuations, but are expected to stabilize in the coming years [2] Investment Recommendation - The company is positioned as a leader in the global monosodium glutamate industry, with anticipated demand growth and a recovery in industry conditions [2] - The company is also a leader in feed amino acids, benefiting from an improving industry landscape and active overseas expansion [2] - Projected net profits for 2025-2027 are estimated at 2.51 billion, 2.69 billion, and 2.96 billion respectively, leading to a "buy" rating [2]

Investment Rating - The report assigns a "Buy" rating for the company for the first time [3][9]. Core Views - The company is a leading player in the global monosodium glutamate (MSG) industry, with production capacity expected to reach 173,000 tons per year by the end of 2024, making it the largest globally [6][15]. - The demand for MSG is anticipated to grow, with the industry expected to hit a bottom and recover as new capacities are absorbed [3][9]. - The company is also a leader in feed amino acids, benefiting from an improving industry landscape and increasing demand, alongside its proactive overseas expansion efforts [3][9]. Company Overview - The company focuses on fermentation products, with a diverse product line including MSG, lysine, threonine, and xanthan gum [6][15]. - By the end of 2023, the company's MSG production capacity was 1.33 million tons per year, projected to increase to 1.65 million tons by the end of 2024 [6][15]. - The company has maintained a dividend payout ratio of 33%-35% from 2018 to 2021, with a forecasted payout ratio of 35% plus a special dividend from 2022 to 2024 [6][25]. Financial Summary - The company has shown steady growth, with a compound annual growth rate (CAGR) of 11.0% in revenue and 6.4% in net profit from 2010 to 2024 [28]. - In 2024, the company is expected to generate revenue of 27.76 billion yuan, a year-on-year decrease of 1.3%, and a net profit of 2.31 billion yuan, down 26.5% year-on-year [28][30]. - The company's gross profit margin for 2024 is projected to be 18.2%, with a net profit margin of 8.3% [34]. Industry Insights - The MSG industry is characterized by high concentration, with China accounting for approximately 70% of global consumption and 80.3% of global production capacity by 2024 [7][51]. - The demand for lysine and threonine is expected to grow, particularly in emerging markets, driven by increased feed production and the adoption of low-protein diets [59][63]. - The company is well-positioned to benefit from the ongoing shift in the amino acid industry towards domestic production and the rising demand in developing regions [63][64].

Group 1 - A total of 130 stocks reached a 52-week high as of June 11, with notable performers including Derin International (01126), Republic HC (08357), and Linkong Biotechnology Group (00690) achieving high rates of 44.71%, 37.50%, and 35.79% respectively [1] - The closing prices and highest prices for the top three stocks are as follows: Derin International at 9.000 and 9.580, Republic HC at 0.190 and 0.220, and Linkong Biotechnology Group at 0.126 and 0.129 [1] - Other significant stocks that reached new highs include China San San Media (08087) with a high rate of 31.82% and Dekang Agriculture (02419) with a high rate of 15.32% [1] Group 2 - The report also lists stocks that reached new lows, with the lowest performer being Caixin Media Equity (02986) at a low rate of -28.57% [4] - Other notable stocks that reached new lows include New Qian An (02573) at -19.64% and METALIGHT (02605) at -14.71% [4] - The closing prices for the lowest performing stocks include Caixin Media Equity at 0.014, New Qian An at 17.760, and METALIGHT at 6.370 [4]

Investment Rating - Industry investment rating: Overweight [1] Core Viewpoints - The core investment logic highlights that lysine and threonine, as major feed amino acids, are expected to benefit from the rise of "low-protein diets" and "reduced soybean meal," which are gaining attention in the aquaculture industry. The downstream demand remains stable, with high reliance on overseas markets, while supply and raw material impacts are significant. The continuous decline in corn and soybean meal prices over the past two years has closely correlated with amino acid prices, and if agricultural products enter an upward cycle, it will support lysine and threonine prices. Additionally, domestic lysine production is expanding, while threonine expansion is slowing, creating a favorable market structure. The increasing competition domestically and deteriorating export environment are raising industry entry barriers, prompting companies to seek opportunities abroad. The future of the industry is expected to see a "scale + internationalization" collaborative layout, potentially forming a second growth curve for amino acid performance [4][5][8]. Summary by Sections 1. Importance of Feed Amino Acids and Industry Expansion - Amino acids are essential nutrients for biological life, with significant applications in the feed industry. The global feed amino acid market is projected to grow at a CAGR of 5.8% from 2024 to 2032, driven by policies promoting reduced soybean meal usage [4][44]. - The global supply of the four major feed amino acids (lysine, methionine, threonine, and tryptophan) is expected to reach 6.986 million tons in 2024, a year-on-year increase of 13.5%, with lysine and threonine in China growing by 10.3% and 15.4%, respectively [4][44]. 2. Market Structure and Competitive Landscape - The lysine and threonine markets are highly concentrated, with domestic production accounting for approximately 76.5% and 95% of global capacity, respectively. The CR4 for lysine and threonine in China is 60.31% and 77.48%, indicating a strong competitive advantage among leading companies [4][5]. - The increasing concentration of production capacity and the strategic push for international expansion by leading companies are expected to enhance market dynamics and create new growth opportunities [4][5]. 3. Price Trends and Profitability Outlook - The prices of feed amino acids are anticipated to rise in 2024, with the global market value for feed amino acids reaching $15.21 billion, a year-on-year increase of 24.9%. The recovery of corn prices is expected to support lysine and threonine prices, while the relationship between soybean meal and feed amino acids will drive demand [5][7]. - As of May 2025, 70% of lysine prices have rebounded, and threonine prices have stabilized, indicating a positive trend for profitability in the industry [5][7]. 4. Investment Recommendations - The report suggests focusing on companies such as Meihua Biological, Fufeng Group, and Xinghuo Technology, which are well-positioned to capitalize on the growth in lysine and threonine markets due to their strong production capabilities and strategic international expansion plans [8].

Key Points - As of May 20, 91 stocks reached their 52-week highs, with the top three being Sanofi Pharmaceutical (01530), TEAMWAY INTL GP (01239), and China Carbon Neutral (01372) [1] - Sanofi Pharmaceutical achieved a closing price of 19.180, with a peak price of 22.000, marking a high rate of 49.25% [1] - TEAMWAY INTL GP closed at 0.229, reaching a high of 0.248, reflecting a high rate of 30.53% [1] - China Carbon Neutral closed at 1.600, with a peak of 1.640, resulting in a high rate of 17.14% [1] - Other notable stocks include Songjing Technology (01079) with a high rate of 16.47% and H&H International Holdings (01112) at 16.28% [1] - The report also lists several stocks with lower high rates, indicating a broader market trend [1][2][3]

资本市场的确重燃对消费品牌的偏爱。 统计显示，量贩零食第一股万辰集团的股价上涨超6倍，卫龙、中宠股份、乖宝宠物、泡泡玛特、老铺 黄金、蜜雪冰城的股价也如同坐上过山车。去年，泡泡玛特的股价与今年相比整整涨了6倍。 老庙黄金更是"离谱"，不到一年时间涨了20倍。从2015年概念出圈，到2019年开始风生水起，随后一地 鸡毛的新消费赛道，或许要在新的一年重生了。 新消费在"假性"复活？ 先看过去一年，2024年新消费行业一半海水一半火焰。 从总体表现来看，市场大有复活前兆。统计显示，2024年，多家登陆港股的新消费企业股价表现不俗， Wind数据显示，2024年-2025年一季度末，港交所IPO共86宗，消费股占了22宗，占比达22.6%。 文丨消费最前线 罗弋 新消费似乎有要复苏的迹象，这不是凭空猜测。 从去年下半年开始，消费企业扎堆上市。2025年，蜜雪冰城、古茗、沪上阿姨、霸王茶姬陆续在港股与 美股上市，当前，还有一大批消费品牌如老乡鸡、遇见小面、绿茶、鸣鸣很忙、八马茶业、卡游……等 待上市。 各大企业突飞猛进的股价仿佛让人重新回到2020年之前。但当前的消费行业显然没有从前好混，曾经消 费势头如日中天，追求 ...

Overview - The health supplement raw material manufacturing industry in China is experiencing rapid growth, with a projected market size of 1300.0 billion yuan in 2024, reflecting a year-on-year increase of 9.93% [1][11] - The composition of the market includes approximately 30% vitamins and minerals, 25% plant extracts, 20% amino acids and proteins, and 15% probiotics [1][11] - The global demand for high-quality health supplement raw materials is increasing, presenting new opportunities for the industry [1][11] Market Policies - The Chinese government has implemented various policies to support the development of the health supplement industry, including the "Quality Strong Country Construction Outline" and measures to restore and expand consumption [4][6] - Policies aim to enhance food safety standards, promote technological upgrades, and encourage the integration of the food industry with health and wellness sectors [4][6] Industry Chain - The upstream of the health supplement raw material manufacturing industry includes sectors such as traditional Chinese medicine cultivation, plant farming, deep-sea fish farming, and basic chemical raw materials [7] - The midstream involves the manufacturing of health supplement raw materials, while the downstream focuses on the health supplement market, where raw materials are formulated into various product types [7] Market Demand - The health supplement market in China is projected to reach 4142.0 billion yuan in 2024, with a year-on-year growth of 2.7%, driven by increasing consumer health awareness and an aging population [9][11] - There is a growing demand for health supplements targeting specific health concerns, such as memory improvement and immune enhancement for the elderly [9][11] Competitive Landscape - The health supplement raw material industry in China features a diverse range of companies, with some focusing on multiple product lines while others specialize in specific segments [12][14] - Notable companies include Northeast Pharmaceutical, Andy Su, and Meihua Biotechnology, which are recognized for their expertise in vitamins, amino acids, and plant extracts [12][14] Development Trends - Future trends indicate a shift towards personalized health supplement raw materials that cater to individual health needs, emphasizing safety, naturalness, and organic sourcing [19] - Chinese companies are expected to leverage cost advantages and technological advancements to expand into international markets, enhancing their competitiveness globally [19]

Core Insights - As of May 7, 51 stocks reached their 52-week highs, with Zhongjia Guoxin (00899), Shandong Molong (00568), and Yunfeng Financial (00376) leading in high rates of 75.00%, 43.81%, and 38.89% respectively [1][2]. 52-Week Highs Summary - Zhongjia Guoxin (00899) closed at 0.109 with a peak price of 0.350, achieving a high rate of 75.00% [2]. - Shandong Molong (00568) closed at 4.700 with a peak price of 7.550, achieving a high rate of 43.81% [2]. - Yunfeng Financial (00376) closed at 2.010 with a peak price of 2.500, achieving a high rate of 38.89% [2]. - Other notable stocks include Wangchen Technology Holdings (02458) with a high rate of 28.78% and Nannan Resources (01229) with a high rate of 20.75% [2]. 52-Week Lows Summary - Zhongsheng United (03332) reached a low of 0.420 with a low price of 0.350, marking a low rate of -10.26% [4]. - China Tianbao Group (01427) closed at 0.178 with a low price of 0.092, achieving a low rate of -8.00% [4]. - XI Ernan Strategy (07399) reached a low of 26.940 with a low price of 26.160, marking a low rate of -6.24% [4].

Company Growth and Strategy - Fufeng has expanded its product lines to include xanthan gum, animal nutrition, and high-end amino acids, achieving top global rankings in these categories[7]. - The company has established a low-cost expansion development strategy, which has been crucial for its rapid growth and diversification[7]. - Fufeng's journey from a county business to a sizable group has spanned 25 years, reflecting significant changes and growth in the company[6]. - The MSG product line was the starting point for Fufeng, which was acquired from a bankrupt factory, highlighting the company's opportunistic approach[7]. - The company aims to become a renowned corn biochemical enterprise, driven by its successful product diversification[7]. - Fufeng's financial performance and market position have been strengthened through strategic expansions and product development[6]. - The establishment of a strong management team has been pivotal in navigating the company's growth trajectory[6]. - Fufeng's vision includes becoming a leader in biochemical fermentation products, leveraging its technical expertise[7]. - The company aims to establish itself as a multinational enterprise, with a vision of becoming "a renowned corn biochemical enterprise" in the near future[14]. Financial Performance - Fufeng's turnover for 2023 was RMB 28,007 million, showing a significant increase from RMB 27,475 million in 2022, reflecting a growth of approximately 1.9%[16]. - Profit attributable to shareholders for 2023 reached RMB 3,861 million, up from RMB 3,144 million in 2022, indicating a growth of about 22.8%[18]. - The Group's revenue slightly decreased by 0.9% to approximately RMB27,757.3 million in 2024, compared to 2023, primarily due to a decrease in the revenue of the Colloid segment[37]. - The overall gross profit decreased by 19.1% to approximately RMB5,056.8 million in 2024, mainly due to reduced gross profit contributions from the Colloid and Food Additive segments[37]. - Profit attributable to the Shareholders decreased by 26.5% to approximately RMB2,312.4 million in 2024, compared to 2023[38]. Market Trends and Projections - Fufeng's corn production in China is projected to be approximately 295.0 million tonnes in 2024, representing a 2.1% increase compared to 2023[23]. - China's total corn imports are expected to decrease sharply by about 49.2% year-on-year to only 13.64 million tonnes in 2024, indicating a strong domestic supply[23]. - The average corn price is projected to decrease from approximately RMB 2,723 per tonne in 2023 to RMB 2,250 per tonne in 2024, a decline of 17.4%[24]. - The International Monetary Fund projected global economic growth of 3.3% for 2025, while China's economic growth is estimated at about 5%[118]. Production and Capacity - The annual designed production capacity for MSG increased by 24.1% to 1,650,000 tonnes in 2024, while threonine and lysine capacities increased by 8.2% and 35.7% respectively[77]. - The capacity utilization rate for MSG, threonine, and lysine reached full capacity during the year, with 80% of the new 400,000 tonnes MSG capacity expected to be operational in the second half of 2024[78]. Sales and Revenue Breakdown - Revenue from the food additives segment increased by 6.4% to approximately RMB14,365.3 million in 2024, mainly due to increased sales volume of MSG and starch sweeteners[46]. - MSG sales volume increased by 26.8% to approximately 1,637,967 tonnes, while the average selling price (ASP) decreased by 16.1% to approximately RMB6,714 per tonne, resulting in a slight revenue increase of 6.4% to RMB10,996.6 million[50]. - Revenue from threonine increased by 18.7% to approximately RMB2,517.3 million, with an ASP of RMB9,632 per tonne, up 4.0%[52]. - Revenue from the high-end amino acid segment increased by 12.4% to approximately RMB2,217.4 million, mainly due to increased sales volume[57]. - Revenue from the colloid segment decreased by 35.8% to approximately RMB1,816.5 million, with a gross profit margin of 41.5%, down 17.6 percentage points[59]. Challenges and Adaptations - Fufeng has witnessed many ups and downs over its 25-year history, adapting to market changes and challenges[6]. - The company has faced significant challenges in its internationalization process, particularly in establishing a production base in the United States due to geopolitical tensions[10]. - Fufeng's management emphasizes the importance of overcoming societal obstacles to achieve sustainable growth for the enterprise[10]. - The Group's gross profit margin decreased to 18.2% in 2024 from 22.3% in 2023, reflecting the challenges faced in the Colloid and Food Additive segments[43]. Corporate Governance and Compliance - The Board is collectively responsible for promoting the success and interest of the Group, ensuring that no material uncertainties were found regarding the Company's ability to continue as a going concern during the Year[171]. - The roles of the Chairman and the Chief Executive Officer are clearly separated, with Mr. Li Xuechun as Chairman overseeing the Board and Mr. Li Deheng and Mr. Li Guangyu as Co-Chief Executive Officers managing daily operations[172]. - Independent non-executive Directors represent over one-third of the Board, ensuring a proper balance of power and maintaining effective control over the Group and its executive management[180]. - The Company is committed to continuous professional development for all Directors, providing training on corporate governance and updates on relevant laws and regulations[190]. - The Company has received annual confirmations of independence from all Independent non-executive Directors, affirming their independence[180]. Environmental and Social Responsibility - The company received the title of "Aon's 2024 China Best ESG Employer"[155]. - Total cumulative resources invested in public welfare reached RMB 8,821,259[161]. - Greenhouse gas emission intensity was 487.01 tCO2e/million RMB revenue[155]. - Total sewage discharge was 9,904,200 tonnes, with recycled sewage volume at 34,642,500 tonnes[155]. - Emission intensity of hazardous waste was 0.02 tonne/million RMB revenue[155].

Investment Rating - The report maintains an "Outperform" rating for Fufeng Group [2][10]. Core Views - In 2024, the profit attributable to shareholders decreased by 26.5% year-on-year, with revenues of RMB 27.8 billion, a decline of 0.9% primarily due to reduced revenues from the colloid segment [6][10]. - The company continues to implement its internationalization strategy, establishing two overseas production bases and expanding sales offices in Vietnam, the United States, and the Netherlands [9][10]. - The commissioning of a new monosodium glutamate (MSG) factory led to a significant increase in sales volume, with MSG sales volume rising by 26.8% to approximately 1.64 million tons in 2024 [7][10]. - The average selling price of MSG decreased by about 16.1% to RMB 6,714 per ton, which offset the increase in sales volume, resulting in a slight revenue increase of 6.4% to RMB 10.9966 billion [7][10]. - The animal nutrition segment saw a revenue decrease of 1.8% to RMB 8.7393 billion, but the gross profit margin improved by 6.1 percentage points to 23.2% due to increased production capacity of threonine [8][10]. Financial Summary - The projected net profit attributable to the parent company for 2025-2027 is RMB 2.530 billion (-25%), RMB 2.784 billion (-25%), and RMB 3.132 billion (new) respectively [10]. - The company’s earnings per share (EPS) are expected to be RMB 1.01 in 2025, RMB 1.11 in 2026, and RMB 1.25 in 2027 [5][10]. - The target price is set at HK$7.68, based on a P/E ratio of 7 times for 2025 [2][10].