Core Viewpoint - Longkun Technology (301305.SZ) reported strong financial performance for Q3 2025, with significant year-on-year growth in both revenue and net profit, driven primarily by the sustainable aviation fuel (SAF) market and rising prices of used cooking oil (UCO) [1][2][3] Financial Performance - For the first three quarters of 2025, Longkun Technology achieved a revenue of 1.39 billion yuan, a year-on-year increase of 0.2%, and a net profit attributable to shareholders of 250 million yuan, up 28.9% [1] - In Q3 2025, the company reported a revenue of 530 million yuan, reflecting an 8.3% year-on-year growth, and a net profit of 100 million yuan, which is a 39.6% increase compared to the same period last year [1] - The company's Q3 performance set historical highs for both quarterly and year-to-date results, significantly exceeding market expectations [1] Market Dynamics - The demand for SAF has surged due to regulatory policies mandating blending of aviation fuel in various countries, leading to increased competition for raw materials [2] - As of October 2025, the price of UCO abroad reached $1,116 per ton, a 12% increase since the beginning of the year, while domestic prices for waste cooking oil have risen to 6,850 yuan per ton, a 19% increase [2] Business Operations - Longkun Technology is a key player in the UCO market, leveraging its comprehensive waste oil collection and processing system to enhance profitability [3][4] - Approximately 55% of the company's revenue and 52% of its gross profit in the first half of 2025 came from bioenergy products, with rising UCO prices positively impacting profit margins [3] - The company operates 35 biomass resource regeneration projects, with 21 already in operation, and holds the leading market share in major cities like Beijing, Shenzhen, and Guangzhou [4] Strategic Initiatives - In 2023, Longkun Technology initiated a significant strategic transformation towards biotechnology, focusing on synthetic biological manufacturing [5] - The company’s subsidiary, Longjian Biotechnology, has received approval for its human milk oligosaccharides (HMOs) product, positioning it as the first domestic enterprise to achieve this milestone [5] - The HMO project is expected to scale production by 2026, tapping into the growing market for high-value nutritional components as consumer awareness of "precision nutrition" increases [5]