Zhongxing Mushroom Industry's High Growth: How the White Button Mushroom Supports "60% of the Market," Why It Can't Support the Stock Price

AI Question · Performance surge, yet the stock hits the daily limit down—what is the market worried about?

In 2025, the edible fungus industry stabilized and rebounded, and leading firms in the sector delivered strong results. Junxing Mushroom Industry (002772.SZ) turned in an impressive performance: for the full year, it generated operating revenue of 2.098 billion yuan, up 8.43% year over year; net profit attributable to shareholders of listed companies was approximately 335 million yuan, up 161.63% year over year, successfully reversing the downturn in net profit in 2024.

This year, Junxing Mushroom Industry’s button mushroom base project in Hubei—Hubei Junxing—achieved full production. The revenue contribution from button mushrooms rose to 59.49%, for the first time nearing six-tenths, becoming one of the company’s most core profit engines. At the same time, the enoki business also turned profitable, with gross margin rebounding sharply from 4.97% in 2024 to 16.88%.

What needs attention is that behind the strong earnings growth, Junxing Mushroom Industry still faces challenges such as fluctuations in raw material prices, cyclical fluctuations in product prices, and uncertainty in nurturing new businesses.

On March 23, Junxing Mushroom Industry’s stock price fell immediately at the open and then hit the daily limit down at the close. The stock closed at 17.33 yuan per share on the day, with a daily decline of 9.97%. The company’s total market value was approximately 6.815 billion yuan. As of the close on March 24 midday, Junxing Mushroom Industry’s current stock price was 16.38 yuan per share, down 5.48%, and its total market value was approximately 6.441 billion yuan.

Button Mushroom Business Overtakes Enoki

Revenue Share Nearly Six-Tenths, Gross Margin 36.74%

In 2025, Junxing Mushroom Industry achieved operating revenue of approximately 2.098 billion yuan, up 8.43%; net profit attributable to shareholders of listed companies was approximately 335 million yuan, up 161.63%; and net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was approximately 304 million yuan, up 231.50%.

By the end of 2025, Junxing Mushroom Industry’s total assets were approximately 7.089 billion yuan, up 14.51% from the beginning of the year; net assets attributable to shareholders of listed companies were approximately 3.526 billion yuan, up 6.29% from the beginning of the year.

Compared with the growth rate of performance in 2024 (operating revenue up 0.21% year over year, and net profit attributable to shareholders of listed companies down 19.77% year over year), Junxing Mushroom Industry’s 2025 performance can be described as a “strong rebound,” mainly benefiting from the “industry stabilization and rebound in edible fungi.”

In a research report, Northeast Securities noted that in the second half of 2025, the enoki mushroom industry ended nearly three years of adjustment and entered a stage of price stabilization and rebound, which drove a restoration of industry profitability. According to Ganglian data, in the first half of 2025, the average enoki mushroom price in Beijing Xinfadi market was 4.3 yuan, down 13.2% year over year, while in the second half of 2025 the average price was 6.4 yuan, up 18.1% year over year, leading to a significant improvement in industry gross margins.

On the other hand, Junxing Mushroom Industry has also been continuously optimizing its product mix and capacity layout. “Our button mushroom base in Hubei Junxing project achieved full production, further increasing the market share of button mushroom products. Coupled with steadier-to-higher product selling prices, button mushroom products have continued to become one of the company’s main profit sources.” Junxing Mushroom Industry said.

The financial report shows that in 2025, Junxing Mushroom Industry’s enoki mushrooms generated operating revenue of approximately 812 million yuan, accounting for 38.7% of the company’s total revenue; button mushrooms generated operating revenue of approximately 1.248 billion yuan, accounting for 59.49% of the company’s total revenue. In addition, there are other segments such as North Chongcao, Winter Worm Herb (ecological factory breeding), leasing, and others, totaling 1.81% of total revenue.

Junxing Mushroom Industry used to be known as a “major enoki supplier,” but now the revenue contribution of button mushrooms has already surpassed that of enoki. A reporter from XinJing News and Shell Finance who reviewed annual reports over the years found that Junxing Mushroom Industry’s cultivation product development strategy saw a clear change in its 2021 annual report—from “enoki mushrooms as the main focus, with coordinated development of multiple varieties” to “enoki mushrooms and button mushrooms as the main focus, with coordinated development of multiple varieties.”

Junxing Mushroom Industry’s breakdown of revenue contribution by main business. Yan Xia, reporter from XinJing News and Shell Finance. Data visualization

In 2023, the revenue share of button mushrooms first exceeded that of enoki mushrooms.

What is worth noting is that the gross margin of button mushrooms is clearly higher than that of enoki. In 2025, Junxing Mushroom Industry’s enoki mushrooms had a gross margin of 16.88%, while button mushrooms had a gross margin of 36.74%.

In its 2026 operating plan, Junxing Mushroom Industry said it will speed up project construction to ensure that Jiangsu Junxing’s “Lianshui Edible Fungi Industrial Park Project” and Anhui Junxing Phase II’s “Annual 20,000 Tons Button Mushroom Straw Comprehensive Utilization Expansion Project” are put into operation on schedule. It will focus on core businesses, accelerate the increase of button mushroom products’ market share, and further enhance market penetration.

The Cordyceps Business Has Not Really Taken Off Yet

Total Liabilities Rise to 3.5 Billion

Along with the impressive 2025 performance, there are also concerns such as the company’s rising liabilities.

From financial data, Junxing Mushroom Industry’s asset-liability ratio increased from 46.39% in 2024 to 50.14% in 2025, and its total liabilities also rose from 2.872 billion yuan at the end of 2024 to 3.555 billion yuan at the end of 2025. However, the company’s monetary funds are also increasing, and overall, financial risks are controllable.

From a business perspective, Junxing Mushroom Industry’s product prices are influenced by multiple factors including industry cycles, policy orientation, consumption concepts, individual consumer preferences, product quality, and others, creating a risk of price fluctuations. Because the selling prices of some products fluctuate more, there is also a risk of fluctuations in operating profit.

The main raw materials used in Junxing Mushroom Industry’s edible fungi production include rice bran, corn cobs, wheat bran, cottonseed hulls, wheat straw, chicken manure, and others. Currently, the consumption volumes of corn cobs, rice bran, wheat straw, and chicken manure are relatively large. This means that fluctuations in the prices of major raw materials will have some impact on the company’s production and operations.

In addition, in recent years, Junxing Mushroom Industry has increased its layout and investment in the ecological factory-breeding business for Winter Worm Herb. However, the ecological factory-breeding business for Winter Worm Herb is affected by multiple factors such as policies, industry cycles, the market environment, and government approvals, so there may be risks including change, delay, suspension, or termination. At the same time, during future operations of the project, there may be technical risks, operational management risks, corporate governance risks, force majeure risks, risks related to consumer preferences, and other unforeseen risks, creating a risk that the company’s investment returns may not meet expectations. As the ecological factory-breeding projects for Winter Worm Herb are completed and put into production one after another, the products will gradually enter the market, and new products will be launched, bringing risks such as product risks and sales channel risks.

In its 2026 operating plan, Junxing Mushroom Industry said it will ensure that the Qing Shui Junxing and Xinxiang Junxing ecological factory-breeding projects for Winter Worm Herb are put into operation on schedule, to help the company develop product diversification and improve its ability to withstand risks.

XinJing News Shell Finance reporter Yan Xia. Edited by Chen Li. Proofread by Wang Xin