Angel Yeast's Molasses Cost Optimization Drives Steady Profitability Recovery
Angel Yeast recently disclosed during an institutional survey that it has completed its 2026 molasses procurement plan, securing lower prices compared to the previous year. This cost advantage, combined with declining molasses prices and revenue growth, is steadily improving the company's profitability. Angel Yeast also possesses in-house hydrolyzed sugar production capabilities to mitigate cost fluctuations.
Angel Yeast recently provided insights into its latest progress in molasses procurement and cost control, as well as its impact on profitability, during a joint survey attended by seven institutions including Soochow Securities. Company management stated that the 2026 molasses procurement plan has been successfully completed, with purchasing prices secured at a lower level compared to the previous year, effectively locking in a long-term low-cost advantage.
In the past, significant fluctuations in molasses prices had temporarily pressured Angel Yeast's profit growth, causing its profit growth rate to lag behind its revenue growth rate. However, with the gradual decline in molasses prices over the past two years, coupled with the company's sustained revenue growth, Angel Yeast's overall profitability is steadily recovering and improving. The company emphasized that its product pricing strategy consistently adheres to market principles, taking into account various factors such as costs and market supply and demand, to maintain price stability. Product prices will not be drastically adjusted due to short-term cost reductions.
Notably, Angel Yeast demonstrates strong resilience in responding to raw material price fluctuations. The company possesses multiple in-house hydrolyzed sugar production lines. This means that when molasses prices rise sharply, the company can quickly activate an internal substitution mechanism, utilizing its self-produced hydrolyzed sugar to meet production needs. This effectively mitigates the impact of external molasses price volatility on production costs, ensuring supply chain stability and cost controllability.