Xunlong Technology is the world’s largest caviar player with an estimated 36% global volume share in 2025.  According to CIC, it has been the largest caviar company by volume for 11 years since 2015.  The combined market share of the second to fifth player is estimated to be no more than 22% of the market. Its key customers cover overseas caviar houses, fine food companies, fine dining restaurants as well as international airlines.  Its proprietary brand Kaluga Queen is well known among local restaurants, hotels and supermarkets. Going forward, it plans to open more physical stores in China and overseas markets such as Singapore, Japan and Dubai to enhance its brand equity.     

The sturgeon breeding and caviar industry is believed to be an industry with high entry barriers given the long aquaculture cycle, geographical constraints, product consistency and technologies involved nowadays.  With product diversification such as caviar skincare products, caviar ice-cream and caviar chocolates, the potential for caviar is much wider by gradually blending into the general consumer market. 

Robust volume growth and stable prices: Between FY23 and FY25, its caviar revenue rose from RMB523mn to RMB698mn (+15.5 % CAGR). Growth was primarily volume-driven, which increased from about 220 tonnes to 291 tonnes (+15% CAGR), while ASP remained stable at RMB 2,400/kg. In 1H26, volume grew 23% YoY to 140 tonnes, driving caviar revenue up 18.7% to RMB 331mn. However, the ASP declined about 3.5% YoY to RMB 2,355/kg during the period, mainly due to unfavorable USD/RMB exchange rate. Looking ahead, September marks the start of the customer consumption season and the positive orders flows will continue to drive volume growth, while June’s round of price increase (+10% on core overseas products) is expected to support revenue growth.

Strong growth from overseas markets: From FY23 to FY25, overseas revenue grew at a CAGR of 20.7%, increasing from RMB443mn to RMB644mn.  The United States was the largest overseas market in FY25, accounting for 28% of total revenue, followed by Germany (11.8%), France (9.1%) and Russia (8.9%).  In 1H26, overseas sales increased further by 23% YoY to RMB300mn, driven by growth in Europe (+32% YoY) and APAC (+33% YoY).  The company currently exports to 46 regions and serves 129 overseas customers.

Third-party brand supply remains the mainstay of its overseas business.  During the FY23 to FY25 period, sales to overseas third-party brands rose from RMB354mn to RMB527mn, representing a CAGR of 22% CAGR and accounted for 69% of total revenue in FY25.  Its own brand has also performed well overseas, with revenue rising from RMB88mn in FY23 to RMB117mn in FY25, for a CAGR of +15.1%.  It has achieved rapid growth in Southeast Asia and plans to expand into Japan, Korea and Singapore

OPM pressure but OPEX ratio improving: Between FY23 and FY25, its OPM before fair value adjustment on biological assets (pre-adj OPM) ranged between 48% to 52%, where the fluctuation largely came from cost of goods sold.  In 1H26, pre-adj OPM slid further to 41%.  The pressure in pre-adj OPM was mainly a result of lower ASP in 1H26 as well as the USD/RMB FX factor.  Having said that, the OPEX ratio to revenue in 1H26 stood at 18.7%, which was much lower than the 19.7% in FY25 and 22.4% in FY23, thanks to stable marketing and R&D costs.

Our View: Xunlong Technology is a leader in a relatively concentrated market, with a 36% market share as the top five players collectively accounting for 58%.  The industry has high entry barriers as sturgeon farming cycles typically last 7-15 years and new entrants may require more than five years to establish stable production capacity.  Over the years, the company has built a complete age structure for fish aged 1 to 15 years.  It also has a wide coverage of mainstream species such as hybrid sturgeon, Russian sturgeon, Kaluga sturgeon and Beluga sturgeon. As of end-2025, its total live fish inventory exceeded 14k tonnes, ranking first globally in sturgeon reserves and significantly exceeding that of the second largest player.

Its farming technology further reinforces this advantage. The company outperforms peers in roe yield, sex identification and survival rate, enhancing farming efficiency and strengthening its supply-chain advantages.

Moreover, the company has obtained multiple widely recognized international certifications, supporting global market access and solidifying brand credibility. Its proprietary brand “KALUGA QUEEN” has gained broad international recognition among customers including caviar specialty stores, fine food companies, international airline first-class cabins and Michelin-starred restaurants. It is also actively expanding into premium supermarkets, e-commerce platforms, cruise ships, snacks and ice cream, with an aim of stimulating further demand growth.

We are positive about the company’s ability to capture growth in the expanding caviar market, underpinned by its supply-side advantages.  We also believe that the recent price hike and its prudent cost control measures will help stabilize OPM going forward. The counter is trading at 14x FY26E and 12x FY27E P/E. (Research Department)