Guotai Haitong: New demand contributes to the increase in probiotics, optimistic about the new direction of second-generation AKK.

Guotai Haitong released a research report stating that probiotics are widely used, with new demands such as Douyin channels and weight loss contributing to the increase in demand. It is optimistic about the second-generation probiotic AKK, and believes that market education on the brand side is expected to accelerate demand release. From the product side, the iteration goes from basic intestinal care to weight loss and specific area care. It sees a broad market for the second-generation probiotic AKK, with top brand layouts in education markets, which are expected to help drive ingredient breakthroughs. Brand-side market education is expected to accelerate demand release. Main points of Guotai Haitong are as follows: Probiotics are widely used, health products are driven by new Douyin channels and noticeable demand for weight loss. Probiotics have a variety of functions and are widely used in food, health care, and other fields, with the current end-market size exceeding one hundred billion. The probiotic health product scale is expected to reach 16 billion in 2025, with a year-on-year increase of 6%. Douyin has been growing rapidly, with a GMV growth rate close to 40%. Probiotic health products are priced in the range of 5-15 RMB per daily amount, with different demands for different types, strains, and effects. Brands are continuing to expand their product lines, with the top three brands of Wan Yilan, Lifespace, and Newtralai each having retail sales exceeding 1 billion. Probiotics upstream concentration is high, with international giants currently dominating. Local companies are strengthening research and development and capacity building, with great potential for future domestic substitution. Foreign DuPont and Hansen account for over 80% of the upstream raw materials market share, mainly due to years of accumulation of star strains, research, and customer base. The probiotics raw material link has high added value, with strain being a key pricing factor and a need to create star strains. Domestic leading companies have gross profit margins of 40-60% and net profit margins of 20-30%. In recent years, domestic companies have been focusing on research and development, promoting the industrialization of core strains such as AKK through independent research/cooperation accumulation, while capacity supply is sufficient. Subsequent localization substitution is expected to be promoted with the accumulation of star strains. Optimistic about the second-generation probiotic AKK, positioning in the weight loss hot trend direction, brand-side accelerates market education. The second-generation probiotics focus more on precise targeting of specific health issues with clear mechanisms, with AKK as a representative. It has certain functions in improving metabolism, immunity, anti-aging, etc., and its industrialization and marketization have accelerated in recent years. The demand for probiotic weight loss is growing rapidly, with sales in the weight loss direction of probiotic health products expected to increase by 45% in 2025 according to early data. Many brands of weight loss and weight reduction products have become major sellers, with AKK having rich basic research and clinical validation in weight loss and metabolism enhancement. Referring to the market size of the B420 strain, which also focuses on weight loss, the bank believes that the AKK market is broad. Top brands such as Feicui and Wonderlab are laying out in the education market, which is expected to help drive ingredient breakthroughs. Risk alert: Changes in cross-border health product regulation, industry competition intensification, and new product performance falling short of expectations.