Core Viewpoint - The company, Hubei Yizhi Konjac Biotechnology Co., Ltd. (stock code: 920273.BJ), emphasizes its focus on B-end business, particularly in konjac gum and downstream konjac products, while acknowledging the limited scale of its C-end self-owned brand channels and the need for long-term investment in brand development [1][1][1] Group 1 - The company is currently prioritizing its B-end business, concentrating resources on konjac gum and related products [1] - The C-end self-owned brand channels are few, and the revenue generated from them is limited [1] - Long-term investment and sustained efforts are required for C-end brand development [1]

Summary of the Conference Call for Yizhi Konjac Company Overview - **Company**: Yizhi Konjac - **Industry**: Konjac products and health food Key Financial Metrics - **Revenue**: - Q3 2025 revenue reached 210 million CNY, a year-on-year increase of 20.46% [2][3] - Year-to-date revenue for the first three quarters of 2025 was 569 million CNY, a year-on-year increase of 30.49% [3] - **Net Profit**: - Q3 2025 net profit was 21.42 million CNY, a year-on-year decrease of 25.60% [2][3] - Year-to-date net profit for the first three quarters was 62.34 million CNY, a year-on-year increase of 0.46% [3] - **Cash Flow**: - Operating cash flow for the first three quarters was 219 million CNY, primarily due to increased sales collections and reduced payment for goods [2][4] Strategic Focus - **Market Focus**: - The company continues to prioritize the B-end market, focusing on konjac gum and downstream products, with limited investment in the C-end market [2][5] - **Growth Drivers**: - Major growth is attributed to konjac food and konjac gum, with konjac food showing faster growth [2][5] Industry Dynamics - **Price Trends**: - The industry is experiencing a downward price trend, although raw material supply has decreased due to increased planting area and adverse weather conditions [2][6] - Fresh konjac prices are approximately 6,000 CNY per ton, with large users holding significant inventory, leading to uncertain price trends [2][6] - **Market Demand**: - Third-quarter market demand signals were weak, with expectations for a slight decline in prices while remaining at a relatively high level [2][6] Production Capacity and Product Lines - **Capacity Increases**: - Konjac powder capacity has increased by over 20%, and konjac product capacity has increased by over 35% [2][8] - **Product Performance**: - Key products include konjac gum and tofu powder, with significant growth in gold balls and OEM business [2][8] - **Sales Growth**: - The konjac pearl product line saw over 50% growth in the first half of 2025, with 50% of the 35,000 tons capacity released [2][14] Challenges and Risks - **Raw Material Costs**: - Rising raw material prices have significantly impacted gross margins, with costs increasing by 33% compared to a 30% revenue increase [2][10] - **Inventory Risks**: - Inventory impairment risks are considered manageable, with no significant issues expected in the near term [2][26] Customer Development and Market Expansion - **Customer Base**: - The company is developing relationships with chain restaurants and expanding into new product categories to meet consumer demands [2][16][23] - **International Sales**: - International sales accounted for 27%-30% of total sales, with efforts to expand into Southeast Asia and Europe [2][17] Future Outlook - **Revenue and Profit Growth**: - The company aims for stable growth by optimizing resource allocation and introducing new product categories [2][30] - **Long-term Strategy**: - Focus on B-end business while gradually exploring the C-end market and health food trends [2][28][29]

Summary of the Conference Call Company and Industry Overview - The company operates in the konjac product industry, focusing on konjac food and related products, with a significant emphasis on tea drink additives, instant snacks, and ingredients [2][11]. Key Financial Performance - In the first half of 2025, the company achieved a revenue of 359 million yuan, representing a year-on-year growth of 37.17% [4]. - The net profit attributable to shareholders was 40.92 million yuan, up 23.01% year-on-year, while the net profit after deducting non-recurring items was 34.93 million yuan, reflecting an 18.71% increase [4]. - The operating cash flow reached 126 million yuan, marking a 36.93% growth [4]. Revenue Growth Drivers - Revenue growth of over 35% in the first half of 2025 was primarily driven by both volume and price increases, with price hikes contributing significantly [2][11]. - The konjac food segment saw a remarkable growth of 58%, with tea drink additives accounting for approximately 55% of sales [13]. Raw Material Price Trends - Konjac raw material prices surged by about 80% since June 2024 due to rapid growth in downstream demand, particularly from snack brands like Weidong and tea chains like Mixue Ice City [6][7]. - This price increase is expected to remain high until around October 2025, when new konjac crops are harvested [7]. Supply Chain Management - The company collaborates with rural cooperatives and primary processing plants to secure stable raw material supplies, avoiding direct dealings with individual farmers [9][10]. - The company has a stock of over 300 million yuan in raw materials, semi-finished products, and packaging, ensuring a steady supply chain [12]. Export and International Market - Exports to the U.S. have been hindered due to international circumstances and tariffs, but growth has been maintained in Southeast Asia, Europe, and South America [14]. - The company has established a dedicated department to explore foreign ingredient markets, with foreign trade gross margins slightly higher than domestic ones [14]. Product Development and Market Strategy - The company aims to increase its global market share in konjac powder and konjac gum from approximately 12% to 40%-50% in the future [3][29]. - The konjac beauty business has been discontinued due to consistent losses, with resources redirected towards konjac food products [5][21]. Challenges and Future Outlook - The konjac food business faces pressure with a gross margin of less than 20%, necessitating scale expansion to improve profitability [22]. - The company is optimistic about the future of konjac products, particularly konjac balls, which have seen increased demand due to the rise of delivery services [15][19]. Seasonal Factors and Market Predictions - The company experiences seasonal revenue fluctuations, primarily concentrated in the third and fourth quarters [31]. - Despite a strong performance in the first half of 2025, there is uncertainty regarding the full-year revenue growth due to intense competition and the consumer market's recovery [31]. Conclusion - The company is strategically positioned in the konjac industry, focusing on product innovation and market expansion while navigating challenges related to raw material costs and international trade dynamics [25][30].

Core Viewpoint - The Yizhou Station in Jiading District has introduced a new batch of specialty products from Wuding County, Chuxiong Yi Autonomous Prefecture, Yunnan Province, showcasing rich Yunnan culture and craftsmanship [1][3]. Group 1: Cultural Heritage and Economic Impact - Yi embroidery, a national intangible cultural heritage with a history of over 1,700 years, faces market expansion challenges due to its complex craftsmanship and high prices [3]. - The collaboration between Jiading and Wuding has facilitated the development of Yi embroidery, with local artisans, many of whom are mothers, creating handicrafts to increase family income and achieve personal value [3]. - The Yizhou Station not only promotes the revival of intangible cultural heritage but also boosts local employment, achieving a win-win situation for cultural and economic benefits [3]. Group 2: Product Offerings and Future Plans - The Yizhou Station features various Yunnan specialties, including Wuding chicken, known for its tender and firm meat, and rose hibiscus tea, which has a vibrant color and sweet-sour taste [3]. - The station plans to introduce more Yunnan特色 products, such as ready-to-eat Wuding chicken series and flower cake series, highlighting unique flavors from Yunnan [3].

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]

Industry Overview - The global seed industry has a high concentration, with a CR5 of 52% in 2021, while China's seed industry CR5 is only 17%, indicating significant room for improvement[4] - Major grain prices in China have shown a slight increase, with corn prices up by 11.9%, while soybean prices decreased by 0.7%, and wheat prices increased by 2.9% as of May 23, 2025[4] Genetically Modified Organisms (GMOs) - Three batches of genetically modified corn varieties have been approved for commercialization, totaling 161 varieties, with significant advantages for leading companies[4][16] - The domestic market for genetically modified crops is expected to accelerate, with companies like Kangnong Seed focusing on high-yield and resilient hybrid corn varieties[19] Company Performance - Kangnong Seed's revenue for 2024 is projected to be 337 million yuan, representing a year-over-year increase of 16.80%, with a net profit of approximately 82.60 million yuan and gross/net profit margins of 35.79% and 24.72%, respectively[30] - The company's three-year CAGR for revenue and net profit from 2021 to 2024 is 33.45% and 24.53%, respectively, indicating strong growth potential[30] Market Trends - The median price-to-earnings (P/E) ratio for the North Exchange consumer service sector decreased from 57.9X to 53.2X, reflecting a broader market trend[34] - The total market capitalization of the North Exchange consumer service sector fell from 119.36 billion yuan to 116.79 billion yuan during the week of May 19 to May 23, 2025[38] Risk Factors - Potential risks include macroeconomic fluctuations, market competition, and statistical data inaccuracies, which could impact the overall market performance[52]

Group 1: Agricultural Consumption Market - From May 2025, 56 institutions have conducted research on Yizhi Konjac, with 33 being overseas institutions. The company anticipates growth in konjac powder driven by three main scenarios: increased demand for konjac-based snacks, expansion in the konjac tea ingredient market, and deeper applications in food processing [1] - Yizhi Konjac's production capacity includes 10,000 tons for konjac snacks, 15,000 tons for konjac ingredients, and 3.5 tons for konjac balls. The company is also expanding its production capacity to meet market demand [1] Group 2: Seed Industry Insights - The corn seed industry in China is currently facing an oversupply, presenting both challenges and opportunities for seed companies. The government emphasizes food security, which supports the healthy development of the seed industry. Companies with superior varieties and marketing capabilities are expected to gain market share and improve profitability [2] - Qiule Seed Company reported a decline in performance in Q1 2025 due to intense competition in the corn seed market. The company plans to optimize its product structure and expand market promotion areas to increase market share [2] Group 3: Pharmaceutical Product Promotion - Sanyuan Gene indicated that 2024 is a critical year for centralized procurement, with a significant acceleration in hospital access expected in the second half of the year. The company aims to add over 1,100 new medical terminals and reach a total of over 6,000 hospitals [3] - Nothland announced that its NL003 ulcer drug submitted for registration in July 2024 received a supplementary data request from the regulatory authority, and the company is working on commercializing the product by establishing a sales division and conducting market research [3] Group 4: New Product Launch - Jinbo Bio is actively promoting its injectable recombinant type III humanized collagen gel product and has launched the HiveCOL "honeycomb" collagen tissue network gel technology at the 78th Cannes Film Festival [4]

Group 1: Investor Relations Activities - The company conducted investor relations activities from April 29 to April 30, 2025, at the company meeting room and online [3] - Participants included various investment firms and securities companies, such as Huatai Securities and Janchor Partners Limited [4] Group 2: Company Performance - The company reported strong performance in Q1, driven by health consumption trends, policy support, and expanding market demand [4] - The konjac food and beverage segments experienced rapid growth [4] Group 3: Business Segments - The konjac ingredient business is a new To B segment, focusing on supplying large chain restaurants [5] - Cost advantages have been achieved through technological innovations in production [5] Group 4: Export and International Market - Foreign trade revenue has increased compared to the same period last year, with a focus on expanding into European and South American markets [6] - Key export products include konjac gum, beauty products, and ingredients [6] Group 5: Pricing and Supply - The growth of konjac planting area is unlikely to be explosive due to specific growing conditions [7] - Konjac prices will depend on raw material supply and weather conditions in 2025 [7] Group 6: Brand Development - The company's self-owned brand business is primarily promoted through e-commerce platforms, with a significant share from online sales [8] - Future plans include expanding both domestic and international markets through an integrated online and offline sales strategy [9]