BLB(SZ:002286) HUAXI Securities·2025-11-11 11:31Investment Rating - The investment rating for the company is "Buy" [1] Core Insights - The company's revenue, net profit attributable to shareholders, and net profit after deducting non-recurring gains and losses for Q3 2025 were CNY 727 million, CNY 41 million, and CNY 34 million, respectively, representing year-on-year growth of 12.23%, 30.21%, and 11.72% [2] - The significant growth in performance is attributed to the substantial increase in sales of core products such as sugar-reduced sweeteners, prebiotics, and dietary fibers, along with improved gross margins due to cost reduction and efficiency enhancement [2][3] - The company's three core products accounted for 61.5% of revenue, with a gross margin contribution of 68.6%, and their sales revenue grew by 25.8% year-on-year [3] - The approval of HMO (Human Milk Oligosaccharides) for infant formula has been finalized, allowing for the expansion of product offerings in this category [4] - The gross margin for Q3 2025 was 13.54%, an increase of 1.76 percentage points year-on-year, while the gross margin for core products improved by 5.3 percentage points [5] Summary by Sections Financial Performance - For the first three quarters of 2025, the company reported revenue of CNY 2.126 billion, net profit attributable to shareholders of CNY 134 million, and operating cash flow of CNY 158 million, reflecting year-on-year growth of 15.98%, 32.58%, and 62.38% respectively [2] - The company’s inventory decreased by 8.06% year-on-year, with inventory turnover days reduced to 39 days [6] Investment Recommendations - The company is positioned as a leader in the functional sugar industry, with a strong market share in sugar-reduced sweeteners, prebiotics, and dietary fibers [7] - Short-term outlook suggests further improvement in gross margins due to declining corn prices and production efficiency [7] - Mid-term prospects include accelerated approval for allulose, which is expected to open up the domestic market [7] - Long-term growth is anticipated from the launch of high-value products such as HMOs, DHA, and sugar-free resistant dextrin [7] Financial Projections - Revenue projections for 2025, 2026, and 2027 are CNY 2.718 billion, CNY 2.966 billion, and CNY 3.211 billion, respectively, with corresponding net profits of CNY 179 million, CNY 222 million, and CNY 269 million [9][11]