“As one of the few listed companies with a fully integrated vertical value chain in the sweet potato sector, Zixin enjoys a moat that is difficult for competitors to replicate given the time, capex and know-how needed to succeed,” says Yon.
In his report, Yon also highlighted that Zixin is the only listed sweet potato supply chain operator in China with a truly vertically integrated ecosystem that spans seedling research, cultivation, food production, and waste recycling. This closed-loop model delivers higher efficiency, stronger margins, and greater product consistency, while supporting national priorities (China’s 15th 5-Year Plan) on food security and sustainability.
Yon believes that Zixin will be extending its scalable and integrated model into Lingao County in Hainan as part of its next growth phase, following the company’s success back in Liancheng County.
“The proposed sweet potato cultivable farmland in Lingao County is approximately five times bigger than the current size in Liancheng County and has a climate that can cultivate sweet potatoes twice a year. This will help Zixin strengthen upstream supply, expand processing capacity, and enhance regional distribution,” Yon adds.
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With the Chinese government supporting Zixin, Yon potentially sees profits more than double when Hainan fully comes online.
According to Yon, Zixin’s current valuation remains undemanding relative to its fundamentals. Zixin trades at about 5.4 times FY2026 PE ratio and 0.5 times PB ratio, compared with sector averages of 18.3 times and 2.6 times respectively.
Backed by a warchest of RMB108 million in net cash and improving profitability, Zixin presents a compelling opportunity for re-rating as its growth story unfolds.
Meanwhile, founder and CEO Liang Chengwang, together with key shareholders, has significantly increased his stake through 5 year share options (34% of Zixin) which potentially can bring his stake to 21.9%.
Despite the dilution, Yon views this positively as it demonstrates strong confidence in Zixin’s future and aligns management’s interests closer to shareholders. The proceeds will be used to replicate Lian Cheng’s success in Hainan, which will more than double Zixin’s current revenue and profits.
Zixin Group shares gained 2.78% as at 10.30 am to trade at 3.7 cents.
