【Zhongxing Mycology* Su Cheng】In-depth: Performance turning point now, forging a new journey in Cordyceps development

A leading domestic player in large-scale edible mushroom production has bottomed out and rebounded in 2025. The company was founded in 2005 and listed in 2015. The actual controllers, Tao Jun and Tian De, together hold 35.93% of the shares. Twelve production bases cover five major regions across the country, placing the company close to raw material origins and consumption markets. Revenue has long remained stable. In 2023, button mushrooms became the company’s largest product. The product mix and regional layout have been optimized in parallel, with East China and Southwest China as the core growth regions. In recent years, profits were harmed due to weak prices of enoki mushrooms. In 2025, performance improved significantly. The improvement is driven by strong fundamentals in button mushrooms’ steady profitability, a rebound in enoki mushroom prices, and ongoing optimization of expense ratios.

The edible mushroom industry’s overall landscape continues to improve: the factory-based production rate is rising, and industry concentration among leading firms is increasing. High-value varieties have become a new growth engine. In recent years, national policies have elevated the edible mushroom sector to the strategic level of national food safety. Full-chain support policies create a favorable external environment for the company in seed industry revitalization and standardized production. In 2024, the industry’s output value exceeded 420 billion yuan, and factory-based output grew rapidly. Among enterprises with factory-based edible mushrooms producing over 100 tons per day nationwide, the company ranks second. Its core pillar business, button mushrooms, has daily capacity of 450–500 tons, accounting for 40% of domestic factory-based output. Gross margin remains stable at 34% or above, giving it strong industry dominance. In response to the earlier issue of excess capacity in the enoki mushroom market, the company, as a leading player, proactively reduced capacity and carried out technological upgrades. By compressing capacity, it helped drive a rebound in price floors starting in the second half of 2025. The scale of mass production of Cordyceps militaris is expanding rapidly. Breakthroughs in artificial cultivation techniques for winter worm summer grass, along with falling costs, have made it a new high-margin track. With policy support such as the “big food concept” and high-quality development of the industry, the edible mushroom industry is shifting from scale expansion to quality upgrades. High-value varieties and factory-based leading firms continue to benefit.

With nationwide layout, a multi-variety strategy, and technology R&D, the company builds core competitive barriers. Relying on the scale effect enabled by its nationwide layout, the company achieves cost reduction and efficiency gains. On the cost side, raw materials are sourced and sold locally from each base, combined with large-scale production, effectively spreading raw material, logistics, and fixed costs to form a significant cost advantage. Through large-scale production, the company’s overall expense ratio has dropped markedly from 19.55% in 2018 to 13.99% in 2025. In terms of technological innovation, the company’s R&D spending in 2024 ranked among the top in the industry. It has successfully bred proprietary varieties such as “Zhongfu No. 1,” and is gradually shedding reliance on foreign mushroom strains. More forward-looking is that the company is working hard to secure a strong position in rare edible mushrooms. It is focusing on factory-based bio-mimetic cultivation projects for winter worm summer grass in Gansu and Sichuan. The cost of artificial cordyceps is far lower than the market price of wild products, and it has a relatively high net profit margin. With deep technical accumulation and breakthroughs in high-gross-margin varieties, Junxing Mushrooms is transforming from a traditional producer into a modern bio-agriculture leader with the capability to capture value across the entire industrial chain.

Profit forecasts and investment rating: Currently, the company’s enoki mushroom category profitability continues to recover, button mushroom products are growing steadily, and the new category winter worm summer grass (ecological breeding) has begun production smoothly. We expect the company’s revenue for 2026–2028 to be 2.31/2.51/2.69 billion yuan, respectively, representing year-over-year growth of 9.9%/8.8%/7.4%. Net profit attributable to shareholders for 2026–2028 is expected to be 0.38/0.43/0.48 billion yuan, respectively, representing year-over-year growth of 13.0%/13.0%/11.8%. The corresponding PE ratios are 16/14/13X, respectively. Initial coverage: a “Buy” rating.

Risk warning: The progress of winter worm summer grass production being less than expected, industry competition risk, and downstream demand being less than expected.

(Analyst: Su Cheng, Li Yiqi)

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