Angel Yeast Plans 3.5B Yuan Convertible Bond, First-Ever, to Boost Yeast Protein Capacity

September 24 — Angel Yeast Co., Ltd. (SH600298, closing price: 39.70 yuan, market cap: 34.452 billion yuan) announced on the evening of September 24 that it plans to issue convertible corporate bonds to unspecified investors, with total funds raised not exceeding 3.5 billion yuan.

This marks the company's first-ever convertible bond financing since its listing. After deducting issuance expenses, the proceeds will be allocated to several projects, including the Phase II of the Baiyang Biotechnology Park in Yichang High-tech Zone, the core technology research project for yeast protein at the Yichang subsidiary, the green manufacturing project for 20,000 tons of yeast products in Kekedala, the flexible intelligent manufacturing and supporting project for 60,000 tons of food ingredients at the park plant, and supplementary working capital. Several of these projects are directly aimed at expanding yeast protein production capacity, which the company has identified as a core strategic growth driver for the "15th Five-Year Plan" period.

80% of Funds Directed Toward Capacity Projects

According to the proposal, each bond will have a face value of 100 yuan, issued at par, with a term of six years, and will be listed on the Shanghai Stock Exchange. Total funds raised will not exceed 3.5 billion yuan. After deducting issuance expenses, the funds are planned to be invested in five major projects, with total project investment amounting to 3.771 billion yuan.

Details of the fund allocation are as follows:

• Baiyang Biotechnology Park Phase II (Yichang High-tech Zone): 955 million yuan, including:
• 875 million yuan for the green manufacturing project of 32,000 tons of yeast protein and co-products
• 80 million yuan for the core technology research project for 12,000 tons of high-purity yeast protein and co-products
• Yichang subsidiary yeast protein core technology research project: 890 million yuan
• Kekedala green manufacturing project for 20,000 tons of yeast products: 775 million yuan
• Park plant flexible intelligent manufacturing and supporting project for 60,000 tons of food ingredients: 200 million yuan
• Supplementary working capital: 680 million yuan

Based on feasibility analysis, once these projects are completed and operational, they are expected to add a total of over 33,000 tons of yeast protein capacity per year, along with additional capacity for co-products such as yeast extract and food ingredients. The company stated that the implementation of these projects will rapidly increase its yeast protein production capacity, aligning with its strategic goal of becoming "the world's No. 1 yeast company and an internationally first-class biotechnology company" during the "15th Five-Year Plan" period.

The company emphasized that this issuance focuses on its core business and rational financing, with the investment projects closely related to its existing operations. There is no cross-industry or diversified investment involved. The issuance plan still requires approval from the shareholders' meeting, review by the Shanghai Stock Exchange, and registration with the China Securities Regulatory Commission before implementation.

Steady Performance Growth; Yeast Protein Lines Running at Full Capacity

Angel Yeast is a global leader in yeast and yeast derivative products, primarily engaged in the R&D, production, and sale of yeast, yeast derivatives, and related biological products. These products are widely used in baking and fermented foods, condiments, animal nutrition, microbial nutrition, human nutrition, and bio-manufacturing. The company's total fermentation capacity has reached 490,000 tons, with a 55% domestic market share and over 20% global market share, ranking second globally in yeast product scale.

In recent years, Angel Yeast has achieved steady performance growth:

| Period | Revenue (billion yuan) | Net Profit Attributable to Parent (billion yuan) | |--------|------------------------|--------------------------------------------------| | 2023 | 13.585 | 1.273 | | 2024 | 15.197 | 1.325 | | 2025 | 16.729 | 1.544 | | H1 2026 | 9.187 (+16.3% YoY) | 0.881 (+10.21% YoY) |

Yeast protein is the company's third growth curve, following its core yeast business and yeast extract. In December 2023, the National Health Commission included yeast protein in the new food ingredient catalog, making it the first protein ingredient approved in China's microbial sector. Currently, the company's yeast protein production lines are running at full capacity, with downstream applications expanding from traditional health supplements and sports nutrition to food and beverages, meat products, and other areas.

The company has designated yeast protein as a core strategic growth driver for the "15th Five-Year Plan" period. The fundraising projects are centered on expanding yeast protein capacity, which will help increase production capacity, optimize product structure, improve capacity utilization rates for food ingredient production lines, consolidate and enhance the company's market position, and ultimately boost overall competitiveness and risk resilience. This is expected to support future earnings growth and align with the company's long-term development needs and shareholder interests.

The company stated that after the funds are received, its cash reserves, total assets, and net assets will increase accordingly. The financial cost of using the funds before bond conversion is relatively low. As bondholders gradually convert their bonds, the company's asset-liability ratio will decrease, helping to optimize its capital structure and enhance risk resilience.

Disclaimer: The content and data in this article are for reference only and do not constitute investment advice. Please verify before use. Investment decisions made based on this information are at your own risk.

Cover image source: Liu Guomei