The global market for sweetener is experiencing a shift. Xiqian Technology Co., Ltd. (referred to as "Xiqian"), a leading Chinese food additive company, resubmitted its prospectus to the Hong Kong Stock Exchange in February 2025, aiming to go public during a window of opportunity marked by the end of industry price wars and the rebound of sucralose prices. However, declining net profits year after year, family governance disputes, and regulatory inquiries cast a shadow over its path to listing.

Xinq'an is a company specializing in the production of food additives, with its main products including food-grade glycine and sucralose. For fiscal years 2022-2024, Xinq'an Technology's revenues were 761 million yuan, 447 million yuan, and 569 million yuan, respectively; and its net profits were 122 million yuan, 44.662 million yuan, and 43.406 million yuan, respectively.

Price底部反弹，行业产能清理

In the third quarter of 2024, the domestic market price of sucralose in China rebounded from 105,800 yuan/ton in June to 191,300 yuan/ton in September, an increase of over 80%. This rebound was attributed to the temporary end of the price war in the industry: from 2022 to 2024, nearly half of the small and medium-sized domestic manufacturers exited the market due to losses, strengthening the pricing power of leading companies. In its prospectus, Xinqia'an predicted that the price of sucralose is expected to further increase with the reduction in production capacity.

Stable international demand, overseas layout becomes crucial.

The long-term price of sucralose in overseas markets is higher than that in the domestic market (the average price in 2023 is about 623 yuan/kg). Xin Qian plans to expand production through its factory in Thailand (with a designed annual capacity of 500 tons) and aims to increase the proportion of international sales from 54.9% in 2023. The high profit margins and stability of the overseas market may serve as a "moat" to help it withstand domestic price fluctuations.

Industry collaboration strengthens, long-term growth logic is clear.

In February 2025, the sucralose industry summit was held, where four leading companies, including Shineway, proposed to establish a regular cooperation mechanism to jointly foster a healthy market ecosystem. With the increase in industry concentration and the trend towards healthy consumption (such as the demand for "sugar-free" beverages), it is estimated that the global sucralose market size will have a compound annual growth rate of 7.8% from 2023 to 2028.

Core Advantages

Industry Leadership: Based on sales volume in 2023, Xin Qi'an's food-grade glycine has a global market share of 5.1% (ranked first), and its sucralose has a global market share of 4.8% (ranked among the top five).

Sponsor：Guokai Kailei（可口可乐）、Rabbit Corporation（草莓公司）等跨国企业为大客户提供了高价值的支持，提高了业务稳定性。

China's only overseas sugar factory producer, Thai sugar factory, tests successful production to reduce export tax risk.

Potential Risks

Significant performance volatility: Net profit plummeted from 122 million yuan to 43 million yuan between 2022 and 2024, with net profit margin decreasing from 16% to 7.6%, highlighting price sensitivity and challenges in cost control.

The dilemma of product单一化 (single-product focus): Glycine and sucralose together account for over 90% of the revenue, while new products (such as curcumin, isomaltulose) are still in the R&D stage and will unlikely become a growth driver in the short term.

Family governance disputes: Founder Wang Xiaoqiang's family holds 54.8% of the shares, and 4/5 of the executive directors on the board are family members, causing investors to be concerned about decision-making transparency and governance efficiency.

CSRC Issues Four Consecutive Inquiries

In August 2024, the China Securities Regulatory Commission required New Qi'an to provide additional explanations regarding the fairness of the pricing for equity changes, whether the fundraising projects involve "high energy consumption" issues, and to explain the coordination between the A-share and Hong Kong stock listing plans. Failure to respond adequately may delay the listing process.

Employee High Turnover Rate and ESG Concerns

In 2023, the employee turnover rate reached as high as 39%, with a near 60% loss rate among Gen Z employees, and there are issues with unpaid social security and public pension contributions (accumulating to 3.7 million yuan). The Hong Kong Stock Exchange's assessment of its ESG performance may impact its listing valuation.

Pressure of the Valuation Adjustment Mechanism (VAM)

Shareholder Wang Xiaqiang signed a "guaranteed return" agreement with external investors, stipulating that if the stock price performance fails to meet expectations after listing, he will have to compensate the difference out of his own pocket. This move may exacerbate short-term performance pressure.

Opportunity Window

Industry recovery + fundraising expansion: Upon successful listing, fundraising will be used for factory expansion in Thailand, international sales network construction, and new product research and development, in line with industry synergy and overseas expansion trends.

According to the amendment, New Qi'an would be required to complete its public listing by the end of June 2025 in order to be entitled to compensation.

Risk Constraints

Risk of price war reigniting: If leading players restart price cuts to争夺份额, the price of sucralose may come under pressure again, eroding the expected recovery in profitability. （注：原文中的“为争夺份额”在翻译时未完整给出，推测应为“为了争夺市场份额”，因此进行了补充。）

Market confidence is waning: a persistent decline in net profit margin may impact investors' judgments about its long-term growth potential, needing to improve performance to rebuild the market.