Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1]. Core Views - The company has established a strong market position in the production of Arachidonic Acid (ARA) and Docosahexaenoic Acid (DHA), with significant growth potential driven by domestic and international demand [8][13]. - The company is expected to benefit from the expiration of patents held by competitors, allowing for increased market share and revenue growth [8][47]. - The financial forecasts indicate robust revenue and profit growth, with a projected revenue increase from 7.00 billion yuan in 2025 to 9.43 billion yuan in 2027, and net profit rising from 1.76 billion yuan to 2.55 billion yuan in the same period [1][8]. Summary by Sections 1. Company Overview - Founded in 2004, the company has pioneered the industrialization of ARA, DHA, and other products, with applications in human nutrition, animal nutrition, and personal care [8][13]. - The company has established long-term partnerships with global nutrition and dairy companies, exporting products to over 30 countries [8][13]. 2. Market Position and Growth - The company holds a market share of 13.5% globally and over 50% domestically in the ARA sector as of 2021, with expectations for further growth due to patent expirations of competitors [47]. - The domestic ARA market has shown a CAGR of 9.85% from 2015 to 2021, driven by rising disposable incomes and regulatory changes [46]. 3. Financial Performance - Revenue is projected to grow from 443.80 million yuan in 2023 to 942.93 million yuan by 2027, with a CAGR of 25.19% from 2023 to 2024 [1]. - Net profit is expected to increase from 91.37 million yuan in 2023 to 255.02 million yuan by 2027, reflecting a strong CAGR of 41.95% in 2024 [1]. 4. Product Segmentation - ARA is projected to account for approximately 70.2% of revenue in 2024, while DHA is expected to contribute 19.6% [15][26]. - The company is diversifying its product offerings, including SA and β-carotene, to enhance its market presence [15][13]. 5. Strategic Initiatives - The company is focusing on expanding its international market presence, particularly in light of the expiration of patents held by competitors, which will allow for competitive pricing and increased market penetration [8][47]. - The strategic direction emphasizes a dual focus on human nutrition and animal nutrition, with ongoing investments in product development and market expansion [8][13].