CHINA STARCH (03838) reports satisfactory profit increase, anticipated substantial growth in pre-tax profit by 2024.

CHINA STARCH (03838) announced that the group is expected to have total revenue of approximately 11.4 billion yuan in 2024, while the total revenue in 2023 was 11.798 billion yuan. At the same time, the group is also expected to achieve a significant increase in pre-tax profit, around 800 million to 840 million yuan, compared to 177 million yuan in 2023. The board of directors believe that the expected significant increase in pre-tax profit for the year is mainly due to the following factors: in 2024, the market price of corn kernels (the group's main raw material) is significantly lower than in 2023; after the expansion of the lysine production facilities in 2023, the group's production and sales of lysine products have significantly increased; in this year, economies of scale have been achieved through the expansion of production in all product lines; and despite the insufficient demand for multiple products, the group has successfully expanded its market share while maintaining profitability. The board of directors believe that the strong growth in pre-tax profit is mainly driven by external factors, namely the significant decrease in the price of corn kernels and the success of cost competitive strategies. However, in the long term, whether the industry can improve is still subject to challenges such as oversupply, weak demand for domestic corn refining products, and other challenges.