Core Viewpoint - Huakang Co., Ltd. has decided to terminate the planned acquisition of 100% equity in Yuxin Sugar Alcohol due to significant changes in the market environment since the initial planning phase, despite the transaction being in progress for over a year [2][4]. Group 1: Transaction Details - The company intended to acquire Yuxin Sugar Alcohol for a total price of 1.098 billion yuan through a combination of issuing shares and cash payments [2]. - The assessment value of Yuxin Sugar Alcohol's 100% equity as of December 31, 2024, was 1.101 billion yuan, reflecting an increase of 556 million yuan and an appreciation rate of 102.01% [2][3]. Group 2: Company Performance - Huakang Co., Ltd. has faced a situation of increasing revenue without corresponding profit growth, with a revenue increase of 0.93% to 2.808 billion yuan in 2024, while net profit decreased by 27.72% to 268 million yuan [4]. - In the first three quarters of 2025, the company reported a revenue of 2.959 billion yuan, a year-on-year increase of 40.52%, but net profit declined by 9.91% to 168 million yuan [4]. Group 3: Industry Context - The company and Yuxin Sugar Alcohol are recognized as leading firms in the production and technology of xylitol, with the acquisition aimed at enhancing market competitiveness and operational efficiency [4]. - The industry is currently facing challenges, including a major customer of Yuxin Sugar Alcohol experiencing a debt crisis, which may impact the market dynamics [4].

Core Viewpoint - The article discusses tax incentives aimed at promoting the development of rural specialty industries and the circular economy in agriculture, specifically through a VAT refund policy for certain resource utilization products made from agricultural by-products [2][7]. Summary by Sections Tax Incentives for Resource Utilization - A VAT refund of 90% is applicable for products made from specific agricultural by-products such as straw, corn cobs, and other residual materials [2]. - Eligible products include fiberboard, particleboard, biochar, activated carbon, and various sugars and alcohols derived from these materials [2]. Conditions for Enjoying Tax Benefits - Taxpayers must obtain VAT invoices from sellers when purchasing recycled resources domestically, or appropriate customs documentation when importing [3][4]. - A detailed record of recycled resource purchases must be maintained, including supplier information and transaction details [5]. - The products sold must not fall under categories deemed as eliminated or restricted by relevant regulatory bodies [5]. Compliance and Restrictions - Taxpayers must not have received administrative penalties for environmental violations or tax law violations in the six months prior to applying for the VAT refund [6]. - The raw materials used must consist of at least 95% of the specified resources to qualify for the tax incentives [7].

Core Insights - The article highlights the significant growth of the functional sugar industry in Yucheng, with a focus on its export performance and market dominance in both domestic and global contexts [1][2][3] Group 1: Industry Performance - In the first quarter, Yucheng's total import and export value reached 1.406 billion yuan, with exports amounting to 1.373 billion yuan, marking a year-on-year increase of 32.3% [1] - The functional sugar sector is a key driver of Yucheng's exports, achieving a product export value of 470 million yuan, which represents a remarkable year-on-year growth of 80.8% [1] - Yucheng produces over 35% of the global functional sugar market and more than 70% of the domestic market share, establishing itself as the largest and most diverse functional sugar manufacturing base in China [2][3] Group 2: Technological Advancements - Yucheng has developed a comprehensive functional sugar industry chain that includes research and development, production, and sales, leveraging local resources such as corn and corn husks [3][4] - The industry utilizes advanced biotechnology to convert corn and its by-products into low-calorie functional sugars, which are increasingly used in food, beverage, and pharmaceutical sectors [3][4] - Companies like Bailong Chuangyuan have successfully developed D-Allulose, a sugar substitute, overcoming previous technological barriers that limited domestic production [6][7] Group 3: Market Expansion - Yucheng's functional sugar products are gaining traction in international markets, with companies like Bailong Chuangyuan exporting to over 60 countries, including the US, Canada, Japan, and South Korea [10] - The global market for D-Allulose is projected to grow from approximately $200 million in 2024 to $500 million by 2030, indicating significant market potential for Yucheng's products [6][7] - Yucheng's government is actively supporting the industry by facilitating international trade opportunities and encouraging companies to participate in global supply chains [11][12] Group 4: Future Outlook - The city aims to enhance its functional food industry and transform into a global hub for functional sugar production, focusing on high-end, intelligent, and sustainable manufacturing practices [12] - Yucheng is set to continue its strategic initiatives to expand its market presence and improve the international competitiveness of its functional sugar products [12]