Company and Industry Summary Company Overview - The company primarily exports products and is positioned in the customized mid-to-high-end market, which makes it less affected by domestic price competition [2][8] - A 20% tariff is borne by customers, thus having no direct impact on the company's operating performance [2][4] Capacity Expansion Plans - The company plans to add 20,000 tons of capacity in 2025, with completion expected by the end of the year, and partial production starting in 2026 [2][5] - A project in Thailand with a capacity of 49,000 tons is expected to be completed by the end of 2026 and to start production in 2027 [2][5][28] Market Dynamics - The acceptance of functional sugars in the European and American markets is high, particularly for mid-to-high-end products, although certification is strict [2][9] - The Chinese market focuses on cost-effectiveness but is gradually transitioning to high-end products, with a potential lag of 3-5 years compared to Europe and the U.S. [2][9][30] Product Insights - Allulose, a health sweetener, is in the early stages of global market acceptance and has not yet been approved in China, but domestic manufacturers are already incorporating it into their products [2][10] - The current average selling price of allulose is around 25,000 yuan, with a cost reduction of about 10% [2][13] - The market demand for allulose is expected to be no less than that for erythritol, indicating significant potential [2][13] Growth Projections - The resistant dextrin market is growing steadily, with the company achieving over 50% annual growth, limited by capacity [2][15] - The expected production of resistant dextrin in 2024 is projected to be 10,000 to 20,000 tons, doubling from 2023 [2][15] Financial Performance - The company's overall performance in Q2 2025 is expected to be better than Q1, despite a temporary export halt due to tariff policies [3][18] - The gross margin for allulose improved from 24% to 34% in Q1, while resistant dextrin margins range from 50% to 60% for customized products [20] Market Trends and Challenges - The domestic functional sugar market is experiencing slow growth due to consumer acceptance and regulatory approval delays [30] - The company is focusing on international markets for growth, particularly in the U.S., EU, and Japan, where there is significant potential for allulose and resistant dextrin [29][30] Future Outlook - The company maintains an optimistic outlook for Q2 2025 and the full year, expecting to meet performance targets set by the chairman [32] - Investors should pay attention to the approval status of allulose and other products, as national policies support the development of natural health foods and beverages [32]