Investment Rating - The report does not explicitly state an investment rating for the dietary fiber industry Core Insights - Dietary fiber is recognized as the seventh essential nutrient, crucial for human health, aiding in weight control and the prevention of obesity, cardiovascular diseases, and diabetes. The demand for dietary fiber is expected to rise due to aging populations, increased health awareness, and changing dietary habits, leading to an expanding market size in China, which has become a major consumer region globally [4][5][37] Summary by Sections Industry Definition - Dietary fiber is defined as a carbohydrate polymer that is not digestible by the human small intestine and has health benefits. It is categorized into soluble and insoluble fibers based on solubility and can be derived from plant, animal, microbial, or synthetic sources [5][6][7] Industry Characteristics - The dietary fiber industry is characterized by its wide application across food, beverages, health products, and pharmaceuticals, significant health benefits, and high difficulty in industrial production, creating barriers for new entrants [14][15][16][17] Development History - The dietary fiber industry began in developed countries like the UK, USA, and Japan in the 1960s, with China starting later but rapidly advancing. The industry has grown significantly, with dietary fiber now recognized as an important nutrient for health [18][21][22] Industry Chain Analysis - The dietary fiber industry chain includes upstream raw material sourcing (starch, sugar, glucose), midstream processing into functional products, and downstream applications in food, beverages, and health products. The price fluctuations of raw materials significantly impact the cost and pricing of dietary fiber products [23][24][26] Market Size - The global dietary fiber market reached $514 million in 2023 and is projected to grow to $1 billion by 2030, with a CAGR of 10.03%. China is the largest consumer market, driven by population size and rising health consciousness [37][38][39] Competitive Landscape - The global dietary fiber market is dominated by major players from the USA and Europe, with emerging competition from Japanese and Chinese companies. The competition is influenced by the historical development of the industry in these regions [45][46][48]

Investment Rating - The report maintains an "Outperform" rating for the company [1] Core Insights - The company has shown strong performance with a revenue of 969 million yuan for the first three quarters of 2025, representing an 18% year-over-year increase, and a net profit of 265 million yuan, up 45% year-over-year [6] - The launch of new products, including D-allohexose, and the expansion of production capacity are expected to drive future growth [6] - The company is positioned as a leading player in the health food additives sector, with significant growth potential in soluble dietary fibers and crystalline sugars [6] Financial Data and Profit Forecast - Total revenue projections for 2025 are estimated at 1,716 million yuan, with a year-over-year growth rate of 49% [5] - The net profit forecast for 2025 is 365 million yuan, reflecting a 48.7% increase compared to the previous year [5] - Earnings per share (EPS) for 2025 is projected to be 0.87 yuan, with a price-to-earnings (PE) ratio of 25 [5] Product Development and Market Demand - The company has successfully launched its 30,000-ton soluble dietary fiber project, which includes high-margin resistant dextrin, expected to enhance profitability [6] - The approval of D-allohexose as a new food ingredient is anticipated to increase market demand, particularly in the context of China's health initiatives [6] - The company is expanding its international presence with a new factory in Thailand, aimed at tapping into markets in Europe, Southeast Asia, and the Middle East [6]

Company and Industry Summary Company Overview - The company primarily exports products and is positioned in the customized mid-to-high-end market, which makes it less affected by domestic price competition [2][8] - A 20% tariff is borne by customers, thus having no direct impact on the company's operating performance [2][4] Capacity Expansion Plans - The company plans to add 20,000 tons of capacity in 2025, with completion expected by the end of the year, and partial production starting in 2026 [2][5] - A project in Thailand with a capacity of 49,000 tons is expected to be completed by the end of 2026 and to start production in 2027 [2][5][28] Market Dynamics - The acceptance of functional sugars in the European and American markets is high, particularly for mid-to-high-end products, although certification is strict [2][9] - The Chinese market focuses on cost-effectiveness but is gradually transitioning to high-end products, with a potential lag of 3-5 years compared to Europe and the U.S. [2][9][30] Product Insights - Allulose, a health sweetener, is in the early stages of global market acceptance and has not yet been approved in China, but domestic manufacturers are already incorporating it into their products [2][10] - The current average selling price of allulose is around 25,000 yuan, with a cost reduction of about 10% [2][13] - The market demand for allulose is expected to be no less than that for erythritol, indicating significant potential [2][13] Growth Projections - The resistant dextrin market is growing steadily, with the company achieving over 50% annual growth, limited by capacity [2][15] - The expected production of resistant dextrin in 2024 is projected to be 10,000 to 20,000 tons, doubling from 2023 [2][15] Financial Performance - The company's overall performance in Q2 2025 is expected to be better than Q1, despite a temporary export halt due to tariff policies [3][18] - The gross margin for allulose improved from 24% to 34% in Q1, while resistant dextrin margins range from 50% to 60% for customized products [20] Market Trends and Challenges - The domestic functional sugar market is experiencing slow growth due to consumer acceptance and regulatory approval delays [30] - The company is focusing on international markets for growth, particularly in the U.S., EU, and Japan, where there is significant potential for allulose and resistant dextrin [29][30] Future Outlook - The company maintains an optimistic outlook for Q2 2025 and the full year, expecting to meet performance targets set by the chairman [32] - Investors should pay attention to the approval status of allulose and other products, as national policies support the development of natural health foods and beverages [32]

Investment Rating - The investment rating for the company is "Outperform the Market" [4][11][28] Core Views - The company achieved a net profit attributable to shareholders of 246 million yuan in 2024, representing a year-on-year growth of 27%. In the first quarter of 2025, the net profit reached 81.4 million yuan, up 52% year-on-year [1][13] - The company’s revenue for 2024 was 1.152 billion yuan, a 32.64% increase compared to the previous year. In Q1 2025, revenue was 313 million yuan, growing 24.27% year-on-year [1][13] - The company is experiencing rapid growth in its dietary fiber and health sweetener segments, particularly with the increasing demand for resistant dextrin and polydextrose in the food and beverage industry [2][21] - The company is actively expanding its production capacity through projects such as the "Functional Sugar Drying Expansion Project" and the "Thailand Health Project," which are expected to enhance profitability in the future [3][26] Financial Performance Summary - In 2024, the company’s gross profit margin was 33.65%, an increase of 0.92 percentage points year-on-year, while the net profit margin was 21.33%, a decrease of 0.90 percentage points [1][13] - For Q1 2025, the gross profit margin improved to 39.74%, up 5.99 percentage points year-on-year, and the net profit margin increased to 25.99%, up 4.75 percentage points year-on-year [1][13] - The company’s revenue projections for 2025-2027 are 1.526 billion yuan, 1.829 billion yuan, and 2.140 billion yuan, respectively, with net profits expected to be 346 million yuan, 431 million yuan, and 503 million yuan [12][28] Business Segments Summary - The company’s main business segments include prebiotics, dietary fibers, health sweeteners, and other starch sugars. In 2024, the prebiotic segment generated 322 million yuan in revenue, a 25.43% increase, while the dietary fiber segment saw revenue of 624 million yuan, up 40.42% [2][21] - The health sweetener segment generated 156 million yuan in revenue, a 13.85% increase, with the contribution of allulose rising to 14.12% of total revenue, marking it as a significant source of income [2][21] - In Q1 2025, the prebiotic segment revenue was 85.8 million yuan, up 17.27%, while the dietary fiber segment revenue was 170 million yuan, up 25.40%. The allulose segment revenue surged to 49.8 million yuan, a remarkable increase of 105.31% [2][21] Future Growth Drivers - The company is investing in a new production base in Thailand, which is expected to enhance its brand, technology development, and market expansion capabilities, ultimately improving profitability and competitiveness [4][26] - The ongoing approval process for allulose in China and the steady growth of the overseas market are anticipated to further boost the company’s revenue and market presence [9][27]

Core Viewpoint - The company is focusing on high-value core products such as prebiotics, dietary fibers, and sugar-reducing sweeteners, which are expected to drive future growth and profitability [2][3][4]. Product Focus - The company's core products include prebiotics (oligomaltose, fructooligosaccharides, galactooligosaccharides), dietary fibers (polydextrose, resistant dextrin), and sugar-reducing sweeteners (erythritol, crystalline fructose, allulose) [2]. Gross Margin Improvement - The gross margin for the company's core products increased from 9.74% in 2023 to 15.84% in 2024, driven by optimized product structure, reduced consumption, and lower procurement costs [3][4]. - The gross margins for individual core products are as follows: prebiotics increased from 19.34% to 24.60%, dietary fibers from 12.64% to 18.12%, and sugar-reducing sweeteners from 1.26% to 9.09% [4]. Production Strategy - The company is implementing a "small, refined, and flexible" production model to cater to differentiated market demands, focusing on high-value, small-batch orders [6]. - The flexible production plan aims to enhance responsiveness to market needs and build competitive advantages through customized products [6]. New Product Development - The company is expanding its product line with high-value products such as DHA algae oil, lactulose, and HMOs, with production capacity already established for these new products [8]. - Strategic partnerships have been formed to ensure sales of new products, with ongoing projects in trial production stages [8]. Market Impact of Tariffs - Following the EU's imposition of anti-dumping duties on erythritol, the company has capitalized on being the lowest taxed entity, resulting in a 123% year-on-year increase in erythritol sales revenue in Q1 2025 [8]. Capacity Expansion - The company has been a pioneer in the domestic allulose market, with a production capacity exceeding 5,000 tons set to be expanded to 20,000 tons in the future [9]. Financial Performance - In Q1 2025, the company reported a revenue of 685 million yuan, a 24.23% increase year-on-year, and a net profit of 50.36 million yuan, up 117.35% year-on-year [10].