Core Viewpoint - Wangwang, a well-known national brand, is struggling to keep up with the evolving market and consumer preferences, facing challenges from emerging food brands and a decline in its traditional product appeal [1][9]. Group 1: Marketing Issues - Wangwang has been penalized for false advertising, with a recent fine of 15,300 yuan for misleading claims about its high-calcium milk product [3][5]. - The company has a history of marketing failures, including past violations of advertising laws and misleading claims about product ingredients [6][7]. - Marketing strategies have not resonated with modern consumers, leading to ineffective campaigns that fail to attract new customer interest [10][12]. Group 2: Product and Innovation Challenges - Wangwang's flagship products, such as Wangzai milk, have not seen innovation in years, resulting in declining sales as consumer preferences shift towards healthier options [9][14]. - Despite attempts to launch new brands and products targeting different demographics, the reception has been lukewarm, indicating a lack of genuine innovation [10][12]. - The company has struggled to adapt to the online sales environment, missing out on significant e-commerce opportunities [11][12]. Group 3: Financial Performance - Recent financial results show a decline in revenue and profit, with a 4.83% drop in revenue to 10.833 billion yuan and a 23.6% decrease in net profit to 1.596 billion yuan for the first half of the 2022 fiscal year [13][14]. - The gross profit margin has been on a downward trend, falling from 48.05% in 2019 to 42.82% in the first half of 2022 [14]. - Analysts have expressed concerns about Wangwang's future performance, with several institutions lowering their target prices and profit forecasts due to challenging sales prospects [15].

Group 1 - Wangwang's sub-brand Bond Coffee opened its first offline store in Shanghai on August 8, 2023, located near the Guilin Road subway station [2] - The store design incorporates green from coffee beans as the brand color, and the product features a unique coffee made from discarded coffee fruit peels, which is low in caffeine and suitable for caffeine-sensitive consumers [2] - Bond Coffee, established in 1998, has seen steady sales growth for six consecutive years since being acquired by Wangwang in 2018, with plans to open 100 stores in three years [2] Group 2 - Many luxury brands, including MIKIMOTO, Dior, and Louis Vuitton, have entered the coffee industry, primarily for brand exposure and customer engagement [3] - Wangwang's recent financial performance shows positive growth, but it has not yet returned to the revenue and profit levels of its peak in 2013, indicating a need for new growth avenues [3] - The coffee industry has shown signs of fatigue in 2023, with a decline in the number of new store openings among chain coffee brands, reflecting a downward trend in the market [3][4] Group 3 - The coffee market is experiencing a "survival of the fittest" scenario, with several chain coffee brands closing numerous stores, indicating increased competition and challenges for new entrants like Wangwang [4]

Core Insights - The FBIF Food Innovation Expo 2025 showcased over 700 exhibitors across various sectors, including dairy, beverages, snacks, and functional foods, covering an exhibition area of over 62,000 square meters [1][2][4] - The event attracted more than 39,000 visitors from over 6,500 companies, with over 35% of attendees being senior management [3][4] Group 1: Event Overview - The FBIF Food Innovation Expo serves as a professional platform for food companies to showcase innovations and connect with industry leaders [1] - The exhibition featured three main areas: Hall 4.2, Hall 5.2, and Hall 6.2, facilitating efficient connections across the supply chain [1][2] Group 2: Audience and Exhibitor Feedback - The audience comprised over 39,000 visitors, with 13,975 senior management personnel, accounting for 35.67% of the total [3] - Exhibitors reported high-quality interactions, with many expressing intentions to secure booths for the next year [4][5] Group 3: Media Coverage - The event received extensive media coverage, with participation from 88 mainstream and industry-specific media outlets, including major platforms like CCTV and Xinhua [7] - Influencers and bloggers shared content across social media platforms, enhancing the event's visibility [13] Group 4: Best Booth Awards - The awards recognized outstanding booth designs, with categories such as Best Overall Booth, Best Visual Impact, and Best Cultural Feature [18][19][21] - Notable winners included Yili for Best Overall Booth and Wangwang for Most Popular Booth, showcasing innovative and engaging designs [19][24] Group 5: Exclusive Activities - The event featured exclusive activities like the FBiF Channel Matching Conference and Foodtalks Salon, which facilitated networking and knowledge sharing among industry professionals [74][106] - The FBiF Channel Matching Conference attracted 1,207 suppliers, focusing on specialized content and enhanced visitor experience [74][75] Group 6: Global New Product Showcase - The FBiF Global New Product Collection highlighted over 650 innovative food products, with top selections including unique beverages and snacks that captured audience interest [140][142] - Products like the HPP Cold Brew Tea and the TAKEO Cricket Rice Cake stood out for their creativity and appeal [142][159] Group 7: Creative Packaging Showcase - The FBiF Global Creative Packaging Collection featured 160 innovative packaging designs from 30 countries, emphasizing sustainability and aesthetic appeal [162][166] - Noteworthy designs included edible packaging and unique cultural representations, attracting significant attention from attendees [166][171]

Investment Rating - The report assigns a "Buy" rating for the company [9]. Core Insights - The company has a solid industry leadership position, with a focus on product innovation and channel reform to drive growth. The financial performance shows a stable revenue increase and a rebound in profitability, supported by effective cost management and expansion into overseas markets [4][9]. Financial Summary - For FY2023, the company reported revenue of 23,586.33 million CNY, with a year-on-year growth of 2.87%. The net profit attributable to the parent company was 3,990.47 million CNY, reflecting an 18.36% increase from the previous year. The earnings per share (EPS) for FY2023 was 0.34 CNY, with a price-to-earnings (PE) ratio of 12.88 and a price-to-book (PB) ratio of 3.13 [2][4]. Business Performance - The company has shown a compound annual growth rate (CAGR) of 2.55% in revenue and 4.21% in net profit from FY2017 to FY2023. The gross profit margin for FY2023 was 46.60%, and the return on equity (ROE) was 25.73% [4][36]. Market Trends - The report highlights a shift towards health-oriented products, with significant growth in the health snack segment, which is expected to grow at a CAGR of 7.20%. The company is also expanding its presence in e-commerce and overseas markets, which are projected to contribute to future revenue growth [3][4]. Product and Channel Strategy - The company is focusing on product innovation, with a strong emphasis on health and wellness trends. It is also reforming its distribution channels to enhance efficiency and reach, including a significant push into e-commerce and international markets [3][4][9].

Group 1 - Wangwang invested RMB 138 million in a business jet to facilitate management's domestic and international travel, with a focus on expanding overseas operations [1] - In the fiscal year 2023, Wangwang's overseas business grew by double digits, with snack revenue reaching RMB 5.977 billion, accounting for approximately 20% of total revenue [1] - Southeast Asia has become a primary target for Chinese snack brands due to its large population and cultural similarities, with many brands already establishing a presence in the region [2][5] Group 2 - Companies like Qiaqia, Jinzhai, and Panpan have successfully penetrated the Southeast Asian market, with Qiaqia's Thailand subsidiary contributing RMB 400 million in revenue and nearly RMB 90 million in net profit in 2023 [2] - The Southeast Asian snack market is projected to reach USD 13.1 billion by 2029, with a compound annual growth rate of 10.60% [3] Group 3 - Salted snacks and other unique Chinese products are gaining traction in Southeast Asia, with brands like Yanjin and Qiaqia focusing on local market education to introduce their products [11][12] - The entry strategies of Chinese snack brands vary by country, with some targeting mature markets like Thailand and Singapore, while others focus on emerging markets like Vietnam and Indonesia [11] Group 4 - The retail landscape in Southeast Asia is diverse, with traditional community stores still dominating in Indonesia, where 80% of consumption occurs outside modern retail channels [17] - Successful market entry often relies on innovative channel strategies, as demonstrated by the ice cream brand Aice, which focused on community stores rather than traditional retail [14] Group 5 - Compliance with local regulations is crucial for market entry, with specific requirements for product certification and labeling in countries like Thailand and Indonesia [27] - Localization of products and supply chains is essential for success, with brands adapting flavors and ingredients to meet local preferences [28][31]

Core Viewpoint - The rise of online shopping and live-streaming sales has significantly transformed consumer behavior and retail dynamics, leading to challenges for traditional brick-and-mortar stores [1][3]. Group 1: Industry Transformation - Online shopping has made it possible for consumers to purchase a wide variety of goods from home, contributing to the decline of physical retail stores, many of which have closed or transitioned to online platforms [3]. - Despite the convenience of online shopping, there remains a unique enjoyment in visiting supermarkets, which offer a sensory experience and a break from the high-intensity work life [3][5]. Group 2: Company Background - Wangwang Group, originally established as Yilan Food Industry Co., Ltd. in 1962, has evolved into a significant player in the snack food market, particularly known for its iconic products like Wangzai milk and various snacks [9][7]. - The company was founded by Cai Zhangshi and later transformed by his son, Cai Yanming, who took over management at a young age and aimed to shift the company from a low-margin OEM model to developing its own brand [9][10][12]. Group 3: Business Strategy and Growth - After initial struggles with product development and market fit, Cai Yanming successfully pivoted the company towards producing rice crackers, which became a key product and led to the rebranding as Wangwang Group [24][22]. - The opening of the Chinese market during the reform era provided a significant opportunity for Wangwang Group, allowing it to become the first Taiwanese company to register a trademark in mainland China and rapidly expand its operations [26][28]. - The company's strategic expansion into mainland China has resulted in substantial growth, establishing it as a leading food company in Asia and contributing to Cai Yanming's status as a wealthy entrepreneur [28][29]. Group 4: Current Position and Philosophy - Today, Wangwang Group continues to innovate and develop new products, maintaining a strong market presence and consumer loyalty [29]. - Cai Yanming emphasizes a commitment to being a responsible and patriotic entrepreneur, aligning the company's values with a broader national identity [31].

Core Viewpoint - The financial reports of major food and beverage companies in China for 2024 show modest revenue growth, indicating a competitive landscape where established players are adapting to market changes and consumer preferences [1][4][9]. Group 1: Revenue Performance - Unified Enterprises China reported total revenue of 30.332 billion yuan, a year-on-year increase of 6.1% [1]. - Nongfu Spring's total revenue reached 42.896 billion yuan, growing by 0.5% year-on-year [1]. - Master Kong's revenue was 80.651 billion yuan, with a growth of 0.3% [1]. - China Foods reported 41.492 billion yuan in revenue, up 0.21% year-on-year [1]. - Haitian Flavoring's revenue was 26.901 billion yuan, reflecting a 9.53% increase [1]. - The revenue growth of these companies translates to significant absolute increases, with Unified Enterprises China adding 1.741 billion yuan, Master Kong adding 233 million yuan, and Nongfu Spring adding 229 million yuan compared to 2023 [1]. Group 2: Business Adaptation - Nongfu Spring experienced a 21.3% decline in its core bottled water segment, which dropped from 47.5% to 37.2% of total revenue, while its tea beverage segment grew by 32.3%, increasing its share from 29.7% to 39% [3][4]. - The shift in revenue sources illustrates how companies like Nongfu Spring are adapting to market fluctuations by reallocating resources to more profitable segments [3][4]. Group 3: Industry Trends - Companies with annual revenues exceeding 20 billion yuan are increasingly diversifying their business lines to maintain growth and fend off competition [4][5]. - The average revenue of companies in this category is significant, with the 500th ranked company on the China Private Enterprises 500 list having a revenue of 26.3 billion yuan [5]. - The historical context shows that these companies have evolved over decades, adapting to market changes and consumer demands, which has allowed them to emerge as industry leaders [5][6]. Group 4: Growth Strategies - The transition from "quantity" to "quality" in the consumer market from 2013 to 2024 highlights the need for companies to innovate and adapt to changing consumer preferences [8][9]. - The overall revenue of major food and beverage companies has shown slight fluctuations but maintains a growth trend, indicating resilience in the face of market challenges [9][10]. Group 5: Long-term Growth Metrics - The compound annual growth rate (CAGR) for major companies from 2013 to 2023 shows varied performance, with Nongfu Spring leading at 15.39% and others like Wahaha and China Wangwang showing negative growth [17][19]. - The average CAGR for the 14 companies analyzed is 6.48%, comparable to global top-tier companies during the same period [19][20]. Group 6: Market Expansion - Companies are increasingly looking to international markets for growth, with Wan Zhou International's acquisition of Smithfield Foods exemplifying a successful global expansion strategy [63]. - Mengniu's acquisition of the Southeast Asian ice cream brand Aice demonstrates the potential for growth in international markets [64].

Investment Rating - The report indicates a positive investment outlook for the Chinese snack industry, highlighting a "golden period" characterized by simultaneous growth in volume and price, driven by health, scenario-based consumption, and digitalization [2][6]. Core Insights - The Chinese snack industry is experiencing a "volume and price increase" phase, with a steady market growth trajectory. The market size is projected to reach 1.4 trillion RMB by 2024, recovering from a growth rate slump during 2020-2022, which saw a mere 0.8% increase in 2022 [2][6]. - The current market structure is layered into three segments: foundational categories supporting the market, emerging categories breaking through, and long-tail categories gaining momentum. Traditional giants are urged to seek high-end upgrades, while new entrants should focus on health transformation [9][12]. - The market is characterized by a "strong head, weak long tail" dynamic in 2023, necessitating traditional categories to innovate through scenarios to extend their lifecycle, while health-focused niches present structural opportunities [2][9]. - Offline channels dominate the snack distribution landscape, with hypermarkets accounting for over 40% of the market share, supermarkets around 24%, and e-commerce channels approximately 20%, which is gradually declining [2][26]. Summary by Sections Current Status of the Snack Industry - The snack industry is undergoing a channel transformation that is generating new growth opportunities. The rise of hypermarkets is particularly noteworthy, as they leverage high turnover efficiency to offer competitive pricing [6][34]. Channel Transformation - The report outlines a significant shift in the snack sales channels over the years, evolving from traditional distribution networks to large chain stores, and now to hypermarket sales models. This transformation is expected to continue, with hypermarkets projected to reach a market size of 1,040 billion RMB by 2024 [25][26]. Analysis of Representative Companies - **Mingming Hen Mang**: Following a merger, the brand's sales are expected to surge from 23.865 billion RMB in 2023 to 55.5 billion RMB in 2024, marking a growth of over 130%. The company serves approximately 5.9 million consumers daily [2][56]. - **China Wangwang**: The company faces challenges with its core product, Wangzai Milk, which accounts for 90% of its revenue in the dairy segment. The revenue for the first half of 2024 is projected to decline by 1.6% year-on-year [2][60]. - **Three Squirrels**: The company has seen a decline in revenue from 9.79 billion RMB in 2020 to 7.12 billion RMB in 2023, primarily due to the fading e-commerce boom and high costs of offline expansion. However, a recovery is anticipated in 2024 with a projected revenue of 10.2 to 10.8 billion RMB, driven by a strategy focused on high-end value and omnichannel sales [2][64].

Revenue Performance - Revenue for the six months ended September 30, 2024, was RMB 10,876,637, a decrease of 3.5% compared to RMB 11,274,818 for the same period in 2023[19]. - In the first half of FY2024, the Group's total revenue declined by 3.5% year-on-year to RMB 10,876.6 million, primarily due to a decrease in revenue from the popsicles sub-category under the snack foods segment[24]. - For the first half of FY2024, the Group's total revenue declined by 3.5% to RMB10,876.6 million, with dairy products and beverages accounting for approximately 55% and rice crackers and snack foods for about 44% of total revenue[39][43]. - For the six months ended September 30, 2024, the Group's total revenue reached RMB 10,876,637,000, with segment revenues of RMB 2,057,382,000 from rice crackers, RMB 6,009,418,000 from dairy products and beverages, RMB 2,730,970,000 from snack foods, and RMB 78,867,000 from other products[199]. Profitability Metrics - Gross profit increased by 0.8% to RMB 5,141,311, resulting in a gross profit margin of 47.3%, up from 45.2%[19]. - Operating profit rose by 2.6% to RMB 2,540,711, with an operating profit margin of 23.4%, compared to 22.0% in the previous year[19]. - Profit attributable to equity holders of the Company increased by 7.6% to RMB 1,863,371, with a profit margin of 17.1%, up from 15.4%[19]. - Basic and diluted earnings per share improved to 15.78 RMB cents, an increase of 8.2 percentage points from 14.58 RMB cents[19]. - Net profit attributable to equity holders of the Company increased by 7.6% year-on-year to RMB 1,863.4 million for the first half of FY2024[25]. - Profit for the period reached RMB 1,862,321, representing a growth of 7.8% from RMB 1,727,186 in the prior year[135]. Cost and Expense Management - The cost of sales decreased by 7.1% to RMB5,735.3 million in the first half of FY2024, attributed to a year-on-year decrease in the unit cost of key raw materials and packaging materials[58]. - Distribution costs amounted to RMB1,368.8 million, a decrease of 7.2% year-on-year, with distribution costs as a percentage of revenue decreasing by 0.5 percentage points to 12.6%[75]. - The finance costs decreased by 38.2% to RMB92.32 million in the first half of FY2024, due to the replacement of higher interest USD borrowings with lower interest RMB borrowings[78]. - The income tax expense for the first half of FY2024 was RMB643.0 million, with an income tax rate of 25.7%, a decrease of 1.3 percentage points compared to the same period last year[79]. Inventory and Receivables Management - Inventory turnover days improved to 77 days from 81 days, while trade receivables turnover days remained stable at 14 days[18]. - Trade payables turnover days increased to 32 days from 29 days, indicating a change in payment practices[18]. - Trade receivables increased to RMB 879,292,000 from RMB 832,245,000, indicating a growth of approximately 5.66%[120]. Market and Product Development - The Company is focusing on market expansion and new product development to drive future growth[17]. - The Company continues to invest in research and development to enhance product offerings and maintain competitive advantage[17]. - Emerging channels, such as vending machines and OEM, continued to grow, with overseas markets achieving double-digit revenue growth[24]. - New products launched over the past five years contributed a double-digit percentage to the Group's revenue for the first half of FY2024[24]. - The Group plans to launch more low-sugar and reduced sugar beverages in the second half of FY2024, responding to rising health awareness and changing consumer preferences[41]. - The rice crackers segment will introduce various Chinese New Year themed gift packs to capitalize on the upcoming peak sales season[42][45]. Financial Position and Cash Flow - As of September 30, 2024, the Group's net cash amounted to RMB 9,094.1 million, a decrease of RMB 1,561.1 million from RMB 10,655.2 million as of March 31, 2024, primarily due to the payment of a dividend of US$ 390 million (RMB 2,766.9 million)[89]. - The Group's total borrowings as of September 30, 2024, amounted to RMB 6,330.8 million, an increase of RMB 979.7 million from RMB 5,351.1 million as of March 31, 2024, with 98% being RMB denominated borrowings[89]. - The net cash outflow from financing activities for the first half of FY 2024 was RMB 1,891.9 million, mainly due to dividend payments[92]. - Cash and bank balances decreased to RMB 7,854,897,000 from RMB 8,421,346,000, representing a decline of about 6.73%[120]. Organizational and Structural Changes - The Group is undergoing organizational restructuring to enhance market responsiveness and implement its diversification strategy[26]. - The average number of employees decreased by 1,021 to approximately 38,866 for the first half of 2024FY[108]. - The Group invests significantly in continuing education and training programs for its employees[109]. Financial Risks and Management - The Group's activities expose it to various financial risks, including market risk, credit risk, and liquidity risk[169]. - The liquidity risk management policies have remained unchanged since the last year-end[170]. - The Group's financial risk management information should be read in conjunction with the annual consolidated financial statements as of March 31, 2024[170].

Financial Performance - Revenue for the six months ended September 30, 2024, was RMB 10,876,637 thousand, a decrease of 3.5% compared to RMB 11,274,818 thousand for the same period in 2023[2] - Gross profit increased by 0.8% to RMB 5,141,311 thousand, resulting in a gross margin of 47.3%, up from 45.2%[2] - Operating profit rose by 2.6% to RMB 2,540,711 thousand, with an operating margin of 23.4%, compared to 22.0% in the previous year[2] - Profit attributable to equity holders increased by 7.6% to RMB 1,863,371 thousand, with a profit margin of 17.1%, up from 15.4%[2] - Basic and diluted earnings per share were RMB 15.78, an increase of 8.2% from RMB 14.58[2] - The company reported a total comprehensive income of RMB 1,791,025 thousand for the period, compared to RMB 1,554,838 thousand in the previous year[5] - The profit before tax for the group was RMB 2,505,340 thousand, with a net profit of RMB 1,862,321 thousand after tax expenses of RMB 643,019 thousand[32] Assets and Liabilities - Total assets as of September 30, 2024, were RMB 26,807,669 thousand, down from RMB 27,457,068 thousand as of March 31, 2024[7] - Total liabilities increased to RMB 11,401,949 thousand from RMB 11,051,330 thousand[18] - Cash and bank deposits amounted to RMB 7,854,897 thousand, a decrease from RMB 8,421,346 thousand[7] - The group's total assets as of September 30, 2024, amounted to RMB 26,807,669 thousand, with cash and bank deposits totaling RMB 7,854,897 thousand[34] - The group reported a total liability of RMB 11,401,949 thousand, with borrowings included in the total liabilities amounting to RMB 6,330,802 thousand[34] - As of September 30, 2024, the total borrowings of the company amounted to RMB 6.3308 billion, an increase of RMB 0.9797 billion from RMB 5.3511 billion as of March 31, 2024, primarily consisting of RMB borrowings (98% of total borrowings)[81] - The net equity debt ratio as of September 30, 2024, was -0.59 times, compared to -0.65 times as of March 31, 2024, indicating a healthy cash flow and sufficient cash reserves to meet repayment needs[81] Revenue Breakdown - For the six months ended September 30, 2024, total revenue reached RMB 10,876,637 thousand, with the largest contribution from dairy and beverage products at RMB 6,009,418 thousand, accounting for approximately 55.3% of total revenue[32] - Revenue from the snack segment for the six months ended September 30, 2024, was RMB 2,730,970 thousand, showing a slight decrease from RMB 3,031,829 thousand in the same period of the previous year[32][36] - Revenue from the rice snacks category was 2.0574 billion RMB, remaining flat with low single-digit growth in sales, driven by diversified channel development and double-digit growth in emerging channels[60] - Revenue from dairy and beverage categories was 6.0094 billion RMB, a year-on-year decline of 1.4%, with milk sales remaining flat but showing low single-digit growth in canned milk revenue due to increased sales points[63] - Revenue from the leisure food category was 2.7310 billion RMB, a decline of 9.9% year-on-year, primarily due to poor performance in ice products[65] Market and Strategic Focus - The company continues to focus on expanding its market presence in North America, East Asia, Southeast Asia, and Europe[21] - Emerging channels, including vending machines and e-commerce, showed double-digit revenue growth in the first half of fiscal year 2024[54] - The overseas market achieved double-digit revenue growth, driven by new customers and products, with significant growth in regions such as Asia and the Americas[55] - The company plans to launch more low-sugar and health-oriented products in the second half of fiscal year 2024 to meet changing consumer preferences[58] - The group plans to continue expanding product categories and specifications, focusing on automation and channel diversification to enhance profitability[69] Operational Efficiency - The inventory turnover days decreased from 81 days to 77 days, reflecting improved supply chain and working capital efficiency[87] - The trade receivables turnover days increased from 13 days to 14 days as of September 30, 2024[88] - The trade payables turnover days increased from 29 days to 32 days as of September 30, 2024[91] Employee and Compensation - The average number of employees for the first half of the 2024 fiscal year was approximately 38,866, a decrease of 1,021 from the previous fiscal year[92] - The total compensation for employees in the first half of the 2024 fiscal year was RMB 2.2163 billion, a slight decrease of RMB 1.07 million compared to the same period last year[92] Capital Expenditure - The group's capital expenditure for the six months ended September 30, 2024, was RMB 358,951 thousand, with the highest expenditure in the snack segment at RMB 52,203 thousand[32] - The capital expenditure for the first half of the 2024 fiscal year was RMB 0.3590 billion, down from RMB 0.4057 billion for the previous fiscal year, primarily for upgrading production facilities[83] - The company purchased a business jet for USD 19.4 million, which was recorded as capital expenditure in the first half of the 2024 fiscal year[100] Financing and Costs - Financing costs decreased by 5.701 million RMB, down 38.2% to 92.32 million RMB, due to the replacement of higher-interest dollar loans with lower-interest RMB loans[76] - The net cash position as of September 30, 2024, was 9.0941 billion RMB, a decrease of 1.5611 billion RMB from March 31, 2024, primarily due to dividend payments[79] Depreciation and Asset Management - The group's non-current assets included property, plant, and equipment depreciation of RMB 367,490 thousand for the six months ended September 30, 2024[32] - The new replacement cost of the aircraft (excluding interior) is set at $43.9 million, which includes a transaction cost assumed to be 3.3% of the aircraft price[104] - The new replacement cost of the aircraft interior is $2.3 million, equivalent to its original purchase cost[104] - The condition-based depreciation rates for the aircraft (excluding interior) and aircraft interior are set at 45% and 10%, respectively, based on their remaining useful life and condition during inspection[104]