Market Overview - On May 9, major indices including the Shanghai Composite Index, Shenzhen Component Index, ChiNext Index, and STAR Market Index experienced declines, with the Shanghai Composite closing at 3342.00 points, down 0.3% [1] - Total trading volume in the Shanghai and Shenzhen markets was 11,920.22 billion yuan, a decrease of 1,013.8 billion yuan compared to the previous trading day [1] Sector Performance - Strong sectors included banking, beauty care, textiles, jewelry, and electricity, while sectors such as electronics, computers, defense, media, retail, securities, education, and real estate saw significant declines [2] - The textile and coal industries were the only two sectors to experience net inflows of capital, with net inflows of 1.66 million yuan and 1.01 million yuan, respectively [6] Stock Performance - A total of 1,119 stocks rose, while 3,898 stocks fell, with 60 stocks hitting the daily limit up and 10 stocks hitting the limit down [2] - *ST Yushun recorded the highest number of consecutive limit-up days at 11, followed by several other stocks with fewer consecutive limit-ups [5] Capital Flow - The net outflow of main funds from the Shanghai and Shenzhen markets was 36.563 billion yuan, with the ChiNext seeing a net outflow of 17.452 billion yuan [6] - Notably, BYD had the highest net inflow of main funds at 636 million yuan, followed by Kela Software and others [9][10] Institutional Activity - Institutions had a net selling of approximately 311 million yuan, with the highest net buying in Aopu Optoelectronics at about 103 million yuan [14][15] - Aopu Optoelectronics saw significant trading activity, with two institutions appearing on the leaderboard, collectively net buying 103 million yuan [16]

Investment Rating - The report gives a "Buy" rating for the company, marking the first coverage of the stock [2]. Core Insights - The introduction of professional managers has aided the company's reform, with product structure optimization driving profit improvement. The company has a rich product matrix in functional sugars and nutritional supplements, and has successfully adjusted its operational strategies during industry downturns, leading to a significant rebound in profit and gross margin improvement [1]. - The company stands to benefit from anti-dumping measures on erythritol and is positioned to capture the growing domestic market for allulose. With a production capacity of 30,000 tons per year, the company is expected to see volume and price increases in the European market due to its favorable anti-dumping tax rate [1]. - In 2024, all major segments achieved growth in both sales volume and gross margin, with a net profit of 111 million yuan, a year-on-year increase of 106%. The company has set ambitious performance targets for its stock incentive plan, reflecting confidence in future growth [1]. Summary by Sections Company Overview - Founded in 1997, the company is a leading player in the functional sugar industry in China, focusing on the research and production of biological (multi)sugars. It has established strategic partnerships with global giants like Coca-Cola and Yili, and has a comprehensive product system covering various functional sugars [18][21]. Management and Strategy - The company has undergone significant management restructuring, bringing in experienced professionals to enhance strategic planning and operational efficiency. The management team now combines international experience with local insights, which is expected to strengthen the company's competitive position in the functional sugar sector [24][25]. Financial Performance - The company forecasts net profits of 181 million, 216 million, and 260 million yuan for 2025, 2026, and 2027, respectively, with corresponding PE ratios of 20.07, 16.82, and 13.99 times. This indicates a strong growth trajectory compared to industry averages [2][12]. Product Segments - The company has diversified its product offerings, including prebiotics, dietary fibers, and sugar substitutes, which are experiencing rapid growth in demand. The market for these products is expected to expand significantly, driven by increasing consumer health awareness [1][7][23]. Market Outlook - The report highlights the potential for growth in the allulose market and the stability of the erythritol market, suggesting that the company is well-positioned to capitalize on these trends. The anticipated approval of allulose in China is expected to open up new market opportunities [1][10].

Investment Rating - The report maintains an "Accumulate" rating for the company with a target price of 26.85 RMB [8][9]. Core Views - The company reported a revenue of 5.3 billion RMB in 2024, remaining stable year-on-year, but the net profit attributable to shareholders decreased by 21% to 560 million RMB [1]. - The decline in net profit is attributed to pressures in the bulk chemical sector and increased unit costs due to the suspension of sucralose production [1]. - The report anticipates a recovery in the sweetener market, supported by supply-side and cost-side factors, which could enhance future profitability [1][3]. Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 5.3 billion RMB, with a net profit of 560 million RMB, reflecting a year-on-year decrease of 21% [1]. - The fourth quarter of 2024 saw a revenue of 1.26 billion RMB, up 4% year-on-year but down 16% quarter-on-quarter [1]. - The company plans to distribute a cash dividend of 0.83 RMB per share, with a payout ratio of 82% [1]. Market Dynamics - The sweetener prices began to rise in the second half of the previous year due to cost support and supply-side coordination [2]. - The report notes a 14% year-on-year decline in sucralose exports in the first two months of 2025, indicating ongoing market challenges [3]. Project Developments - The company successfully launched several projects, including a 600,000-ton sulfuric acid production facility and an 80,000-ton electronic-grade hydrogen peroxide project, which are expected to contribute to future profits [4]. Profit Forecast and Valuation - The forecast for net profit attributable to shareholders is 1.02 billion RMB for 2025, 1.26 billion RMB for 2026, and 1.49 billion RMB for 2027, reflecting growth rates of 83%, 24%, and 18% respectively [5]. - The report assigns a 15x PE ratio for 2025, leading to a target price of 26.85 RMB, which is an increase from the previous target of 25.06 RMB [5].