Core Viewpoint - Andy Su has demonstrated strong revenue and profit growth in Q1 2025, driven by robust demand for its liquid methionine products and innovative service offerings [1][2]. Financial Performance - The company's revenue reached 4.299 billion yuan, a year-on-year increase of 22.98% - Net profit attributable to shareholders was 465 million yuan, up 67.85% year-on-year - Cash flow from operating activities amounted to 943 million yuan, reflecting a 47.11% increase year-on-year [1]. Business Operations - Andy Su is the only subsidiary of Sinochem Group focused on animal nutrition, with key products including methionine, specialty products, and vitamins [1]. - The company has achieved double-digit growth in liquid methionine over the past two years in the global market [1]. - Andy Su has built an integrated advantage in liquid methionine through a combination of process, equipment, and service innovations [2]. Market Dynamics - Strong downstream demand is expected to keep methionine prices stable in Q3, despite potential downward pressure from new domestic production capacity in the medium to long term [2]. - The company is currently the only supplier in China providing high-quality liquid feeding equipment for methionine [2]. Innovation and R&D - Innovation is a key competitive advantage for Andy Su, with ongoing research in advanced technologies, including synthetic biology for methionine production [3]. - The company is exploring new collaborative models within the group and seeking suitable acquisition targets to enhance its specialty product offerings [3]. Shareholder Engagement - Andy Su has implemented various market value management measures, including increasing the minimum dividend payout ratio to 40% and conducting regular communication with investors [3].

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].