Analysis of Strong Performance of Nanjiao Food (605339): Driving Factors and Outlook Assessment

As a leading company in baked oil products, Nanjiao Food (605339) has seen volatile upward movement in its stock price in 2025, with a year-to-date increase of 19.77%[0]. On November 21, there was a limit-up movement, with the stock price reaching 20.96 yuan, an increase of 10.03%, and trading volume of 8.15 million shares, far exceeding the 3-month average of 2.56 million shares[0]. Technical indicators show a strong buy signal, with a 52-week price range of 15.02-22.28 yuan[0].

However, fundamentals are under pressure: In Q1 2025, revenue was 789 million yuan (YoY +1.9%), but net profit attributable to parent was 28.9631 million yuan (YoY -62.21%)[0]; net profit in October decreased by 82.28% YoY, mainly affected by rising raw material costs[5]. At the industry level, the food and beverage industry’s revenue growth rate in the first three quarters of 2025 was only 0.18%[6], but the dairy sub-sector maintained a slight growth of 0.79%[0], providing some support for the company.

1. Technical and Fundamental Divergence
   : Short-term stock price strength (limit-up, surging trading volume) contrasts sharply with long-term profit decline, reflecting the divergence between short-term market sentiment-driven and fundamental factors.
2. Attention to Unique Background
   : The company’s Taiwan-funded background and leading position in the baking industry have become short-term market focus[7], driving stock price performance.
3. Sub-sector Support
   : The steady growth of the dairy sub-sector provides partial performance buffer for the company and may become a key to future recovery.

• Rising raw material costs continue to squeeze profit margins[5];
• The overall growth rate of the food and beverage industry slows down, and market demand is weak[6];
• Short-term technical strength may not be sustainable; if fundamentals do not improve, the stock price may face correction pressure.

• Growth potential of the dairy sub-sector (industry slight growth of 0.79%)[0];
• If cost pressure eases, the company’s profitability is expected to recover;
• Taiwan-funded background and industry position may attract attention from specific investors[7].

The recent strong performance of Nanjiao Food (605339) is mainly driven by technical signals and market attention to its unique background, but fundamentals still face major challenges. Investors need to balance short-term technical momentum and long-term profit recovery prospects, and closely monitor changes in raw material costs and growth of the dairy business.