Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 12.70 [1][4]. Core Views - The company reported Q3 revenue of RMB 5.9 billion, a year-over-year decrease of 2% and a quarter-over-quarter decrease of 1%. However, the net profit attributable to the parent company was RMB 1.26 billion, showing a year-over-year increase of 141% and a quarter-over-quarter increase of 68% [1]. - The company’s net profit for the first three quarters of 2025 reached RMB 30.3 billion, a year-over-year increase of 52%, driven by the acquisition of an overseas company which contributed approximately RMB 7.8 billion to the profit [1][4]. - The report anticipates a recovery in the amino acid market, supported by increased penetration in the aquaculture sector and a favorable demand outlook due to reduced soybean meal usage [1][3]. Summary by Sections Financial Performance - For the first three quarters of 2025, the feed amino acids revenue was RMB 8.19 billion, down 2% year-over-year, while lysine sales increased despite price declines. The average prices for lysine and threonine were RMB 8.5/kg and RMB 10.0/kg, reflecting year-over-year decreases of 16% and 5% respectively [2]. - The overall gross margin improved by 2.4 percentage points to 21.3% due to lower raw material costs [2]. Market Outlook - The prices for key products such as lysine and threonine are currently at low levels, but demand is expected to recover as aquaculture penetration increases and consumer demand rebounds [3]. - The company is expanding its product line through acquisitions, which will enhance its high-value pharmaceutical amino acid offerings and support its international expansion strategy [3]. Profit Forecast and Valuation - The net profit forecast for 2025 has been adjusted down to RMB 3.54 billion, a 3% decrease from previous estimates, while maintaining projections of approximately RMB 3.6 billion and RMB 3.8 billion for 2026 and 2027 respectively [4]. - The expected earnings per share (EPS) for 2025 is RMB 1.26, with a projected price-to-earnings (P/E) ratio of 11x for 2025 [4][8].

Investment Rating - The report maintains an "Accumulate" rating for the company with a target price of HKD 7.46 [8][9]. Core Views - The company's revenue for 2024 is projected at RMB 27.757 billion, a slight decrease of 0.89% year-on-year, while the net profit attributable to shareholders is expected to decline by 26.45% to RMB 2.312 billion [7]. - The report highlights that the company's net profit for 2024 exceeded expectations due to strong sales of monosodium glutamate and higher interest income [1]. - The outlook for the monosodium glutamate market is optimistic, with expectations of price recovery and improved profitability in the coming years [3][5]. Summary by Sections Financial Performance - In 2024, the company achieved a revenue of RMB 27.757 billion, down 0.89% year-on-year, and a net profit of RMB 2.312 billion, down 26.45% year-on-year [7]. - The company plans to distribute a cash dividend of RMB 9.3 billion, with a payout ratio of 40% [1]. Segment Performance - The food additives segment saw a revenue increase of 6% to RMB 144 billion, driven by higher sales of monosodium glutamate and starch sweeteners, although the gross margin decreased by 5.2 percentage points to 10.8% due to falling prices [2]. - The animal nutrition segment's revenue decreased by 2% to RMB 87 billion, while the high-end amino acids segment grew by 12% to RMB 22 billion [2]. Market Outlook - The report anticipates a recovery in the amino acid market in 2025, with prices for monosodium glutamate expected to rise due to improved demand and lower raw material costs [3][5]. - The company is expanding its overseas production bases and enhancing its market position in monosodium glutamate [4]. Profit Forecast and Valuation - The net profit forecasts for 2025 and 2026 have been raised to RMB 2.419 billion and RMB 2.606 billion, respectively, reflecting a year-on-year growth of 4% and 8% [5]. - The report sets a target price of HKD 7.46 based on a 7x PE valuation for 2025, considering the company's improving profitability and market conditions [5].