Market Overview - The Hong Kong stock market indices continued to decline in the afternoon, with the Hang Seng Tech Index dropping over 3.1% at one point, ultimately closing down 2.72%, marking five consecutive days of decline [1] - The Hang Seng Index and the State-Owned Enterprises Index saw slight increases of 1.36% and 1.18%, respectively [1] Sector Performance - Major technology stocks experienced widespread declines, with Alibaba and JD.com falling nearly 3%, and Baidu down 2% [2] - The automotive sector faced significant pressure, with July retail sales of narrow passenger vehicles reportedly down over 11% month-on-month, leading to increased selling in automotive stocks [2] - Semiconductor stocks underperformed throughout the day, with leading company SMIC dropping nearly 6% [2] - Biopharmaceutical stocks, which had been rising, saw a correction [2] - Oil prices rebounded to around $70 due to geopolitical tensions, benefiting oil stocks, with China Petroleum rising nearly 4% [2] - The "three-child" concept stocks gained momentum, while coal, electricity, and steel sectors showed relative activity as part of the "anti-involution" theme [2] Notable Stock Movements - Li Auto saw a significant drop of over 12%, while other major players like BYD, Xpeng, and NIO fell over 5% [4][9] - Semiconductor stocks led the declines, with SMIC down over 6% and other semiconductor companies also experiencing losses [5][6] - Apple-related stocks declined, with GoerTek falling over 5% and other related companies like Sunny Optical and BYD Electronics also down [7][8] - Oil stocks rose, with China Petroleum and Sinopec both increasing by over 3% [10][11] - The "three-child" concept stocks performed well, with H&H International Holdings rising over 11% [12][13] Capital Flows - Southbound funds recorded a net inflow of HKD 11.714 billion, with the Shanghai-Hong Kong Stock Connect contributing HKD 6.427 billion and the Shenzhen-Hong Kong Stock Connect contributing HKD 5.287 billion [20] Market Outlook - Analysts suggest that the Hong Kong market may continue to experience a gradual recovery driven by fundamental factors, with a focus on the Hang Seng Tech Index, biopharmaceuticals, and AI concepts [22]

| Corporate Information | 2 | Directors and Senior Management | 69 | | --- | --- | --- | --- | | 公司資料 | | 董事及高級管理人員 | | | Corporate Profile | 5 | Report of the Directors | 79 | | 公司簡介 | | 董事會報告 | | | Corporate Culture | 7 | Independent Auditor's Report | 100 | | 企業文化 | | 獨立核數師報告 | | | Spirit of Want Want | 10 | Consolidated Balance Sheet | 105 | | 旺旺精神 | | 綜合資產負債表 | | | Financial Highlights | 12 | Consolidated Income Statement | 107 | | 財務摘要 | | 綜合收益表 | | | Financial Summary | 13 | Consolidated Statement of ...

Core Viewpoint - China Wangwang has reported a decline in revenue for the 2024 fiscal year, primarily due to adverse weather conditions affecting its snack food categories, while its dairy and beverage segment shows only slight growth amidst increasing market competition [3][4][7]. Revenue Performance - For the 2024 fiscal year, China Wangwang achieved a revenue of approximately 23.511 billion yuan, reflecting a slight decrease of 0.3% year-on-year, while the profit attributable to equity holders increased by 8.6% to 4.336 billion yuan [7][8]. - The decline in revenue is attributed to the ice cream and rice snacks categories, which experienced low double-digit and high single-digit declines, respectively, due to extreme weather and market conditions [8][15]. Business Segments - The dairy and beverage segment, which constitutes a significant portion of the company's revenue, saw a minor increase of 1.28% to 12.109 billion yuan, while other product categories like rice snacks and leisure foods experienced declines of 1.22%, 2.60%, and 8.55% respectively [15][19]. - The company has initiated internal restructuring and product-focused divisions to enhance channel collaboration and overall operational efficiency, resulting in a low single-digit revenue growth in the second half of the fiscal year [8][9]. Profitability - The gross profit margin for the 2024 fiscal year reached 47.6%, an increase of 1 percentage point year-on-year, driven by a decrease in the unit cost of raw materials and packaging [9][10]. - The net profit margin attributable to equity holders rose to 18.4%, reflecting a 1.5 percentage point increase year-on-year, aided by effective cost control and reduced financing costs [10]. Brand Challenges - The iconic Wangzai milk product faces challenges in connecting with younger consumers, as the brand has not significantly evolved to meet the preferences of the Z generation [16][21]. - The market share of Wangzai milk has been eroded due to increased competition from fresh and low-temperature dairy products, with the flavored milk market size declining from 102.6 billion yuan in 2014 to 60.4 billion yuan in 2020 [21][22]. Brand Revitalization Efforts - The company is focusing on brand rejuvenation through IP modernization and product innovation to engage younger consumers and combat brand aging [26][35]. - Initiatives include enhancing the Wangzai character's image and expanding into creative industries, such as merchandise and themed stores, to resonate with the younger demographic [31][34].

Core Viewpoint - The company is facing significant challenges, with revenue stagnation and a lack of new growth drivers, indicating a potential "mid-life crisis" for the brand [3][11]. Financial Performance - For the fiscal year 2024, the company reported revenue of 23.511 billion yuan, a slight decrease of 0.3% year-on-year; net profit was 4.336 billion yuan, an increase of 8.6% [3][8]. - The decline in revenue is attributed to adverse weather conditions affecting ice cream and rice snacks, with revenues dropping in the "low double digits" and "high single digits," respectively [8][10]. - The company’s market share in the snack industry is low, with the top five companies only holding 5.9% of the market, and the company ranked fifth with retail sales of 1.348 billion yuan [8]. Historical Context - The company experienced rapid growth from 2004 to 2013, with revenue growth rates around 20%, peaking with a market capitalization exceeding 170 billion HKD [8][9]. - Since then, the company has struggled to maintain growth, with its market capitalization shrinking to 62.5 billion HKD, less than 40% of its peak value [9]. Business Composition - The beverage segment is crucial, contributing 52% of total revenue, with the flagship product, Wangzai Milk, showing only "low single-digit" growth [10]. - The rice snacks and leisure food segments also faced declines, with rice snacks revenue down 1.2% and leisure foods down 2.6% due to poor sales during the Spring Festival [10]. Industry Dynamics - The snack industry in China is characterized by a large market size but low concentration, with many private label products competing against established brands [8][12]. - The rise of e-commerce and new retail formats has disrupted traditional sales channels, with the company lagging in adapting to these changes [13][14]. - The shift in consumer preferences towards health, value, and emotional connection with products has created additional challenges for the company [14]. Distribution Challenges - The company relies heavily on traditional wholesale markets, with about 80% of its revenue coming from these channels, while new channels like e-commerce are only beginning to gain traction [13]. - Distributors are facing increasing pressure from manufacturers to meet high sales targets, leading to issues with high inventory and low profit margins [15].

Core Viewpoint - The company is expected to continue expanding its profitability in FY24, driven by internal organizational reforms and strong momentum in emerging channels and overseas markets [1] Financial Performance - For FY24, the company's revenue decreased by 0.32% year-on-year, primarily due to the underperformance of ice cream and rice snacks [2] - Gross margin increased by 0.99 percentage points year-on-year, mainly due to lower costs of raw materials and packaging [2] - The net profit margin improved by 1.52 percentage points to 18.41%, with net profit increasing by 8.67% year-on-year [2] - The dividend payout ratio for FY24 was 39.8%, significantly lower than the average level from FY21 to FY23 [2] Product Performance - Dairy beverages saw a revenue increase of 1.3% year-on-year, with a gross margin improvement of 1.2 percentage points, showing a clear recovery in the second half of the fiscal year [2] - Rice snacks experienced a revenue decline of 1.2% year-on-year, with a gross margin decrease of 1.9 percentage points, mainly due to the impact of gift packages and changes in product structure [2] - Snack food revenue decreased by 2.6% year-on-year, but gross margin increased by 0.5 percentage points, with ice cream showing a decline in the first half but achieving rapid growth in the second half [2] Organizational Changes and Market Strategy - In the second half of FY24, the company initiated internal organizational reforms, establishing product-specific divisions to enhance channel collaboration and manage domestic and international operations [3] - The company deepened cooperation with leading snack retailers, with revenue from snack retailers accounting for about 10% [3] - Emerging channels experienced double-digit growth year-on-year, with revenue contribution approaching 10% [3] - Overseas revenue grew by double digits year-on-year, with significant growth in markets such as Japan, North America, and parts of Southeast Asia [3]

股票研究 /[Table_Date] 2025.06.26 盈利维持扩张，股利支付率下行 中国旺旺(0151) 中国旺旺（0151）24 财年业绩点评 报告副标题 | [table_Authors] 訾猛(分析师) | 颜慧菁(分析师) | 张宇轩(分析师) | [当前价格 Table_CurPrice] (港元)： | 5.31 | | --- | --- | --- | --- | --- | | 021-38676666 | 021-38676666 | 021-38676666 | | | | 登记编号 S0880513120002 | S0880525040022 | S0880525040039 | [Table_Market] 交易数据 | | 本报告导读： 公司 FY24 盈利能力持续扩张。下半财年公司启动内部组织改革进一步协同渠道发 展——新兴渠道&海外市场动能充沛。维持增持评级。 投资要点： 股 票 研 究 海 外 公 司 （ 中 国 香 港 证 券 研 究 报 告 请务必阅读正文之后的免责条款部分 ） [Table_Industry] 食品饮料 [Table_Invest] 评级： 增持 ...

Core Viewpoint - The company is facing significant challenges, with revenue stagnation and a lack of new growth drivers, indicating a "mid-life crisis" for the brand [1][5][6] Financial Performance - For the fiscal year 2024, the company reported revenue of 23.511 billion yuan, a slight decrease of 0.3% year-on-year; net profit was 4.336 billion yuan, an increase of 8.6% [2][3] - The revenue decline is attributed to poor performance in ice cream and rice snacks due to extreme weather and a challenging consumer environment [2][4] - The company’s market share in the snack industry is only 5.9%, ranking fifth with retail sales of 1.348 billion yuan [2][3] Business Challenges - The company has struggled to innovate and adapt to changing market dynamics, leading to stagnation in revenue and profit over the past decade [3][6] - The reliance on traditional sales channels is evident, with about 80% of revenue coming from conventional wholesale and modern retail channels, while emerging channels like e-commerce are underrepresented [7][8] - The company’s flagship product, Wangzai Milk, has seen only low single-digit growth, highlighting the challenges in driving significant sales growth [3][4] Market Dynamics - The snack industry in China is characterized by a large market size but low concentration, with many private label products competing against established brands [2][6] - The rise of new competitors and changing consumer preferences, particularly among Gen Z, have created additional pressure on traditional brands like the company [7][9] - The company’s historical marketing strategies are becoming less effective in the current consumer landscape, necessitating a comprehensive restructuring of its supply chain and brand value [9]

Core Viewpoint - The company reported FY2024 results that met market expectations, with a slight decline in revenue but an increase in net profit, indicating resilience in a weak demand environment [1][2]. Financial Performance - FY2024 revenue was 23.51 billion, down 0.3% year-on-year, while net profit was 4.34 billion, up 8.6% year-on-year [1]. - In 2HFY24, revenue reached 12.63 billion, an increase of 2.6% year-on-year, and net profit was 2.47 billion, up 9.5% year-on-year [1]. - The gross margin improved by 1 percentage point year-on-year, benefiting from lower raw material prices [2]. - The net profit margin increased by 1.5 percentage points to 18.4% due to reduced financial expenses and effective tax rate [2]. Revenue Breakdown - Revenue performance by category for FY2024 showed declines in rice snacks (-1.2%) and leisure products (-2.6%), while dairy products saw a slight increase (+1.3%) [1]. - The company achieved low single-digit growth in revenue for rice snacks, driven by the launch of sub-brands [1]. - Emerging channels and overseas markets contributed to double-digit revenue growth, with sales from the snack wholesale channel increasing to approximately 10% of total sales [1]. Future Outlook - For FY2025, revenue is expected to grow steadily, with profit margins likely to remain stable [2]. - The company has implemented organizational changes to enhance marketing strategies and expand channels, which may positively impact future performance [2]. - The company anticipates stable growth across various product categories, supported by inventory management and reduced promotional spending [2]. Valuation and Estimates - The company is trading at 12.8/12.0 times FY2025/2026 P/E ratios [3]. - FY2025 profit forecast has been raised by 5.2% to 4.5 billion, with FY2026 forecast introduced at 4.7 billion [3]. - The target price has been increased by 10% to 5.8 HKD, reflecting an upward valuation trend [3].

Core Insights - China Wangwang Holdings Limited reported a slight revenue decline of 0.3% year-on-year for the fiscal year 2024, with total revenue reaching 23.51 billion yuan, while net profit attributable to shareholders increased by 8.6% to 4.34 billion yuan [1] - The company’s overall gross margin stood at 47.6%, with the dairy and beverage segment being the core business, achieving a revenue growth of 1.3% to 12.11 billion yuan [1][3] Revenue Breakdown - The dairy and beverage segment saw a low single-digit growth, with Wangzai milk experiencing low unit growth and beverages achieving double-digit growth [1] - The rice snack segment reported a revenue of 5.90 billion yuan, down 1.2% year-on-year, affected by weak demand for gift packages during the Spring Festival [1] - The snack food segment experienced a revenue decline of 2.6% to 5.36 billion yuan, primarily due to a slowdown in ice cream sales [2] Market Expansion and Strategy - China Wangwang is focusing on emerging channels such as content e-commerce and social e-commerce, with double-digit revenue growth in overseas markets, particularly in Japan, North America, and parts of Southeast Asia [2] - The company is enhancing its organizational agility to respond quickly to market changes and is actively developing new products to increase consumer engagement [2] - The company plans to invest 705 million New Taiwan dollars in purchasing property in Kaohsiung, Taiwan, to support its production capabilities [3][4] Future Outlook - Analysts expect stable revenue growth for the fiscal year 2025, with profit margins remaining stable due to the company’s organizational changes and expansion into new channels [3] - The overseas market is anticipated to be a key growth driver, supported by localized marketing strategies and the establishment of overseas production bases [3]

Core Viewpoint - China Wangwang reported a slight decline in revenue for the fiscal year 2024, but a significant increase in net profit, driven by OEM business growth and snack sales [1] Group 1: Financial Performance - Revenue for fiscal year 2024 was 23.51 billion yuan, a slight decrease of 0.3% year-on-year [1] - Net profit attributable to shareholders increased by 8.6% to 4.34 billion yuan [1] - Gross margin improved by 1 percentage point to 47.6% due to a decrease in raw material and packaging costs [1] Group 2: Business Segments - The OEM business experienced double-digit growth year-on-year, becoming a key growth driver for the company [1] - Snack sales contributed approximately 10% to total revenue for fiscal year 2024, with successful collaborations such as the partnership with Zhao Yiming [1] - Revenue from dairy and beverage segments grew by 1.3% to 12.11 billion yuan, benefiting from multi-channel growth [1] - Rice snacks revenue slightly declined by 1.2% to 5.9 billion yuan, with low single-digit growth when excluding gift package factors [1] Group 3: Strategic Moves - The company has been closing factories since 2023 to reduce its own production capacity due to overcapacity issues [1] - In September 2024, China Wangwang purchased an aircraft for 19.4 million USD from a company controlled by its chairman [1] - In June 2024, the company spent 710 million New Taiwan dollars to acquire land and property from the chairman, citing the need for larger storage facilities [1] - The company is diversifying its investments, including the establishment of an industrial fund with CICC Capital and a 500 million yuan investment to restart the "Shenwang Hotel" project, expected to open in 2027 [1]