KGI Securities (Singapore) Pte. Ltd.
June 10, 2025

Zixin Group Holdings: Scaling Sweet Potato Value Chains for Explosive Growth and Margin Expansion

Introduction: Zixin Group’s Strategic Expansion and Outperformance

Zixin Group Holdings Ltd. (ZXGH SP/42W.SI), a leading Singapore-listed agri-technology player, is accelerating its growth journey by replicating its successful sweet potato value chain into new territories and diversifying its revenue streams. Backed by robust financials, improving margins, and a visionary expansion plan, Zixin is poised to capture significant upside for investors. KGI Securities maintains an OUTPERFORM rating with a target price of S\$0.060, representing a compelling 76.2% upside as of June 10, 2025.

Replicating Success: Major Expansion into Hainan Province

• Hainan Project Scale: Zixin is extending its sweet potato model from Liancheng County, Fujian, to Lingao County, Hainan, through a revitalization project spanning 8,961.33 hectares across 12 villages. This new site dwarfs the original Fujian operations, unlocking vast replication and scaling potential.
• Timeline and Financial Impact: The Hainan project is still in its early stages, with the bulk of profit contributions expected from late FY26 or early FY27. This marks Zixin’s first replication of its agricultural model outside Fujian, signaling ambitions for nationwide leadership in the sector.

Diversifying Revenue Streams: Feedstock, Snacks, and More

• Feedstock Business: Zixin has launched its feedstock division, converting sweet potato peel waste into value-added animal feed. Initial contracts include:
  • Supplying 180 tonnes to a white duck poultry farm (RMB720,000, one-year contract).
  • Delivering 1,080 tonnes to a local chicken poultry breeder (RMB3.24 million, one-year contract).

  This move transforms a previous disposal cost into a new revenue opportunity, closing the loop within Zixin’s integrated value chain and opening further collaboration with local farmers.

• Sweet Potato Snack Innovation: Zixin achieved a technological breakthrough in producing sweet potato chips and fries, historically a challenge due to texture limitations. By leveraging premium varieties and advanced vacuum low-temperature freshness-locking (VF) technology, Zixin now offers lighter, less oily snacks with enhanced flavor and nutrition. Large distributor orders began in February 2025, prompting capacity upgrades and further expansion plans.
• Sweet Potato Flour and Powder: Construction is underway for a sweet potato powder production line, with completion expected in 1H26. This will allow Zixin to supply sweet potato powder as an additive for bread, noodles, cakes, and more, supporting topline growth in FY26.

Financial Performance: Explosive Growth in Revenue and Profitability

• FY25 Results:
  • Total revenue reached RMB424.7 million in FY25, a 33.1% YoY increase from RMB319.0 million in FY24.
  • Net profit after tax soared by 220% to RMB42.7 million, up from RMB13.4 million.
  • Basic EPS grew to 2.75 RMB cents, compared to 0.97 RMB cents the prior year.
• Margin Expansion:
  • Gross profit margin rose to 34.0% in FY25, up from 32.0%.
  • Operating profit margin reached 13.2%.
  • Net profit margin hit 10.1%, the highest in over five years.
  • Margin improvements are attributed to economies of scale, higher sales, and cost optimization along the integrated value chain.

Operational Excellence and Cash Position

• Operational Efficiency: Zixin’s focus on integrated circular economy models and upgraded manufacturing equipment has extended product shelf life and enabled access to new sales channels such as supermarkets and e-commerce platforms.
• Cash Reserves and Liquidity: As of FY25, cash and cash equivalents stood at RMB183.2 million, with low debt levels. The current ratio is 2.78x, and the cash ratio is 1.37x, reflecting strong liquidity and financial stability to support ongoing growth.

Growth Initiatives: Seedling Cultivation and Nationwide Replication

• Seedling Production Expansion: Subsidiary Dizhongbao increased sweet potato seedling cultivation by 33.3%, from 300 mu to 400 mu, boosting future output and supporting downstream sales. A new seedling nursery in Lingao, Hainan (300–500 mu), is also planned.
• Lingao Revitalisation Project: In partnership with the Lingao County Government, CITIC Construction, and others, Zixin is executing a two-phase revitalisation project covering 8,961.33 hectares. Modest revenue from seedling sales is expected in FY26, with larger contributions from FY27 onward. The initiative is also set to generate regional employment, improve food security, and spur economic development.

Risk Factors: Environmental Exposure

• Weather and Disease: Zixin faces environmental risks, including variable weather patterns and the threat of widespread disease outbreaks across its expanding agricultural holdings. These risks necessitate robust mitigation and risk management strategies to protect yields and profitability.

Valuation and Investment Outlook

• Valuation Methodology: The target price of S\$0.060 is based on a Discounted Cash Flow (DCF) model, using a 2% terminal growth rate and a 10% weighted average cost of capital (WACC).
• Market Performance: As of June 10, 2025, the share price stands at S\$0.034, reflecting a 100% gain over 12 months. With a market cap of S\$54 million and 71.2% free float, Zixin is well-positioned for continued outperformance.
• Strong Upside Potential: The projected TP implies a 76.2% upside, underpinned by robust fundamentals and a successful expansion strategy.

Conclusion: Zixin Group as a Compelling Growth Story

Driven by a scalable, integrated sweet potato value chain, innovative product development, and aggressive expansion into new markets, Zixin Group Holdings stands out as a high-growth agri-technology stock. The company’s improving margins, diversified revenue streams, and solid financial footing create a compelling case for investors seeking exposure to China’s evolving agricultural sector.

Appendix: Financial Highlights Table

For investors seeking high-growth agri-tech exposure, Zixin Group Holdings offers a rare blend of rapid expansion, product innovation, and operational excellence, supported by a strong balance sheet and significant market upside.