101574569 : Facts
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### **Positive Share Price Catalysts**
#### 1. **Strong Financial Performance (FY25)**
* **Revenue up 33.1% YoY** to RMB 424.7 million.
* **Net profit surged 219.9%** YoY to RMB 42.7 million.
* **EPS increased 183.5%** to RMB 2.75 cents from 0.97 cents.
* Improved **gross margin** to 34.0% (+2.0 pp YoY).
#### 2. **Product Segment Growth**
* **Sweet potato processed products** revenue grew 24.1%.
* **Fresh sweet potatoes** revenue jumped 72.1% YoY.
* **Seedlings** revenue more than doubled (116.9%).
#### 3. **Expansion & Innovation**
* Completion of **high-tech manufacturing facility**; began commercialisation of new, higher-margin processed foods.
* Targets functional food production in 1H FY26.
* Expansion of **seedling cultivation area** from 100 mu to 200 mu in FY25; aiming for 300 mu in FY26.
#### 4. **Biotech & Circular Economy Model**
* Probiotic-infused **fermented sweet potato feedstock** commercialisation.
* Alignment with China’s rural revitalisation and sustainability plans (long-term policy support).
* Acquisition of a **patented poultry feed formula** could support entry into animal feed sector.
#### 5. **Macro Tailwinds**
* **China’s 10-year agri master plan** supports food security and agritech.
* Shift away from soymeal in feed creates market opportunity for sweet potato-based alternatives.
* Global sweet potato fries market projected to grow at **5% CAGR**, with China growing even faster at 5.7%.
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### **Potential Risks / Negative Impacts**
#### 1. **Thin Net Cash Increase**
* Net cash only rose 10.9% YoY, despite strong earnings.
* **Net cash per share fell** 4.2% YoY to RMB 6.8 cents, likely due to share base expansion.
#### 2. **Dilution Risk**
* Share count increased significantly from 1.38B (FY24) to 1.59B (FY25), likely due to Rights Cum Warrants Issue in June 2024.
* EPS growth partially offset by higher share base.
#### 3. **High Capex and Execution Risk**
* Ongoing expansion (seedlings, fermentation, smart warehousing) may pressure cash flows.
* Commercial success of new products and scaling of R\&D initiatives are **not guaranteed**.
#### 4. **Market Volatility & Inflation**
* External macro factors such as rising costs of feed, fuel, and fertilizer may affect margins.
* Any delay or inefficiency in execution of growth strategies could reverse sentiment.