Core Viewpoint - The article discusses the potential of D-Allulose as a sugar substitute, highlighting its approval as a new food ingredient and the subsequent market dynamics, including production capacity expansion and challenges in consumer market adoption [6][10][42]. Group 1: D-Allulose Overview - D-Allulose is a natural sugar found in fruits and plants, with a sweetness level about 70% that of sucrose and only 10% of the calories [8][42]. - It was officially approved as a new food ingredient by the National Health Commission on July 2, 2025, leading to a surge in market interest and stock prices of related companies [10][11]. Group 2: Production and Market Dynamics - Following the approval, companies like Microgen and COFCO announced their production capabilities, with several firms rapidly expanding their production capacity [17][20]. - By September 2025, multiple companies had reported significant production capacity plans, with some targeting annual outputs of up to 30,000 tons [21][22]. Group 3: Consumer Market Challenges - Despite the production enthusiasm, the consumer market remains relatively quiet, with only a few products, such as those from Nayuki Tea and Yoyi C, publicly utilizing D-Allulose [11][24]. - The slow adoption in the consumer market is attributed to internal project timelines within companies and the need for product development before market launch [28][31]. Group 4: Cost and Production Challenges - The cost of D-Allulose remains a significant barrier, with prices ranging from 20,000 to 24,000 yuan per ton, compared to traditional sugars like sucrose at around 6,000 yuan per ton [33][36]. - The production methods for D-Allulose, including fermentation and enzymatic conversion, present technical challenges that contribute to higher costs [37][40]. Group 5: Application Potential - D-Allulose is expected to find its initial applications in high-end markets where price sensitivity is lower, rather than as a direct substitute for sucrose in mainstream products [44][46]. - Its classification as a food ingredient rather than an additive allows for broader applications across various food categories, including baking and dairy products [48][49].

Core Viewpoint - The article discusses the rising interest and potential of D-allohexose (D-阿洛酮糖) as a sugar substitute in the food and beverage industry, highlighting its approval as a new food ingredient and the contrasting dynamics between production and consumer market adoption [1][5][21]. Production Dynamics - Major food and beverage companies are actively seeking to test D-allohexose, which is seen as a promising sugar alternative due to its low caloric content and ability to participate in the Maillard reaction [1][3]. - Following its approval on July 2, 2025, there was a significant surge in market interest, with a 4985% increase in the WeChat index for D-allohexose and notable stock price increases for related companies [1][3]. - Production capacity is rapidly expanding, with companies like Baolingbao and Jinhe Industrial planning to increase their annual production capacities to tens of thousands of tons [9][10][11]. Market Adoption - Despite the production enthusiasm, the consumer market remains relatively quiet, with only a few products incorporating D-allohexose, such as Naixue's tea and a probiotic drink from Youyi C [4][12]. - The slow market adoption is attributed to the lengthy process of product development and the high cost of D-allohexose compared to traditional sugars, which limits its immediate application in consumer products [14][15][21]. Cost and Production Challenges - The cost of D-allohexose remains a significant barrier, with prices ranging from 20,000 to 24,000 yuan per ton, compared to 6,000 yuan for white sugar [15][17]. - The production methods for D-allohexose, including fermentation and enzymatic conversion, present technical challenges that contribute to its higher costs [18][19]. Regulatory and Market Position - D-allohexose is classified as a new food ingredient rather than a food additive, allowing for broader applications across various food categories, unlike other sweeteners that are limited to specific uses [23][26]. - The article suggests that D-allohexose may find its initial applications in high-end markets where consumers are less price-sensitive and more focused on health benefits [21][22].

Core Insights - The launch of D-allulose by COFCO Group marks a significant breakthrough in China's high-end functional sugar sector, filling a gap in the domestic market and supporting the health transformation of the food industry [1][2] - D-allulose, a low-calorie sugar alternative, is expected to see substantial market growth, with a projected global market size of $14.77 million in 2024 and a compound annual growth rate exceeding 14% from 2025 to 2034 [1][2] Company Developments - COFCO Group has established a comprehensive patent portfolio in the biosynthesis of D-allulose, with 17 patents covering production strains, enzyme preparations, separation processes, and overall production technology, of which 10 core patents have been authorized [2] - The company has developed a one-stop application solution and differentiated supply capabilities across various sectors, including beverages, baking, dairy, and confectionery, to accelerate the domestic application of D-allulose [2] Industry Impact - The introduction of D-allulose aligns with national public health initiatives, such as the "Weight Management Year," providing significant industrial support for the Healthy China strategy [2] - COFCO Group's commitment to innovation is reflected in its establishment of a dedicated technology innovation department and policies aimed at enhancing R&D investment and sharing benefits with researchers, fostering a collaborative ecosystem for the health food industry [3]

Investment Rating - The industry investment rating is "Outperform the Market" (maintained rating) [6] Core Viewpoints - The approval of D-Allulose as a new food ingredient in China marks its official application license, indicating significant market potential as a low-calorie sweetener with health benefits [1][2] - The global D-Allulose market is projected to grow at a CAGR of 33.26% from 2019 to 2023, with an expected market size of USD 545 million by 2030 [1] - Companies with relevant production capacity and technology are expected to benefit from the industry boom, with key recommendations including Bailong Chuangyuan, Baolingbao, and COFCO Technology [3] Summary by Sections Section 1: Industry Overview - D-Allulose is a natural low-calorie sweetener found in various plants, with a sweetness level of 70% compared to sucrose and only one-tenth of its calories [1] - The substance has been recognized for its health benefits, including vascular health and blood sugar regulation [1] Section 2: Production and Companies - COFCO Technology is the first and only company in China to produce D-Allulose using enzyme technology, having developed a proprietary enzyme for its production [2] - Bailong Chuangyuan has achieved over RMB 156 million in revenue from D-Allulose, with plans for significant capacity expansion in Thailand [3] - Baolingbao has been involved in D-Allulose research for nearly a decade and is expanding its production capacity to 30,000 tons by 2026 [3] Section 3: Investment Recommendations - The report recommends buying shares of Bailong Chuangyuan, Baolingbao, and COFCO Technology due to their established market positions and expansion plans [3][5]