Group 1: Market Trends - The demand for konjac and its products is steadily increasing, driving price growth due to strong downstream demand[2] - China's konjac planting area peaked at 2.87 million mu in 2020 but has declined to 2.42 million mu by 2024[2] - The consumption of konjac in China has grown from 14.8 thousand tons in 2011 to 54.84 thousand tons in 2024, with a compound annual growth rate (CAGR) of 10.6%[2] Group 2: Price Trends - The price of fresh konjac has risen from 1.3 yuan per jin in 2004 to 8.8 yuan per jin in 2024[2] - Konjac powder prices increased from 38,000 yuan per ton in 2002 to 105,000 yuan per ton in 2024, while flower konjac powder rose from 26,000 yuan per ton to 94,000 yuan per ton[2] - The gross profit margin for konjac powder in 2024 is reported at 25.15%, an increase of 3.8 percentage points year-on-year[41] Group 3: Company Performance - Yichang Konjac's revenue reached 617 million yuan in 2024, a year-on-year increase of 28.76%, with a net profit of 86.72 million yuan, up 64.41%[46] - In Q1 2025, Yichang Konjac reported revenue of 152 million yuan, a 35.03% year-on-year increase, and a net profit of 22.70 million yuan, up 36.95%[46] Group 4: Industry Overview - The overall market concentration in China's konjac industry is low, with a high degree of marketization[22] - The median price-to-earnings (P/E) ratio for the North Exchange's consumer service sector increased from 50.5X to 52.4X[53] - The total market capitalization of the North Exchange's consumer service sector rose from 116.7 billion yuan to 121.7 billion yuan[58]

Market Overview - The demand for konjac and its products is steadily increasing, driven by strong downstream demand, leading to price rises[2] - China's konjac planting area peaked at 2.87 million mu in 2020 but has declined to 2.42 million mu by 2024[2] - The consumption of konjac in China has grown from 14.8 thousand tons in 2011 to 54.84 thousand tons in 2024, with a compound annual growth rate (CAGR) of 10.6%[2] Price Trends - The price of fresh konjac has risen from 1.3 RMB per jin in 2004 to 8.8 RMB per jin in 2024, indicating a long-term upward trend[2] - The price of white konjac powder increased from 38,000 RMB per ton in 2002 to 105,000 RMB per ton in 2024, while the price of flower konjac powder rose from 26,000 RMB per ton to 94,000 RMB per ton during the same period[2] Company Performance - Yicheng Konjac reported revenue of 617 million RMB in 2024, a year-on-year increase of 28.76%, and a net profit of 86.72 million RMB, up 64.41% year-on-year[2] - In Q1 2025, Yicheng Konjac's revenue reached 152 million RMB, growing 35.03% year-on-year, with a net profit of 22.70 million RMB, up 36.95% year-on-year[2] Stock Market Insights - The median price change for companies in the North Exchange's consumer services sector was +4.90% from June 23 to June 27, 2025, with 34 companies (92%) experiencing gains[2] - The total market capitalization of the North Exchange's consumer services sector increased from 116.7 billion RMB to 121.7 billion RMB during the same period[2] Industry Valuation - The median TTM price-to-earnings (P/E) ratio for the broader consumer sector rose from 70.3X to 73.7X[2] - The median TTM P/E ratio for the food and agriculture sector increased from 43.2X to 47.3X, with notable gains from companies like Knight Dairy (+12.52%) and Yicheng Konjac (+9.60%)[2] Risk Factors - Potential risks include macroeconomic fluctuations, market competition, and statistical data inaccuracies[57]

Group 1: Investor Relations Activities - The company conducted a specific investor research activity on June 25, 2025, via Tencent online meeting and in the company conference room [3][4] - Attendees included major financial institutions such as Eastmoney Securities, Sequoia China, and BlackRock [4] Group 2: Market Insights and Predictions - The price of konjac raw materials in 2025 will depend on supply factors, including planting area and weather conditions, which directly affect production and pricing [4][5] - The probability of explosive growth in konjac planting area is low due to specific growing conditions, but an increase in planting area is expected this year due to rising prices [5] Group 3: Market Expansion Opportunities - The konjac industry is targeting growth in health-oriented, functional, and environmentally friendly markets, focusing on low-calorie meal replacements, plant-based innovations, and biodegradable materials [6] - The company plans to leverage technological upgrades and precise marketing to capture high-value market segments [6] Group 4: Production Capacity and Future Products - Current production capacity for konjac balls is 35,000 tons, with plans to increase to 80,000 tons based on market feedback [7] - New product development includes frozen products and jelly powders aimed at the beverage and dairy sectors [7] Group 5: Business Collaboration and Profitability - The company collaborates with clients like Wei Long and Mi Xue Bing Cheng, primarily through ODM production [8] - The company aims to maintain stable gross margins by gradually passing on cost pressures through a cost-plus pricing strategy [10] Group 6: Future Business Strategy - The company plans to increase investment in application research and development to explore new uses for konjac gum [11] - The konjac industry is viewed positively, with expectations of continued growth, and the company remains confident in its market prospects [11]

Summary of the Conference Call on the Konjac Industry and Yizhi Konjac Company Industry Overview - The konjac planting area in China is approximately 2 million acres in 2025, mainly distributed in Yunnan, Guizhou, and Sichuan provinces, often in intercropping patterns [2][4][5] - The konjac plant requires specific altitude and climate conditions, typically growing in mountainous areas, with a growth cycle that can last up to five years [2][6][7] - The market for konjac, particularly in health food sectors, is expanding due to its recognized health benefits, including weight loss and cholesterol reduction [2][12] Company Profile - Yizhi Konjac is a leading enterprise in the konjac industry, with two subsidiaries and a chairman recognized as a national talent [2][10] - The company has maintained a net asset return rate of approximately 12.3% over the past three years, with a post-listing price-to-earnings ratio of 27 times and a price-to-book ratio of 3.79 times [2][10] - In 2024, the company reported revenue of 617 million yuan and a net profit of 86.7 million yuan, with a significant increase in Q1 2025 revenue to 150 million yuan and net profit of 22.7 million yuan [4][15] Market Dynamics - The price of konjac raw materials increased by approximately 80% in 2024, affecting cash flow due to rising procurement costs [4][17][15] - The demand for konjac-related food ingredients surged in 2024, driven by health trends and the popularity of brands using konjac as a raw material [3][27] - The planting area is expected to increase by 10% to 15% in 2025, but adverse weather conditions could impact overall yield [28] Product and Application - Yizhi Konjac focuses on mid-to-late stage technology research and development, deep processing, and brand operation, with products including konjac hydrophilic colloids, konjac foods, and beauty products [2][10][13] - The company is recognized for its global sales leadership in purified konjac powder and collaborates with several well-known enterprises [2][10][14] - The konjac powder has a shelf life of 18 months, while finished products can last up to 24 months [19] Future Strategy - The company aims to expand its market share in health foods and enhance its product offerings, focusing on the extraction of glucomannan from konjac [16][32] - Future growth is expected to be driven by deep processing trends, increasing market concentration, and enhanced trade acceptance [16] - The company plans to strengthen its research and development capabilities and expand into new product categories, including jelly, pudding, and health supplements [16] Competitive Landscape - Yizhi Konjac holds a significant position in the global market, with an annual production capacity of 10,200 tons, accounting for approximately 12% of global sales [22] - The company faces competition from other domestic firms, but the top three companies collectively hold over 20% of the global market share [22] Conclusion - The konjac industry is poised for growth, driven by health trends and increasing consumer awareness. Yizhi Konjac is strategically positioned to capitalize on these trends through innovation and market expansion efforts [2][10][16]

Summary of the Conference Call for Yizhi Konjac Company Overview - **Company**: Yizhi Konjac - **Industry**: Konjac products, including konjac powder, konjac food, and related applications Key Points and Arguments 1. **Revenue Performance**: In Q1, Yizhi Konjac's konjac powder revenue remained flat year-on-year, while overseas markets grew over 60% due to higher cost acceptance from international clients and expansion into animal nutrition and health products [2][16] 2. **Konjac Food Segment Growth**: The konjac food segment saw significant growth with a year-on-year increase of 87%, driven by rapid market expansion and strong performance from the marketing team. The OEM business grew by 96%, with major contributions from clients like Weilong, Three Squirrels, and Mixue Ice City [2][4][7] 3. **Partnership with Kudi Coffee**: The company partnered with Kudi Coffee to supply konjac balls, although Kudi is not an exclusive buyer. The profit margin for these products is low due to strict cost control from downstream clients and intense market competition [2][10][11] 4. **Raw Material Cost Pressure**: Rising raw material prices have put pressure on profit margins. The company began using high-priced raw materials in Q1, with a lag in price transmission to downstream clients. The overseas market has seen smoother price transmission compared to the domestic market, which remains cautious [2][18] 5. **Strategies to Mitigate Margin Pressure**: The company is employing various strategies to address margin pressure, including developing new products (e.g., konjac balls, plant-based shrimp), expanding the customer base, increasing the sales proportion of konjac ingredients, and pushing for price transmission [2][18] 6. **Prepaid Accounts and Contract Liabilities**: Prepaid accounts increased by 75%, primarily for konjac purchases from Southeast Asia. Contract liabilities grew by 95%, mainly due to pre-received payments for konjac powder, with overseas orders being processed faster than domestic ones [5][24] 7. **Market Outlook for Konjac Food**: The konjac food market is expected to continue its explosive growth, with increasing consumer recognition of its health benefits. The company plans to focus on this sector over the next one to two years [21] 8. **OEM Client Expansion**: New OEM clients include Jin Zai, with significant contributions from established clients like Weilong and Three Squirrels. The company is also in discussions with other potential clients [7][9] 9. **Impact of Government Subsidies**: Government subsidies vary annually, typically ranging from 5 million to 10 million yuan. The company anticipates higher subsidies this year due to significant investments in projects [30] 10. **Raw Material Supply and Pricing Trends**: The price gap between yellow and flower konjac has narrowed from 30% to under 10%, with both maintaining high price levels. The company expects procurement costs to remain high this year [23][38] Additional Important Insights - **Seasonal Sales Trends**: Historical data indicates that konjac ball sales peak in Q2 and Q3 due to increased demand for fruit tea in warmer weather [11] - **New Product Development**: The company plans to launch new tea drink ingredients, focusing on taste and form variations while maintaining similar application scenarios [12] - **Market Dynamics**: The konjac food industry is experiencing a shift, with larger manufacturers building their production lines, potentially affecting the OEM market share [20][37] - **Future Capacity Plans**: The company aims to fully utilize konjac powder production capacity by June 2025, with a target of 10,200 tons [17] This summary encapsulates the key insights from the conference call, highlighting the company's performance, market dynamics, and strategic initiatives in the konjac industry.