HK Stock Market Move | CHINA STARCH (03838) soars over 30% after profit announcement; expects substantial increase in pre-tax profit in 2024.

China Starch (03838) rose by more than 30% after the profit announcement, reaching a 25% increase by the time of the release, at a price of 0.25 Hong Kong dollars with a trading volume of 6.6443 million Hong Kong dollars. On the news front, China Starch announced that the group is expected to have a total revenue of approximately 11.4 billion yuan in 2024, compared to 11.798 billion yuan in 2023. At the same time, the group also expects a significant increase in pre-tax profit, ranging from 800 million to 840 million yuan, compared to 177 million yuan in 2023. The board believes 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 achieved a significant increase in lysine production and sales in that year; in the same year, achieving economies of scale through expanding production in all product lines; and despite the insufficient demand for multiple products, the group successfully expanded its market share while maintaining profitability. The board believes that the strong growth in pre-tax profit expectations is mainly due to external factors, namely the significant decrease in corn kernel prices and the success of the cost competitive strategy. However, in the long run, the industry's improvement is still subject to challenges such as oversupply, low demand for domestic corn refining products, and others.