Core Viewpoint - The approval of D-allohexose as a new food ingredient marks a significant milestone for the domestic market, with Fuyang Bio becoming the first company to obtain production licenses, indicating a potential surge in demand for low-calorie sweeteners in various food applications [1][2][10]. Group 1: D-allohexose Overview - D-allohexose is a six-carbon ketose sugar found naturally in foods like figs and kiwis, with an energy coefficient of approximately 1.67 kJ/g [4]. - The production methods include microbial fermentation using E. coli AS10 and enzyme conversion from fructose, resulting in a product with a minimum content of 98 g/100 g [4][10]. - Recommended daily intake is ≤ 20 grams, with caution advised for infants, pregnant, and breastfeeding women due to insufficient safety data [5]. Group 2: Market Potential and Applications - D-allohexose has a sweetness level close to 70% of sucrose but only 10% of its calories, making it suitable for large-scale use in international food, beverage, and seasoning markets [6]. - The FDA and other international bodies have recognized D-allohexose as a safe substance, allowing it to be excluded from total sugars on nutrition labels, with a caloric value of 0.4 kcal/g [8]. Group 3: Fuyang Bio's Development - Fuyang Bio has established a strong research foundation for D-allohexose, collaborating with renowned experts and institutions to enhance production techniques and applications [7]. - The company has received multiple national invention patents in the field, showcasing its competitive edge in D-allohexose technology [7]. - The recent approval from the National Health Commission allows Fuyang Bio to fully enter the domestic market, indicating a strategic advantage in the burgeoning low-calorie sweetener sector [10].

Advanced Manufacturing Group - In June 2024, China's power battery sales reached 94.1 GWh, with a month-on-month increase of 7.6% and a year-on-year increase of 34.9% [3] - The export volume of power batteries was 15.8 GWh, showing a month-on-month growth of 17.1% and a year-on-year growth of 16.6% [3] - The installed capacity of power batteries in June was 58.2 GWh, with a month-on-month increase of 1.9% and a year-on-year increase of 35.9% [3] - Lithium iron phosphate (LFP) batteries accounted for 81.5% of the total installed capacity, with a year-on-year growth of 49.7%, indicating a strong market position [3] - The significant growth rate of LFP batteries is attributed to their cost advantages and improved performance, making them the preferred choice for most mid-to-low range electric vehicles [3] Consumer Group - The National Health Commission approved D-Allulose and other new food ingredients, which could drive the development of low-sugar and low-calorie products in the sugar substitute market [7] - The Ministry of Agriculture emphasized the need to support the dairy industry, which is showing signs of stabilization and recovery due to various supportive measures [7] - Factors such as potential production decreases due to heat stress on dairy cows and increased consumption of cold drinks are expected to positively impact the dairy market in the upcoming months [7]

Industry Overview - The approval of D-alloheptulose as a new food ingredient aligns with the trend of innovation and upgrading in China's sugar substitute industry, indicating a potential for rapid market penetration in beverages, baking, and confectionery sectors [1][3] - The global market for D-alloheptulose is projected to reach $147.7 million by 2024, with the U.S. market accounting for 30% and an expected compound annual growth rate (CAGR) exceeding 14% from 2025 to 2034 [1] Company Developments - Baolingbao has been involved in the research and development of D-alloheptulose for nearly 10 years and plans to complete a technical transformation project in 2024 with an annual production capacity exceeding 5,000 tons [2] - Shandong Sanyuan Biotechnology has an existing annual production capacity of 10,000 tons of D-alloheptulose and is expanding with a second production line of the same capacity [2] - Jinhe Industrial has an annual production capacity of 1,000 tons of D-alloheptulose, while Shandong Bailong Chuangyuan has recently commenced production of its D-alloheptulose products [2]

Summary of Key Points from the Conference Call Industry Overview - The approval of allulose as a new food ingredient expands its application in the food sector, particularly in weight loss and diabetes-related products, and allows for food thermal processing, although production methods have specific strain and donor limitations [1][4][16]. Company Insights COFCO Technology - COFCO Technology has developed allulose production technology using corn starch and has received approval for related enzyme preparations, advancing the construction of a production line with a capacity of 10,000 tons. Expected net profits for 2025-2027 are projected at 100 million, 160 million, and 230 million yuan respectively, with a year-on-year growth rate of approximately 300% this year [1][5]. Bailingbao - Bailingbao is a leading company in functional metabolic products, with a production capacity exceeding 5,000 tons and plans to expand to 30,000 tons by 2026. The company is primarily focused on exports [1][7]. Bailing Chuangyuan - Bailing Chuangyuan is the first company in China to achieve industrial-scale production and revenue from allulose, with a projected revenue of 156 million yuan in 2024 and a gross margin of 19%. The company plans to expand capacity in Thailand, primarily for export [1][6][17]. Jinhui Industrial - Jinhui Industrial is a leader in the sugar substitute industry, with a leading global market share in sucralose and acesulfame. The company is actively developing allulose and offers blended sweetness solutions [3][13]. Jindawei - Jindawei is constructing a 30,000-ton allulose project, benefiting from the approval of allulose as a food additive. The company has also acquired the US brand RX Sugar to expand its portfolio [22]. Market Dynamics - Allulose is viewed as a potential substitute for sucrose, with a sweetness level of 70% compared to sucrose but only 1/10th the calories. It has health benefits such as vascular softening and blood sugar regulation, making it suitable for weight loss and diabetes applications [2][16]. - The global sugar substitute market is still in its early stages, with only about 10% of global food consumption utilizing sugar substitutes. The market for sugar substitutes is expected to grow significantly [9]. Competitive Landscape - Allulose's approval is a significant event for the sugar substitute industry, marking a new phase of development. Companies with technological and production capacity reserves, such as Bailing Chuangyuan, Bailingbao, and COFCO Technology, are expected to have favorable market prospects [8][16]. - The competitive advantage of allulose includes its low caloric content, low glycemic index, and ability to participate in the Maillard reaction, which enhances its application in baked goods [12][16]. Financial Projections - Bailing Chuangyuan's profit growth exceeded expectations at 52% in Q1 2025, with projected annual revenue and profit growth rates of over 35% and 43% respectively [3][19]. - COFCO Technology's stock price is worth monitoring, with a target price of 6.8 yuan, reflecting a projected year-on-year growth of approximately 300% [1][8]. Conclusion - The approval of allulose as a new food ingredient is expected to stimulate capacity release and expand market opportunities for companies with established production capabilities. The overall outlook for the sugar substitute industry remains positive, with significant growth potential in various food applications [1][8][16].

Core Viewpoint - The approval of D-allulose as a new sugar substitute in China marks a significant development in the low-calorie sweetener market, indicating growth potential for the industry and related companies [2][3]. Industry Overview - The sugar substitute market in China reached a scale of 1.8 billion yuan in 2023, with projections to exceed 3.3 billion yuan by 2028 [3]. - The increasing consumer demand for healthier diets and reduced sugar intake is driving the growth of the sugar substitute market, with 44% of respondents indicating a greater focus on sugar and fat control [3]. - The global market for allulose is projected to grow from $237 million in 2023 to $423 million by 2030, with a compound annual growth rate of 7.7% [4]. Company Developments - Several companies have already positioned themselves in the allulose market, with production capacities primarily aimed at overseas sales prior to the recent approval for domestic use [6]. - Baolong Chuangyuan has a 15,000-ton crystalline sugar project set to commence production in May 2024 [6]. - Bailingbao plans to start a 20,000-ton allulose expansion project by March 2025, with an expected annual capacity of approximately 30,000 tons by 2026 [6]. - Sanyuan Biological has a 10,000-ton allulose production line that is operating well, with plans for a second line [6]. - Huakang Co. is collaborating with Jiangnan University to develop efficient green production methods for allulose, with a planned capacity of 40,000 tons per year [6]. Stock Performance - As of July 2, 2023, sugar substitute concept stocks have seen significant gains, with an average increase of over 24% this year, outperforming the Shanghai Composite Index [7]. - Notable performers include Baolong Chuangyuan and Bailingbao, both of which have seen stock prices surge [7]. - Five sugar substitute concept stocks reported net profits exceeding 100 million yuan in Q1 2023, including Meihua Biological and Xinghuo Technology [7]. - Seven sugar substitute concept stocks have rolling price-to-earnings ratios below 30, indicating potential investment opportunities [7].

Group 1 - The State Council Vice Premier Zhang Guoqing emphasizes the need to promote new industrialization and develop new productive forces tailored to local conditions, focusing on high-quality economic development in the manufacturing sector [1] - The China Securities Regulatory Commission (CSRC) is committed to implementing key measures for the autonomous opening of the capital market, aiming to enhance the attractiveness and competitiveness of the A-share market [1][2] - Guangzhou's housing provident fund management center proposes a policy for converting commercial loans to public loans, with specific thresholds for the personal housing loan rate [2] Group 2 - In June 2025, A-share new account openings reached 1.65 million, a year-on-year increase of 53%, with a total of 12.6 million new accounts opened in the first half of the year [3] - Chinese beverage brands like Mixue Ice City are gaining popularity among foreign consumers, marking a shift from merely replicating Western brands to establishing strong Chinese brands globally [4][5] - The marine economy sector is experiencing significant growth, with Chinese shipyards securing 168 offshore engineering orders worth nearly $23.6 billion since early 2024, capturing two-thirds of the global market share [6] Group 3 - The steel sector has seen a notable surge, with stocks like Chongqing Steel rising over 120%, driven by supportive real estate policies and infrastructure investment [7] - The "Big and Beautiful" bill in the U.S. has caused volatility in the cryptocurrency market, with over 100,000 liquidations reported, indicating investor concerns over fiscal deficits [11] - The new sugar substitute D-allohexose is gaining traction, with a projected market size growth from $23.7 million in 2023 to $42.3 million by 2030, indicating a strong investment opportunity in the sugar substitute sector [13]

Group 1: Industry Overview - The sugar substitute industry is experiencing positive developments, with the sugar substitute concept stocks showing strong performance, particularly in the A-share market, where the market capitalization of Baolingbao approaches 5 billion yuan [1] - The market size of sugar substitutes in China reached 1.8 billion yuan in 2023, with projections to exceed 3.3 billion yuan by 2028, driven by increasing consumer demand for healthier diets and reduced sugar intake [4] Group 2: Company Developments - Baolingbao, a key player in the sugar substitute market, reported a net profit of 50 million yuan in Q1, representing a year-on-year increase of 117.35% [1] - The company is expanding its production capacity for D-alulose, with plans to start a 20,000-ton annual production project by March 2025, aiming for a total capacity of approximately 30,000 tons by 2026 [2] - Other companies like Bailing Chuangyuan and Sanyuan Biological are also increasing their production capacities for D-alulose, with Bailing Chuangyuan's project set to commence in May 2024 [2][3] Group 3: Market Trends - D-alulose, a rare sugar with 70% of the sweetness of sucrose but only 0.3% of its calories, is gaining traction in the market due to its high sweetness, low calories, and safety [5] - The global market for D-alulose was valued at approximately 237 million USD in 2023, with a compound annual growth rate (CAGR) of 7.7%, expected to reach 423 million USD by 2030 [5] Group 4: Stock Performance - Sugar substitute concept stocks have shown strong performance this year, with an average increase of 20.51%, significantly outperforming the Shanghai Composite Index [6] - Several sugar substitute stocks, including Baolingbao and Bailing Chuangyuan, have seen cumulative increases exceeding 40% [6] - As of July 2, 2023, six sugar substitute concept stocks reported net profits exceeding 100 million yuan in Q1, indicating robust financial performance [6]

Group 1 - The announcement by the National Health Commission regarding the approval of D-Allulose and 20 other "new food" safety assessment materials has led to a surge in the sugar substitute sector, with companies like Baolingbao and Bailong Chuangyuan hitting the daily limit increase [1][2] - D-Allulose is a natural low-calorie sweetener with a sweetness level about 70% that of sucrose, but with only one-tenth the calories, making it a promising alternative to sugar due to its various health benefits [2][3] - The global market for D-Allulose is projected to reach approximately $200 million in 2024 and $500 million by 2030, indicating significant growth potential [2] Group 2 - The approval of D-Allulose in China is expected to reshape the supply chain dynamics, as the market has previously relied heavily on exports, with D-Allulose only being approved in 13 countries including the US and Japan [3][4] - Companies involved in the sugar substitute sector are actively expanding their production capacities, with Baolingbao planning to increase its annual production capacity to over 20,000 tons by 2025, and Jinhe Industrial already having a capacity of 10,000 tons [4][5] - The production of D-Allulose is complex and costly, but companies like Jinhe Industrial are utilizing advanced enzyme technology to reduce production costs and enhance efficiency [4][5]

Market Overview - A-shares experienced collective fluctuations on July 2, with the ChiNext index leading the decline [1] - The marine economy concept stocks surged, with nearly 20 stocks including ShenKai Co., Ltd. and Giant Rope achieving the daily limit [1] - The photovoltaic concept stocks rebounded, with stocks like Yamaton hitting the daily limit [1] - The sugar substitute concept stocks were active, with Baolingbao and Bailong Chuangyuan also reaching the daily limit [1] - The multi-financial sector declined, with Aijian Group hitting the daily limit down [1] - Semiconductor concept stocks collectively adjusted, with stocks like Taiji Co., Ltd. dropping over 5% [1] - The total trading volume in the Shanghai and Shenzhen markets was 849.7 billion, a decrease of 110.9 billion from the previous trading day [1] Sector Performance - The top-performing sectors included aquaculture, photovoltaic equipment, tourism and hotels, combustible ice, marine engineering equipment, and prepared dishes [2] - The sectors with the largest declines included components, semiconductors, multi-financial, storage chips, Huawei HiSilicon, and CPO [2] Institutional Insights - Guotai Junan Securities highlighted that solid-state batteries possess high energy density and safety, meeting the needs of various fields, with the industry moving towards rapid commercialization [3] - Zhongtai Securities noted that the beverage sector maintained leading growth in the fast-moving consumer goods category, showing resilience in demand despite price pressures [3] - CITIC Securities suggested that embracing innovation and internationalization, along with reforms in marketing models, will be key strategies for the second half of the year, particularly in the innovative drug sector [3] Regulatory Developments - The National Internet Information Office launched a campaign to address online misinformation affecting enterprises, emphasizing the need for stricter management of enterprise-related information [4] - The Longhua District government in Shenzhen issued a three-year action plan to promote local companies listed on the Hong Kong Stock Exchange to also list on the Shenzhen Stock Exchange, enhancing cross-border financial services [5]

Market Overview - The market experienced a turbulent adjustment in the morning session, with the ChiNext Index leading the decline, down 0.84% [1] - The total trading volume in the Shanghai and Shenzhen markets was 849.7 billion, a decrease of 110.9 billion compared to the previous trading day [1] Sector Performance - Ocean economy concept stocks surged collectively, with over 10 stocks, including Jili Rigging, hitting the daily limit [1] - Solar energy concept stocks showed a rebound, with stocks like Yamaton also reaching the daily limit [1] - Sugar substitute concept stocks were active, with Baolingbao hitting the daily limit [1] - In contrast, semiconductor concept stocks faced a collective adjustment, with multiple stocks, including Taiji Co., dropping over 5% [1] Index Performance - By the end of the session, the Shanghai Composite Index fell by 0.04%, the Shenzhen Component Index decreased by 0.42%, and the ChiNext Index dropped by 0.84% [1][2]