Angel Yeast plans 3.5 bln yuan convertible bond, first-ever, to boost yeast protein capacity

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

This marks the company's first-ever convertible bond financing since its listing. After deducting issuance expenses, the funds will be allocated to several projects, including:

• Phase II of the Baiyang Biotechnology Park in Yichang High-tech Zone
• Yichang Company's core technology R&D project for yeast protein
• Kekedala's annual 20,000-ton green manufacturing project for yeast products
• Park factory's annual 60,000-ton flexible intelligent manufacturing and supporting project for food ingredients
• Supplementary working capital

Several of these projects are directly aimed at expanding yeast protein production capacity. The company has identified yeast protein as a core strategic growth driver for the "15th Five-Year Plan" period.

80% of Funds Directed Toward Capacity Expansion

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

Details of the fund allocation:

| Project | Proposed Investment (RMB) | |---|---| | Phase II of Baiyang Biotechnology Park (Yichang High-tech Zone) | 955 million | | Of which: 32,000-ton yeast protein and co-product green manufacturing | 875 million | | Of which: 12,000-ton high-purity yeast protein core technology R&D | 80 million | | Yichang Company's yeast protein core technology R&D project | 890 million | | Kekedala's 20,000-ton yeast product green manufacturing project | 775 million | | Park factory's 60,000-ton food ingredient flexible intelligent manufacturing project | 200 million | | Supplementary working capital | 680 million |

Based on feasibility analysis, once completed, these projects are expected to add over 33,000 tons of yeast protein capacity per year, along with additional capacity for yeast extract and other 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 a first-class international biotechnology company" during the 15th Five-Year Plan period.

Angel Yeast emphasized that this issuance focuses on its core business and rational financing, with all investment projects closely related to existing operations. There is no cross-industry or diversified investment involved. The plan is subject to shareholder approval, review by the Shanghai Stock Exchange, and registration with the China Securities Regulatory Commission.

Steady Growth and Full-Capacity Yeast Protein Production

Angel Yeast is a global leader in yeast and yeast derivatives, engaged in the R&D, production, and sale of yeast, yeast derivatives, and related biological products. Its products are widely used in baking, fermented foods, seasonings, 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. Its yeast product series ranks second globally.

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

| Period | Revenue (RMB) | Net Profit Attributable to Parent (RMB) | |---|---|---| | 2023 | 13.585 billion | 1.273 billion | | 2024 | 15.197 billion | 1.325 billion | | 2025 | 16.729 billion | 1.544 billion | | H1 2026 | 9.187 billion (+16.3% YoY) | 881 million (+10.21% YoY) |

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

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 optimize product structure, improve capacity utilization of food ingredient production lines, and strengthen the company's market position and overall competitiveness.

Angel Yeast noted that after the funds are in place, its cash, total assets, and net assets will increase accordingly. The financial cost of using the funds before conversion is relatively low. As bondholders gradually convert their bonds, the company's debt-to-asset ratio will decline, 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