It offers exposure to the growth and expansion of the sweet potato cultivation and sale business in China, notes RHB Bank

 

[SINGAPORE] Catalist-listed Zixin Group : 42W +3.13% is hardly considered a household name on the Singapore Exchange (SGX). The company describes itself as &ldquo a leading biotech-focused sweet potato integrated industrial value chain operator in China&rdquo &ndash which is a mouthful, and hard for investors to digest.

 

In essence, Zixin Group researches and produces sweet potatoes, as well as manufactures a range of sweet potato snacks. Analysts believe that the little known company could be a treat for retail investors.

 

&ldquo The stock offers exposure to the growth and expansion of the sweet potato cultivation and sale business in China,&rdquo said Alfie Yeo, head of small-mid cap research at RHB Bank Singapore.

 

Zixin Group was recently highlighted as one of the top 20 &ldquo jewels&rdquo among Singapore&rsquo s small cap companies for 2025.

 

The research house expects that Zixin Group could see a potential earnings uplift in FY2026 &ndash driven by higher volume sales and better margins.

 

Currently, the sweet potato producer has around 100 mu or 66,650 square metres of land in China for its seedlings. By FY2026, there will be an additional 200 mu of land to cultivate more seedlings for sale to external parties.

 

&ldquo Capacity expansion is expected to drive growth, both in the immediate and longer term,&rdquo Yeo said. &ldquo Its new site in Hainan is expected to increase capacity exponentially.&rdquo

 

The group has partnered Citic Construction in Hainan to establish another sweet potato cultivation area. This project, to be completed in FY2027, will cover 5,000 mu for seedlings, which will support 100,000 mu of cultivation in the main sweet potato plantation.

 

Since the first half of 2025, Zixin has also extended the shelf life of its harvested sweet potato by three to six months. It brought in third-party processing and cold storage facilities to achieve this.

 

Fresh sweet potatoes have a short shelf life of three to five weeks. Hence, the extended shelf life of the harvests would result in improved margins and a greater sales volume over time.

 

Zixin is also expanding into two business lines, which should ramp up from FY2026 onwards. The first is a high-technology manufacturing facility, which enables the company to produce and sell vacuum-packed steamed sweet potatoes and purple sweet potato powder.

 

The commercial production of vacuum packed steamed sweet potatoes began in February 2025.

 

The second business line is to produce probiotic-infused chicken and white duck feed ingredients from fermented sweet potato agricultural waste.

 

In taking in its agricultural waste, Zixin has integrated a circular economy into its production chain which will help the producer enhance its economies of scale.

 

In March 2025, the company received a second order of 180 tonnes of feedstock from a local white duck poultry farm, following an initial order of 1,080 tonnes in January. In total, this is expected to generate approximately four million yuan (S$700,000) in revenue for a year.

 

For the full year ended March, Zixin Group&rsquo s net profit more than trebled to 42.7 million yuan, from 13.4 million yuan the previous year. Full-year revenue rose 33.1 per cent to 424.7 million yuan for FY2025.

 

The company attributed its latest revenue and earnings to enhanced operational efficiency, additional revenue sources and having achieved economies of scale through capacity expansion.

 

&ldquo We believe this set of results is just a beginning,&rdquo said Liang Chengwang, executive chairman and CEO of Zixin. &ldquo The circular economy is now completed with the production and sale of probiotic-infused fermented sweet potato feedstock derived from agricultural waste.&rdquo

 

In early April, the company announced its breakthrough on sweet potato crisps and fried snack products. It made a special modification to the production process, utilising temperature freshness-locking technology to achieve a &ldquo light and non-greasy&rdquo flavour and to prevent the degradation of heat-sensitive nutrients.

 

KGI Securities in May initiated coverage on the stock with an &ldquo outperform&rdquo recommendation and a target price of S$0.06 &ndash implying a potential upside of nearly double its current price.

 

Year to date, shares of Zixin Group have risen 6.7 per cent to close at S$0.032 on Friday (Jun 6).

 

&ldquo Zixin Group owns and operates a fully integrated sweet potato supply chain, spanning from upstream cultivation to downstream consumer sales,&rdquo said KGI analyst Tang Kai Jie. &ldquo By controlling the entire supply chain, Zixin Group eliminates unnecessary costs such as those associated with intermediaries, and reduces transportation expenses.&rdquo