Chenguang Biotech (300138 CH): Lutein Ramp-Up and Cottonseed Recovery Boosted Revenue

For 9M26, Chenguang Biotech's revenue/attributable net profit/recurring net profit were RMB5,030/270/240mn (-0.3/-11.0/-7.4% YoY). For 3Q26, revenue/attributable net profit/recurring net profit were RMB1,870/90/70mn (+34.7/+3.3/+3.9% YoY), in line with the earlier profit alert. Revenue growth turned positive in 3Q26, mainly as the cottonseed business grew rapidly on the timing of order recognition, paprika oleoresin traded price for volume, and the fulfilment of high-priced lutein orders drove growth in both volume and price. The GPM declined as paprika oleoresin traded price for volume and capsicum oleoresin prices came under pressure, but a lower expense ratio supported the return to positive attributable net profit growth. Looking ahead, paprika and capsicum oleoresin prices remain at cyclical lows, while tight raw-material supply in the new procurement season should allow cost pass-through, and we see room for earnings recovery. Given intensifying competition and prices of some pro