We believe Zixin (SGX:42W)’s earnings growth of 35% y-o-y in 2H26 remains intact with
stabilising supply and prices of fresh sweet potato,
product diversification in high-margin processed products, and
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We expect the Hainan project to serve as a medium-term growth catalyst for Zixin and think the first batch of revenue contributions to materialise in FY27e, potentially starting with sweet potato trading activities. The expansion should provide significant fundamental upside for Zixin, primarily by
securing internal supply to stabilise raw material prices and mitigate margin fluctuations, and
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Key Highlights
Fresh sweet potatoes.
We expect a ~28% y-o-y growth in fresh sweet potato harvest in FY26 to drive profitability, supported by favourable weather conditions and the peak harvesting window between late August and early February. The higher yield helps reduce Zixin’s reliance on external farmers’ supply, thereby reducing cost.
Meanwhile, we anticipate the sweet potato prices to moderate, with growth slowing at +2% per kg, down from +4% per kg in 1H26 as supply continues to normalise. In addition, Zixin has renewed an annual contract for animal feed (white ducks) valued at RMB1.44mil (~S$269K). This contract doubled the volume of the previous order to 360 tonnes of feedstock, with the revenue contribution expected to become increasingly material by FY27e.
Overall, we maintain our FY26e forecast with an estimated gross margin of 32.5%. The margin performance to be supported by higher in-house fresh sweet potato output during the peak harvest season, alongside an increasing contribution from higher-margin processed products.
Sweet potato processed products.
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Above is an excerpt from a report by Phillip Securities Research. Clients of Phillip Capital may be the first to access the full PDF report @ https://www.stocksbnb.com/.
