Zixin Group Holdings Delivers Strong Growth on Volume Surge, BUY Rating with S$0.06 Target Price June 18, 2026
Company Overview
Zixin Group Holdings Ltd operates as a Chinese agricultural company specialising in fresh sweet potatoes and processed sweet potato products. The company serves both domestic Chinese markets and international customers through its dual-segment business model, combining fresh produce distribution with value-added processing operations.
Strong Financial Performance Exceeds Expectations
Zixin Group Holdings delivered impressive 2H26 results that surpassed analyst forecasts, with revenue climbing 44.3% year-on-year to RMB386.8 million and net income rising 29.9% to RMB45.4 million. The strong performance was driven by higher sales volumes across both business segments, with full-year revenue and profit after tax and minority interests reaching 104% and 123% of forecasts respectively.
Fresh Sweet Potato Segment Powers Growth
The fresh sweet potato segment emerged as a standout performer, with earnings nearly doubling due to approximately 30% year-on-year growth in sales volume. This robust performance was underpinned by the company’s smart warehouse infrastructure, which extends shelf life and reduces spoilage, enabling a higher percentage of inventory to flow into revenue-generating sales channels.
Despite expectations of margin pressure from rising production costs such as fertiliser, Zixin anticipates that volume growth will offset these headwinds and maintainthe current net margin of approximately 21.5% for the cultivation and supply segment. The company projects 60% year-on-year revenue growth for this segment in FY27, supported by expanded sales channels within China and deeper international market penetration.
Processed Products Segment Shows Steady Expansion
The processed products division also demonstrated strong momentum, with earnings increasing 12.5% year-on-year. Growth was fuelled by higher sales volumes and portfolio expansion, particularly the introduction of additive-free, vacuum-packed steamed sweet potatoes launched in FY25, complementing existing sweet potato crisps and fries.
Sales of processed chips and steamed sweet potato products surged 71% year-on-year, establishing these products as the segment’s primary growth engines. Management expects 30% year-on-year growth for FY27, driven by enhanced production of high-margin premium products and an expanding white-label customer base.
Investment Recommendation
Phillip Securities Research maintains its BUY recommendation whilst raising the target price to S$0.06. The firm has increased FY27 revenue and net profit forecasts by 23% and 29% respectively, expecting 24% year-on-year earnings growth driven by continued expansion of Zixin’s white-label ODM business and sustained demand for premium sweet potato varieties.
Frequently Asked Questions
Q: What drove Zixin Group's strong 2H26 performance?
A: The company's revenue increased 44.3% year-on-year to RMB386.8 million and net income rose 29.9% to RMB45.4 million. This was driven by higher sales volumes in both the fresh sweet potato and processed products segments.
Q: How did the fresh sweet potato segment perform?
A: The fresh sweet potato segment delivered exceptional results with earnings nearly doubling. This was supported by approximately 30% year-on-year growth in sales volume and the company's smart warehouse infrastructure that reduces spoilage.
Q: What products are driving growth in the processed segment?
A: The processed products segment grew 12.5% year-on-year, with sweet potato chips and steamed sweet potato products as primary growth engines, showing 71% year-on-year sales growth. The company also launched additive-free, vacuum-packed steamed sweet potatoes in FY25.
Q: What is Phillip Securities Research's recommendation and target price?
A: Phillip Securities Research maintains a BUY recommendation and has raised the target price to S$0.06, whilst increasing FY27 revenue and net profit forecasts by 23% and 29% respectively.
Q: What are the key growth drivers for FY27?
A: Expected 24% year-on-year earnings growth will be driven by the continued expansion of the white-label ODM business, customer additions across major Chinese snack brands and international markets, as well as sustained demand for premium sweet potato varieties.
Q: How will rising costs affect the company's margins?
A: Whilst rising production costs, such as fertiliser are expected to pressure margins, Zixin anticipates that sales volume growth will offset these cost headwinds, maintaining the current net margin of approximately 21.5% for the cultivation and supply segment.
Q: What are the growth projections for each segment?
A: For FY27, the fresh sweet potato segment is expected to grow 60% year-on-year through expanded sales channels, whilst the processed products segment is projected to grow 30% year-on-year, driven by premium product production and white-label customer expansion.
This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.
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About the author
Serena Lim Yi Qi
Serena is a Research Analyst covering the U.S. Technology sector at PSR. Prior to joining the firm, she worked as an Equity Dealer and held various roles across the insurance and banking industries. Serena holds a Bachelor's degree in Economics and a Postgraduate Diploma in Applied Finance from the University of Adelaide.
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