Policy Tailwinds and Hainan Visibility Reinforce An Increasingly Resilient Sweet Potato Ecosystem<\/strong><\/p>\n\n\n\n On the processing side, Zixin\u2019s first sweet potato powder line is in commissioning and is expected to start generating revenue from March 2026. Based on management guidance from the site visit, we forecast full utilization revenue of about RMB 4.5m per month, or roughly RMB 50m\u201355m per year, with an attractive margin profile given its B2B positioning in beverages, bakery and nutraceutical applications.<\/p>\n\n\n\n Zixin Group Holdings reported total revenue rose 40.8% YoY to RMB 220.6m, driven mainly by processed snacks and functional foods, while net profit more than doubled to RMB 16.1m. Group gross margin normalised to 30.2% from 33.2% as raw sweet potato prices stayed elevated and new capacity ramped but remained broadly in line with management\u2019s 30% target.<\/p>\n\n\n\n Zixin\u2019s 1H FY26 results and our follow-up site visit to Liancheng reinforce the core message from our last update. The group is executing on an integrated sweet potato ecosystem that is increasingly aligned with China\u2019s long-term food security agenda, while management is adding new growth drivers in Hainan and functional foods without sacrificing balance sheet discipline. On the ground we observed a clear step-up in scale and operating discipline at Liancheng versus our last visit. Throughput in washing and grading has increased, the link between processing and feedstock utilisation is tighter, and labour appears more standardised. These observations are consistent with the margin and volume trends seen in the 1H FY26 numbers, where processed products contributed more than 70% of revenue and the group kept gross margin around 30% despite raw material volatility.<\/p>\n\n\n\n We maintain our fundamental view on Zixin and reiterate our OUTPERFORM<\/strong> recommendation. We lower our target price to S$0.048<\/strong> (from S$0.060) following the incorporation of the enlarged share base and the resulting EPS dilution. Our revised target price is derived from a DCF framework using 10% WACC and 2.0% terminal growth and continues to imply meaningful upside from current levels. Despite the lower target price, our conviction in the integrity of our earnings and cash flow forecasts has strengthened, supported by improving operational visibility and clearer execution milestones across the Hainan rural revitalisation project. We see scope for a constructive re-rating as the company demonstrates further evidence of delivery against its integrated circular economy roadmap in the coming quarters.<\/p>\n\n\n\n Favourable policy backdrop.\u00a0 At the policy level, recent No. 1 Central Documents, the Grain Security Law and the 2024\u20132035 Agricultural Plan all point to a long runway of support for staple crops, high standard farmland and seed innovation. Within that framework, potatoes and sweet potatoes have been positioned as flexible \u201cbuffer crops,\u201d with an explicit push since 2015 to treat sweet potatoes and other tubers as staple food and to industrialise potato-based staples including sweet potatoes. We see Zixin\u2019s integrated model in seedlings, cultivation and processing as a direct beneficiary of these structural tailwinds.<\/p>\n","protected":false},"author":17,"featured_media":81749,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","_uag_custom_page_level_css":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[14],"tags":[],"class_list":["post-81748","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-reports"],"aioseo_notices":[],"uagb_featured_image_src":{"full":["https:\/\/www.kgieworld.sg\/researchstg\/wp-content\/uploads\/2025\/11\/Zixin-Group-Holdings-Ltd.-Logo.webp?wsr",1200,1200,false],"thumbnail":["https:\/\/www.kgieworld.sg\/researchstg\/wp-content\/uploads\/2025\/11\/Zixin-Group-Holdings-Ltd.-Logo-150x150.webp?wsr",150,150,true],"medium":["https:\/\/www.kgieworld.sg\/researchstg\/wp-content\/uploads\/2025\/11\/Zixin-Group-Holdings-Ltd.-Logo-300x300.webp?wsr",300,300,true],"medium_large":["https:\/\/www.kgieworld.sg\/researchstg\/wp-content\/uploads\/2025\/11\/Zixin-Group-Holdings-Ltd.-Logo-768x768.webp?wsr",768,768,true],"large":["https:\/\/www.kgieworld.sg\/researchstg\/wp-content\/uploads\/2025\/11\/Zixin-Group-Holdings-Ltd.-Logo-1024x1024.webp?wsr",800,800,true],"1536x1536":["https:\/\/www.kgieworld.sg\/researchstg\/wp-content\/uploads\/2025\/11\/Zixin-Group-Holdings-Ltd.-Logo.webp?wsr",1200,1200,false],"2048x2048":["https:\/\/www.kgieworld.sg\/researchstg\/wp-content\/uploads\/2025\/11\/Zixin-Group-Holdings-Ltd.-Logo.webp?wsr",1200,1200,false]},"uagb_author_info":{"display_name":"Enya Tan","author_link":"https:\/\/www.kgieworld.sg\/researchstg\/author\/enya-tankgi-com\/"},"uagb_comment_info":0,"uagb_excerpt":"Favourable policy backdrop.\u00a0 At the policy level, recent No. 1 Central Documents, the Grain Security Law and the 2024\u20132035 Agricultural Plan all point to a long runway of support for staple crops, high standard farmland and seed innovation. Within that framework, potatoes and sweet potatoes have been positioned as flexible \u201cbuffer crops,\u201d with an explicit…","_links":{"self":[{"href":"https:\/\/www.kgieworld.sg\/researchstg\/wp-json\/wp\/v2\/posts\/81748","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.kgieworld.sg\/researchstg\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kgieworld.sg\/researchstg\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kgieworld.sg\/researchstg\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kgieworld.sg\/researchstg\/wp-json\/wp\/v2\/comments?post=81748"}],"version-history":[{"count":2,"href":"https:\/\/www.kgieworld.sg\/researchstg\/wp-json\/wp\/v2\/posts\/81748\/revisions"}],"predecessor-version":[{"id":81751,"href":"https:\/\/www.kgieworld.sg\/researchstg\/wp-json\/wp\/v2\/posts\/81748\/revisions\/81751"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.kgieworld.sg\/researchstg\/wp-json\/wp\/v2\/media\/81749"}],"wp:attachment":[{"href":"https:\/\/www.kgieworld.sg\/researchstg\/wp-json\/wp\/v2\/media?parent=81748"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kgieworld.sg\/researchstg\/wp-json\/wp\/v2\/categories?post=81748"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kgieworld.sg\/researchstg\/wp-json\/wp\/v2\/tags?post=81748"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
\n\n\n\nSweet Potato Powder Update<\/h2>\n\n\n\n
1H26 Financial Results<\/h2>\n\n\n\n
Site Visit<\/h2>\n\n\n\n
Valuation & Action<\/h2>\n\n\n\n
\n\n\n\n
\n\n\n\n![\"Subscribe](\"https:\/\/www.kgieworld.sg\/researchstg\/wp-content\/uploads\/2021\/04\/subscribegif.gif\")
<\/a><\/figure>\n\n\n\n
\n","protected":false},"excerpt":{"rendered":"