Core Viewpoint - The leading domestic company in sucralose, Jinhui Industrial, announced a price increase for sucralose effective August 7, 2025, due to rising operational costs and the need to stabilize market prices after a period of low pricing and intense competition [2][4]. Price Adjustment Details - Jinhui Industrial's new pricing is set at 175 RMB/kg for 25 kg bulk packaging and 177 RMB/kg for 10 kg small packaging, reflecting a significant increase from previous low points [2][3]. - Other companies, including New Qian'an, Kehong Bio, and Kangbao Biochemical, also issued price adjustment notices around the same time, indicating a coordinated effort to stabilize prices in the market [3][4]. Market Conditions and Reasons for Price Increase - The price increase is attributed to several factors, including disordered competition in the industry, rising raw material costs, and a decline in downstream demand for sucralose products [4][6]. - Jinhui Industrial noted that the demand for bulk chemicals has been weak since the second quarter of 2025, impacting their sales of food additives [4][6]. Historical Price Trends - In 2024, the price of sucralose fell to 100,000 RMB/ton, leading to industry-wide losses, with an average gross loss of 16% [5][6]. - Following a series of price increases throughout 2024, the price reached 250,000 RMB/ton by January 2025, indicating a recovery from previous lows [5][6]. Industry Dynamics - The sucralose industry has seen significant capacity expansion from 12,800 tons in 2019 to 34,800 tons in 2024, driven by high demand and profitability from 2016 to 2022 [6][7]. - Analysts predict further price increases due to reduced market supply from production cuts, which have been implemented to stabilize prices [7][8]. Future Outlook - The demand for low-sugar and no-sugar products, such as Coca-Cola's no-sugar variant, is expected to support the growth of sucralose and stabilize its pricing [7][8]. - Historical data suggests that sucralose prices could have upward potential, as seen in previous peaks reaching 480,000 RMB/ton [7][8].

Group 1: New Listings and Market Performance - New Qian Group officially listed on the Hong Kong Stock Exchange on June 10, with a closing price increase of 21.43% after an initial jump of 60% [1] - The company priced its shares at HKD 18.9, issuing 10.5854 million shares, and primarily produces high-intensity sweeteners like sucralose, serving major clients such as Coca-Cola and Nestlé [1] - The strong debut reflects positive market expectations for the food additive industry, particularly for sugar substitutes, enhancing the company's brand influence and market share [1] Group 2: Upcoming Listings - Cao Cao Travel, a ride-hailing platform incubated by Geely Group, passed the hearing for listing on the Hong Kong main board on June 9 [2] - The company reported revenues of RMB 7.631 billion, RMB 10.668 billion, and RMB 14.657 billion for 2022 to 2024, with losses of RMB 2.007 billion, RMB 1.981 billion, and RMB 1.246 billion respectively [2] - The anticipated listing aims to provide additional funding to support technological innovation and service upgrades in a competitive market [2] Group 3: Financial Performance of Existing Companies - Saint Bella, the largest postpartum care and recovery group in Asia, also passed the hearing for listing on June 9 [3] - The company projected revenues of RMB 472 million, RMB 560 million, and RMB 799 million from 2022 to 2024, with net profits of approximately RMB -45 million, RMB 21 million, and RMB 42 million [3] - The steady revenue growth and improving net profit indicate the viability of its business model and market potential, with the listing expected to enhance service range and brand influence [3] Group 4: Financial Challenges - Yau Lee Group announced an expected net loss of HKD 100 million to HKD 130 million for the fiscal year ending March 31, 2025, marking a shift from profit to loss [4] - The loss is attributed to negative adjustments in contract prices for public housing projects, reducing contract value and adversely affecting the gross margin of the construction business [4] - The downturn in the Hong Kong property market has led to unrealized revaluation losses on commercial investment properties, highlighting risks in the construction and real estate sectors [4]

Investment Rating - The investment rating for the company is "Outperform the Market" [4][11][28] Core Views - The company achieved a net profit attributable to shareholders of 246 million yuan in 2024, representing a year-on-year growth of 27%. In the first quarter of 2025, the net profit reached 81.4 million yuan, a significant increase of 52% [1][13] - The company’s revenue for 2024 was 1.152 billion yuan, up 32.64% year-on-year, with a gross profit margin of 33.65% [1][12] - The company is expanding its production capacity with new projects, including a 30,000-ton dietary fiber project and a 15,000-ton crystalline fructose project, which are expected to contribute to sustained revenue and profit growth [1][11][28] Summary by Sections Financial Performance - In 2024, the company reported total revenue of 1.152 billion yuan, a 32.64% increase year-on-year, and a net profit of 246 million yuan, up 27.26% [1][12] - For Q1 2025, the company achieved revenue of 313 million yuan, a 24.27% increase year-on-year, and a net profit of 81.4 million yuan, reflecting a 52.06% growth [1][13] - The gross profit margin for 2024 was 33.65%, while for Q1 2025, it improved to 39.74% [1][13] Business Segments - The company’s main business segments include prebiotics, dietary fibers, healthy sweeteners, and other starch sugars. In 2024, the prebiotics segment generated 322 million yuan in revenue, a 25.43% increase, while the dietary fiber segment saw revenue of 624 million yuan, up 40.42% [2][21] - The healthy sweeteners segment, driven by increased demand for allulose in overseas markets, generated 156 million yuan, a 13.85% increase, with allulose accounting for 14.12% of total revenue [2][21] Expansion Projects - The company is actively advancing its "Functional Sugar Drying Expansion Project" and "Thailand Health Project," which are expected to enhance profitability. The functional sugar project aims to increase production capacity for isomaltulose and other products [3][25][26] - The Thailand production base project is in the planning stage and is expected to start construction in the second or third quarter of 2025, aiming to produce 12,000 tons of crystalline allulose and 7,000 tons of liquid allulose annually [4][26] Market Outlook - The global market for allulose has grown from 33 million USD in 2019 to 173 million USD in 2023, with a compound annual growth rate of 33.26%. It is projected to reach 545 million USD by 2030 [9][27] - The approval process for allulose as a new food ingredient in China is progressing, with significant policy support expected to boost the market further [9][27]