Core Insights - The crystallized fructose industry in China has experienced rapid growth, with the market size projected to increase from 103 million yuan in 2019 to 196 million yuan in 2024, driven by its low glycemic index and suitability for sugar-sensitive populations [1][14]. Industry Overview - Crystallized fructose is a monosaccharide, an isomer of glucose, with a sweetness level 1.2 to 1.8 times that of sucrose. It is naturally found in fruits, honey, and the juices of grains, and is characterized by low caloric value and quick metabolism in the body [3]. - The main product types in the market include crystallized fructose powder and liquid crystallized fructose, with the powder being the primary form [4]. Industry Chain - The upstream raw materials for crystallized fructose production include corn and sugarcane, with corn being a significant source through starch sugar pathways. The industry chain encompasses production, processing, and application in sectors such as food, beverages, pharmaceuticals, and health products [6]. Market Demand - The food and beverage industry is the primary application area for crystallized fructose, used in various products like carbonated drinks, fruit juices, and energy drinks. The market for the food and beverage industry in China is expected to reach 12.14 trillion yuan in 2024, reflecting a 3.61% year-on-year increase [10]. Competitive Landscape - The crystallized fructose market is competitive, with leading companies leveraging brand influence and production scale. Emerging firms are expanding their market share through technological innovation and differentiated products. Key players include Baolingbao Biological, Shandong Bailong Chuangyuan, and Anhui Hongchang Sugar Industry Technology [16][19]. Industry Trends - The precision control of particle size in crystallized fructose production is expected to improve, enhancing product diversity and market adaptability [21]. - The application of crystallized fructose is anticipated to expand beyond traditional food and beverage sectors into pharmaceuticals and health products, with potential uses in specialized foods and pet nutrition [22]. - Continuous technological advancements are necessary to improve production efficiency and product quality, addressing the industry's growing demand [23].

Core Viewpoint - The corn industry is a strategic pillar for China's food security, with significant growth in planting area, yield, and total production expected in 2024, despite short-term market adjustments due to international price fluctuations and rising costs [1][8][14]. Group 1: Industry Overview - The corn processing industry in China has developed a complete industrial chain, from primary processing to modern biobased material research, becoming a key hub for agricultural production and industrial manufacturing [1][5][14]. - Corn processing can be categorized into primary processing and deep processing, producing various products for food, feed, and industrial applications [2][3][5]. Group 2: Current Development Status - In 2024, China's corn planting area is projected to reach 44.74 million hectares, a year-on-year increase of 1.18%, with a yield of 439.4 kg/mu, contributing to a total production of 294.92 million tons, a 2.1% increase from the previous year [1][8][10]. - The total corn consumption in 2024 is expected to reach 31.78 million tons, with industrial consumption growing by 3.07% to 7.94 million tons, driven by innovations in deep processing [12][14]. Group 3: Market Trends - The corn deep processing market size is expected to adjust to 190 billion yuan in 2024, down 6.4% from its peak in 2022, but the long-term growth trend remains solid [1][14]. - The corn processing industry is transitioning towards green and low-carbon practices, focusing on high-value product development such as polylactic acid and functional sugars [24][25][26]. Group 4: Competitive Landscape - The corn deep processing industry in China has a tiered competitive structure, with leading companies like COFCO Technology and Meihua Biological occupying the top tier, focusing on high-value products [20][22]. - The market for corn starch is highly concentrated, with top companies holding over 44% market share, and there is a trend towards differentiation and expansion into biobased materials and other emerging fields [22][24].

Core Viewpoint - The company Baolingbao (002286) is currently facing challenges in the market, with its stock price at 12.55 yuan, down 2.03%, and significant trading activity noted on July 3, 2025 [1] Group 1: Company Developments - The company clarified that its DHA algal oil production does not strictly fall under the definition of marine economy as outlined in the national marine economic development plan [1] - Baolingbao's product, Alotose, has not yet been approved for sale in the domestic market, and the approval timeline for its enzyme preparation remains uncertain [1] - The company has submitted an application for the domestic approval of its Alotose enzyme preparation, but it is still pending [1] Group 2: Market Activity - On July 3, 2025, the net outflow of main funds from Baolingbao was 102 million yuan, while speculative funds saw a net inflow of 26.07 million yuan, and retail investors contributed a net inflow of 75.65 million yuan [1]

Industry Overview - The approval of D-alloheptulose as a new food ingredient aligns with the trend of innovation and upgrading in China's sugar substitute industry, indicating a potential for rapid market penetration in beverages, baking, and confectionery sectors [1][3] - The global market for D-alloheptulose is projected to reach $147.7 million by 2024, with the U.S. market accounting for 30% and an expected compound annual growth rate (CAGR) exceeding 14% from 2025 to 2034 [1] Company Developments - Baolingbao has been involved in the research and development of D-alloheptulose for nearly 10 years and plans to complete a technical transformation project in 2024 with an annual production capacity exceeding 5,000 tons [2] - Shandong Sanyuan Biotechnology has an existing annual production capacity of 10,000 tons of D-alloheptulose and is expanding with a second production line of the same capacity [2] - Jinhe Industrial has an annual production capacity of 1,000 tons of D-alloheptulose, while Shandong Bailong Chuangyuan has recently commenced production of its D-alloheptulose products [2]

Summary of Key Points from the Conference Call Industry Overview - The approval of allulose as a new food ingredient expands its application in the food sector, particularly in weight loss and diabetes-related products, and allows for food thermal processing, although production methods have specific strain and donor limitations [1][4][16]. Company Insights COFCO Technology - COFCO Technology has developed allulose production technology using corn starch and has received approval for related enzyme preparations, advancing the construction of a production line with a capacity of 10,000 tons. Expected net profits for 2025-2027 are projected at 100 million, 160 million, and 230 million yuan respectively, with a year-on-year growth rate of approximately 300% this year [1][5]. Bailingbao - Bailingbao is a leading company in functional metabolic products, with a production capacity exceeding 5,000 tons and plans to expand to 30,000 tons by 2026. The company is primarily focused on exports [1][7]. Bailing Chuangyuan - Bailing Chuangyuan is the first company in China to achieve industrial-scale production and revenue from allulose, with a projected revenue of 156 million yuan in 2024 and a gross margin of 19%. The company plans to expand capacity in Thailand, primarily for export [1][6][17]. Jinhui Industrial - Jinhui Industrial is a leader in the sugar substitute industry, with a leading global market share in sucralose and acesulfame. The company is actively developing allulose and offers blended sweetness solutions [3][13]. Jindawei - Jindawei is constructing a 30,000-ton allulose project, benefiting from the approval of allulose as a food additive. The company has also acquired the US brand RX Sugar to expand its portfolio [22]. Market Dynamics - Allulose is viewed as a potential substitute for sucrose, with a sweetness level of 70% compared to sucrose but only 1/10th the calories. It has health benefits such as vascular softening and blood sugar regulation, making it suitable for weight loss and diabetes applications [2][16]. - The global sugar substitute market is still in its early stages, with only about 10% of global food consumption utilizing sugar substitutes. The market for sugar substitutes is expected to grow significantly [9]. Competitive Landscape - Allulose's approval is a significant event for the sugar substitute industry, marking a new phase of development. Companies with technological and production capacity reserves, such as Bailing Chuangyuan, Bailingbao, and COFCO Technology, are expected to have favorable market prospects [8][16]. - The competitive advantage of allulose includes its low caloric content, low glycemic index, and ability to participate in the Maillard reaction, which enhances its application in baked goods [12][16]. Financial Projections - Bailing Chuangyuan's profit growth exceeded expectations at 52% in Q1 2025, with projected annual revenue and profit growth rates of over 35% and 43% respectively [3][19]. - COFCO Technology's stock price is worth monitoring, with a target price of 6.8 yuan, reflecting a projected year-on-year growth of approximately 300% [1][8]. Conclusion - The approval of allulose as a new food ingredient is expected to stimulate capacity release and expand market opportunities for companies with established production capabilities. The overall outlook for the sugar substitute industry remains positive, with significant growth potential in various food applications [1][8][16].

Investment Rating - The industry investment rating is "Outperform the Market" (maintained rating) [6] Core Viewpoints - The approval of D-Allulose as a new food ingredient in China marks its official application license, indicating significant market potential as a low-calorie sweetener with health benefits [1][2] - The global D-Allulose market is projected to grow at a CAGR of 33.26% from 2019 to 2023, with an expected market size of USD 545 million by 2030 [1] - Companies with relevant production capacity and technology are expected to benefit from the industry boom, with key recommendations including Bailong Chuangyuan, Baolingbao, and COFCO Technology [3] Summary by Sections Section 1: Industry Overview - D-Allulose is a natural low-calorie sweetener found in various plants, with a sweetness level of 70% compared to sucrose and only one-tenth of its calories [1] - The substance has been recognized for its health benefits, including vascular health and blood sugar regulation [1] Section 2: Production and Companies - COFCO Technology is the first and only company in China to produce D-Allulose using enzyme technology, having developed a proprietary enzyme for its production [2] - Bailong Chuangyuan has achieved over RMB 156 million in revenue from D-Allulose, with plans for significant capacity expansion in Thailand [3] - Baolingbao has been involved in D-Allulose research for nearly a decade and is expanding its production capacity to 30,000 tons by 2026 [3] Section 3: Investment Recommendations - The report recommends buying shares of Bailong Chuangyuan, Baolingbao, and COFCO Technology due to their established market positions and expansion plans [3][5]

Group 1: Industry Overview - The sugar substitute industry is experiencing positive developments, with the sugar substitute concept stocks showing strong performance, particularly in the A-share market, where the market capitalization of Baolingbao approaches 5 billion yuan [1] - The market size of sugar substitutes in China reached 1.8 billion yuan in 2023, with projections to exceed 3.3 billion yuan by 2028, driven by increasing consumer demand for healthier diets and reduced sugar intake [4] Group 2: Company Developments - Baolingbao, a key player in the sugar substitute market, reported a net profit of 50 million yuan in Q1, representing a year-on-year increase of 117.35% [1] - The company is expanding its production capacity for D-alulose, with plans to start a 20,000-ton annual production project by March 2025, aiming for a total capacity of approximately 30,000 tons by 2026 [2] - Other companies like Bailing Chuangyuan and Sanyuan Biological are also increasing their production capacities for D-alulose, with Bailing Chuangyuan's project set to commence in May 2024 [2][3] Group 3: Market Trends - D-alulose, a rare sugar with 70% of the sweetness of sucrose but only 0.3% of its calories, is gaining traction in the market due to its high sweetness, low calories, and safety [5] - The global market for D-alulose was valued at approximately 237 million USD in 2023, with a compound annual growth rate (CAGR) of 7.7%, expected to reach 423 million USD by 2030 [5] Group 4: Stock Performance - Sugar substitute concept stocks have shown strong performance this year, with an average increase of 20.51%, significantly outperforming the Shanghai Composite Index [6] - Several sugar substitute stocks, including Baolingbao and Bailing Chuangyuan, have seen cumulative increases exceeding 40% [6] - As of July 2, 2023, six sugar substitute concept stocks reported net profits exceeding 100 million yuan in Q1, indicating robust financial performance [6]

Group 1 - The announcement by the National Health Commission regarding the approval of D-Allulose and 20 other "new food" safety assessment materials has led to a surge in the sugar substitute sector, with companies like Baolingbao and Bailong Chuangyuan hitting the daily limit increase [1][2] - D-Allulose is a natural low-calorie sweetener with a sweetness level about 70% that of sucrose, but with only one-tenth the calories, making it a promising alternative to sugar due to its various health benefits [2][3] - The global market for D-Allulose is projected to reach approximately $200 million in 2024 and $500 million by 2030, indicating significant growth potential [2] Group 2 - The approval of D-Allulose in China is expected to reshape the supply chain dynamics, as the market has previously relied heavily on exports, with D-Allulose only being approved in 13 countries including the US and Japan [3][4] - Companies involved in the sugar substitute sector are actively expanding their production capacities, with Baolingbao planning to increase its annual production capacity to over 20,000 tons by 2025, and Jinhe Industrial already having a capacity of 10,000 tons [4][5] - The production of D-Allulose is complex and costly, but companies like Jinhe Industrial are utilizing advanced enzyme technology to reduce production costs and enhance efficiency [4][5]

Group 1 - The sugar substitute concept experienced significant upward movement, with Baolingbao hitting the daily limit up [1] - Sanyuan Biological rose over 10%, indicating strong market interest in the sector [1] - Other companies such as Bailong Chuangyuan, Fengyuan Pharmaceutical, Jinhai Biological, and Weilan Biological also saw gains, reflecting a broader trend in the sugar substitute industry [1]

Group 1: Wind Power Gearbox Industry - The report highlights the scarcity of wind power gearboxes, with a focus on the expected performance and valuation elasticity due to increased production capacity and orders [2][24][25] - The company has completed its precision wind power gearbox production project, with a significant increase in sales expected in 2025, leading to a projected gross margin recovery to 16.6% by 2025, an increase of 10 percentage points from 2024 [2][25] - A strategic cooperation agreement with Goldwind Technology was signed in October 2024, establishing a foundation for future orders, with the gearbox (speed increaser) accounting for 23% of the value, which is nine times that of the reducer, indicating substantial growth potential [2][25][26] Group 2: Functional Sugar Industry - The report indicates that the company is the largest producer of oligosaccharides globally, with a focus on functional sugars, which are expected to see rapid growth in demand [27][30] - The company has optimized its operational strategies and management efficiency, leading to a return to growth in 2024, with significant contributions from prebiotics and sugar substitutes [27][28] - Future production expansions include a 20,000-ton alulose sugar project starting in March 2025 and the introduction of new products using synthetic biology technology, which are expected to enhance profitability [31][32] Group 3: Construction and Chemical Engineering Industry - The report emphasizes the rising investment opportunities in infrastructure in the central and western regions of China, particularly in Xinjiang and Tibet, driven by the Belt and Road Initiative [3][43][45] - The chemical engineering sector is expected to benefit from the acceleration of coal chemical projects, with a total investment exceeding 1.4 trillion yuan, indicating strong order support for chemical engineering companies [3][46] - The report recommends companies such as Sany Road and Bridge, China Energy Construction, and China Electric Power Construction as key players in the infrastructure and chemical engineering sectors [3][44][46]