Chenguang Biotech Recommendation: 'Price Hikes', 'Price Hikes', Stock Sees 50%+ Upside! [Guotai Haitong Agriculture]

English summary

Short term: H2 is expected to see #volume and price increase for plant extracts. 1) Price: Lutein prices have already been raised sequentially; paprika red may see price increases due to raw material production cuts, depending on 2026 pepper crop conditions; capsicum oleoresin may benefit from rising Indian chili prices, presenting structural opportunities. 2) Volume: Large lutein orders are being signed sequentially, with sales expected to increase starting Q3 2026. Medium-to-long term: #Customization, capacity expansion, and category expansion provide a clear growth path. 1) Customization: Strengthens customer stickiness while increasing product value; in Q1 2026, customized product sales for paprika red and capsicum oleoresin grew over 60% and 90% YoY, respectively. 2) Capacity expansion: Stevia sugar production line renovation is expected to complete in Q3 2026, potentially expanding capacity by 100%, laying the foundation for future scale and profitability improvement. 3) Category expansion: The company continues to horizontally expand into new categories with large market space. The company has a clear medium-to-long-term growth path and is expected to achieve profit growth across cycles. …