Floating Button
Home Capital Brokers' Calls

Liu of PhillipCapital maintains 'buy' call and 6 cents target price on Zixin Group following share options plan

The Edge Singapore
The Edge Singapore  • 2 min read
Liu of PhillipCapital maintains 'buy' call and 6 cents target price on Zixin Group following share options plan
The commitment by Zixin chairman Liang and other investors to take up the share options underscores their long-term commitment and confidence in the company’s growth trajectory / Photo: Albert Chua
Font Resizer
Share to Whatsapp
Share to Facebook
Share to LinkedIn
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

Liu Miaomiao of PhillipCapital has kept her "buy" call and 6 cents target price for Zixin Group after the company's plan to issue share options to a group of investors including chairman Liang Chengwang, potentially raising some $26.6 million.

From Liu's perspective, this commitment by Liang and other investors underscores the long-term commitment and confidence in the company’s growth trajectory.

At $26.6 million, it is equivalent to around half the company's current market cap and will be used to fund Zixin's expansion plans in Hainan and Singapore.

Some 889 million share options with an exercise price of 30 cents each will be issued to be exercised within five years.

Liang himself will take up 300 million share options, around a third of the total. His stake will increase to 21.9% of the enlarged share base, assuming he fully exercises his options.

According to Liu, Zixin can expect to start generating revenue from its new production in Hainan in FY2027, which will be an addition to its existing presence in Fujian province.

See also: CGS International's Ong, seeing more demand with higher-density developments, raises BRC Asia target price to $5.30

In addition, Liu expects revenue for Zixin's cultivation and supply segment to grow 27% y-o-y, driven by a 25% expansion in cold storage capacity.

She notes that sweet potato prices have been on an upward trajectory, up 8.8% year to date, thanks to increasing health consciousness in China and rising popularity among younger consumers.

The company has also secured two new orders for animal feed, which gives more traction to a fledgling revenue stream.

See also: RHB raises DBS target price to $57.10 after bank’s stock hits new high

Meanwhile, processed sweet potato sales will remain the key earnings driver, thanks to new product development such as sweet potato chips and functional products.

Liu expects sales to grow 28% y-o-y in the current FY2026 as the new factory commences operations, as well as the launch of Zixin's own proprietary brands.

She expects Zixin's FY2026 patmi to increase by 16% y-o-y to RMB65.2 million.

Meanwhile, it maintains a "robust" balance sheet with net cash of RMB183 million, equivalent to 60% of its market capitalisation.

Zixin Group shares gained 6.45% as at 9.40 am to trade at 33 cents. It is the third most active counter.

×
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
© 2025 The Edge Publishing Pte Ltd. All rights reserved.