Summary of Huayi Biological Conference Call Company Overview - Huayi Biological holds a dominant position in the global cholesterol market with a market share of 70%-80% [2][7] - The company utilizes patented technology from lanolin, creating high technical barriers and limiting the number of competitors in high-purity cholesterol production [2][7] Key Insights and Arguments - The Ministry of Agriculture has approved the inclusion of cholesterol in aquaculture feed, with rapid completion of provincial registration expected, positioning Huayi Biological to accelerate commercialization of cholesterol products [2][9] - Adding cholesterol to aquaculture feed can reduce fishmeal usage by 8%-10%, leading to overall cost savings of 200-700 RMB per ton of feed despite an additional cost of 500-1,000 RMB for cholesterol [2][5] - The total volume of aquaculture feed in 2024 is projected to be approximately 22.6 million tons, with shrimp and crab feed accounting for about 3.5 million tons, indicating significant market potential for cholesterol [2][6] Pricing and Market Dynamics - The current price of industrial-grade cholesterol produced by Huayi Biological is around 500 RMB per kilogram, with potential for price increases due to rising demand and supply constraints [2][8] - The price of fishmeal ranges from 15,000 to 17,000 RMB per ton, making cholesterol a cost-effective alternative [2][8] Commercialization and Growth Expectations - Huayi Biological anticipates that 2026-2027 will be critical growth years for cholesterol sales, with plans to adjust sales strategies and expand production capacity based on market demand [2][10] - The company is also advancing its pharmaceutical business, with new products expected to contribute to revenue growth [4][15] Strategic Partnerships and Product Development - Huayi Biological has renewed its strategic cooperation agreement with DSM for 25-hydroxyvitamin D3, with optimistic conditions for future product launches [4][12] - The company is developing L-alanine fermentation technology, which has cost and environmental advantages, targeting well-known clients like BASF [4][14] Impact of Industry Trends - The pharmaceutical business has stabilized after the impact of centralized procurement, and the company is actively applying for new products to achieve business growth [4][15] - Other vitamin products, such as biotin and B6, have begun production and are expected to enter the market soon, with rising prices positively impacting vitamin D3 prices [4][17] Additional Considerations - Cholesterol's role in shrimp and crab farming is critical for molting, reproduction, and overall growth efficiency, highlighting its importance in aquaculture [3][11] - The demand for cholesterol is expected to influence vitamin D3 prices, which are currently low in inventory and may see price increases [11][12] Future Projections - The market for fish feed is significantly larger than that for shrimp and crab feed, indicating greater potential for cholesterol adoption in fish feed [19][20] - Capital expenditures in the coming years will primarily focus on convertible bond projects, with cholesterol expansion requiring minimal investment due to pre-allocated resources [20]