- 2H26 results exceeded our expectations, with revenue up 44.3% YoY to RMB386.8mn and net income increased 29.9% YoY to RMB45.4mn, driven by higher sales volume in both the fresh sweet potato and processed products segments. FY26 revenue/PATMI were at 104%/123% of our forecasts.
- Earnings from the fresh sweet potato segment doubled, driven by a c.30% YoY surge in sales volume, while processed products grew 12.5% YoY, supported by portfolio expansions including sweet potato chips and steamed products. Overall gross margin declined by 330 bps to 31.2% due to margin compression in the fresh segment.
- We maintain our BUY recommendation and raise our target price to S$0.06 as we roll into the new financial year. We raise our FY27e revenue and net profit forecasts by 23% and 29%, respectively, and expect earnings to grow 24% YoY. Growth will be driven by the continued expansion of Zixin’s white-label ODM business, supported by customer additions across major Chinese snack brands, supermarket private-label brands, and international markets. Meanwhile, demand for fresh sweet potatoes is expected to remain robust, supported by increasing health-conscious consumption and strong demand for premium varieties such as Hong Yao and Black Gold, which offer quality comparable to Japanese sweet potatoes at a more competitive price.
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