Zixin Group is committed to continually innovating products and improving production techniques of our mainstay sweet potato processed products, including snacks and functional products, to keep abreast of consumers’ preferences.
We continue to keep ourselves abreast of consumer preferences and snack food trends in China and overseas and invest in R&D on the recipes as well as production techniques for higher-nutrition snack foods and functional food products. These efforts will not only broaden our product portfolio and strengthen our market position for healthier and higher-nutrition food products, but they could also potentially generate higher revenue for Zixin Group.
While we outsource some of our lower-margin snack products to snack food processing manufacturers, we continue to upgrade our production lines to produce higher-margin snack products in-house and raise efficiency through increased automation. The upgrading of production lines at our existing production facility increased our installed annual production capacity for processed sweet potato snack products from 13,440 tonnes in FY2024 to 13,700 tonnes in FY2025.
Zixin Group has been progressively expanding production capacity and broadening our product range with the newly developed high-tech manufacturing facility, which is sitting on 83.6 mu (approximately 55,733.3 m2 or 5.6 hectares) of land. The high-tech manufacturing facility, when fully completed, will have a total built-up area of 86,000 m2 and an installed annual production capacity of 35,000 tonnes, which will be carried out in three phases. Upon full completion, this intended expansion is likely to increase our existing production capacity of 13,700 tonnes by approximately 2.6 times.
Three automated production lines have been installed at the new high-tech manufacturing facility, which spans 22,800 m2, as part of phase one of the capacity expansion. These lines, intended to produce higher-margin products, including natural-flavoured, additive-free vacuum-packed steamed fresh sweet potatoes and nutritious orange peel sweet potato gummies, are expected to be progressively commissioned in the second half of FY2026. Among the functional food products are both orange and purple sweet potato powders, which are also referred to as single-cell sweet potato powders. These products are expected to achieve a higher composite gross margin of approximately 35%-40% compared to the current product range, which holds a gross margin of about 28%-30%, subject to fluctuations of raw material costs. The increase in margin is primarily attributed to the use of advanced technological methods that involve minimal processing, facilitating the production of higher nutritional value products made from premium quality sweet potatoes. This strategy is in line with consumer demand for healthy, nutritious, and convenient options.
The additive-free vacuum-packed steamed fresh sweet potato, a selected sweet potato variety, is one of Zixin Group’s popular sweet potato products and serves as a convenient food option. The controlled environment storage services by the smart warehouse will enable Zixin Group to develop new, healthy, and high-quality sweet potato products for consumers.
