(Yicai) July 16 -- Shares of Sanyuan Biotechnology, the world’s largest erythritol producer, climbed today despite a preliminary US ruling to impose a steep anti-dumping duty of nearly 451 percent on its exports of the low-calorie sweetener.

Sanyuan [SHE: 301206] closed 1 percent higher at CNY29.68 (USD4.10) in Shenzhen, shrugging off news that could significantly hamper its sales in the US market. The stock slipped 2.6 percent yesterday, the very first day after the ruling. Although shares plunged more than 20 percent after the investigation began in mid-December, they have since rebounded to prior levels.

The US Department of Commerce issued a preliminary ruling in its investigation into whether Chinese erythritol producers are selling their products below fair market value in the US, imposing a 450.64 percent anti-dumping duty on Sanyuan’s products, the Shandong province-based firm announced yesterday.

Erythritol is a naturally derived, low-calorie sugar alcohol widely used in baking, beverages, and health supplements. China is the world’s largest producer of erythritol, and Sanyuan dominates with a domestic market share exceeding 50 percent and a global share between 25 and 35 percent.

Sanyuan acknowledged that the ruling will likely impact its US sales but said it is pivoting to reduce reliance on the American market. The company is expanding its footprint in domestic and emerging markets, including Southeast Asia, India, and the Middle East. It is also accelerating the development of new products to cushion potential losses.

The US is not the only market to take action. In January, the European Commission imposed a five-year, 157 percent anti-dumping duty on Sanyuan’s erythritol, also citing unfair pricing.

Erythritol is Sanyuan’s largest revenue contributor, generating CNY515 million (USD71.7 million) last year, or roughly 72 percent of total revenue. However, it is also the least profitable among the firm's five core products -- which include allulose and stevia -- with a gross margin of just 8.3 percent, according to its latest annual report.

Editor: Emmi Laine