Financial Performance - The company's revenue for the year ended December 31, 2024, was RMB 80,650,914, an increase from RMB 80,418,075 in 2023, representing a growth of 0.29%[13] - Profit before taxation increased to RMB 6,059,654 in 2024, up from RMB 4,779,461 in 2023, marking a growth of 26.8%[13] - The profit attributable to owners of the company reached RMB 3,734,429 in 2024, compared to RMB 3,117,461 in 2023, reflecting a year-on-year increase of 19.7%[13] - The basic earnings per share for 2024 was reported at 66.28 RMB cents, compared to 55.33 RMB cents in 2023, indicating a significant increase[13] - For the full year 2024, the Group's revenue grew 0.3% year-on-year to RMB 80.651 billion[58] - EBITDA grew 17.3% year-on-year to RMB 9.628 billion[58] - Profit attributable to shareholders increased by 19.8% year-on-year to RMB 3.734 billion[58] - Basic earnings per share rose by RMB 10.95 cents to RMB 66.28 cents[58] Market Position and Strategy - The company's market capitalization as of December 31, 2024, was HK$57 billion[12] - The company aims to strengthen its logistics and sales network with the goal of becoming the largest group for Chinese instant food and beverages globally[12] - The company has established a strategic alliance with PepsiCo for the beverage business in China, enhancing its market position[9] - The company plans to enhance investment in product innovation, branding, and channel expansion to ensure robust operations through 2025[35] - The company aims to strengthen the emotional connection with young consumer groups through targeted marketing strategies[34] - The company is focused on integrating digital technologies to enhance operational efficiency and consumer engagement[34] Sales and Distribution - The group operates an extensive sales network with 357 sales offices and 271 warehouses, serving 67,215 wholesalers and 220,623 direct retailers as of December 31, 2024[11] - The number of direct retailers increased to 217,087 in 2023, up from 254,975 in 2022, indicating a strategic focus on refining channel operations[29] - The company reported a total of 76,875 wholesalers in 2023, a slight increase from 76,528 in 2022, indicating stable distribution channels[29] Product Performance - Revenue from instant noodles declined 1.3% year-on-year to RMB 28.414 billion, accounting for 35.2% of total revenue[60] - Revenue from beverages grew 1.3% year-on-year to RMB 51.621 billion, representing 64.0% of total revenue[60] - The gross profit margin for the instant noodles business improved by 1.6 percentage points to 28.6% year-on-year, which helped offset the revenue decline[65] - The beverage business generated a gross profit of RMB 18,236.19 million with a gross profit margin of 35.3%, reflecting an 11.5% increase in gross profit year-on-year[62] Innovation and Product Development - The Group introduced advanced aerospace food technology, becoming the first instant noodle company to obtain a patent for aerospace application, enhancing product quality and technological strength[69] - The "Fresh Q Noodles" set a new benchmark in the non-fried noodle market, leading industry innovation with its fresh and chewy texture[73] - The "Golden Stock Beef" flavor from the "Soup Chef" line received widespread consumer praise, indicating successful product innovation[73] - The "Master Kong Mini Bucket" product line targeted outdoor and midnight snack scenarios, achieving steady sales growth[70] - The "Sugar-free Jasmine Green Tea" was launched, made from 100% hand-picked Hengzhou jasmine, catering to the health-conscious consumer trend[80] Financial Management and Cash Flow - The Group generated a net cash inflow of RMB8.264 billion from operating activities and a net cash outflow of RMB2.856 billion from investing activities during the year[93] - As of December 31, 2024, the Group's bank deposits and cash amounted to RMB16.003 billion, an increase of RMB1.264 billion compared to December 31, 2023[94] - The Group's total assets and total liabilities were RMB53.149 billion and RMB35.534 billion respectively, with a debt ratio of 66.9%, down by 0.7 percentage points from the previous year[95] - The gearing ratio improved from -7.3% as of December 31, 2023 to -19.3% in the current period[95] Sustainability and ESG Initiatives - The company is committed to social responsibility, aiming to create lasting value for consumers and rich returns for shareholders[112] - The Sustainable Development Committee oversees the Group's ESG governance and performance, ensuring compliance with relevant laws and regulations[126] - Master Kong emphasizes sustainable development with a mission to promote Chinese food culture and aims to resonate its development with consumer interests[131] - The Company has identified five core ESG tasks: food safety construction, product responsibilities, energy conservation and environmental protection, win-win partnerships, and corporate contribution[133] - Master Kong actively promotes research projects on salt reduction, sugar reduction, fat reduction, and nutritional fortification to meet consumer health needs[141] Food Safety Management - The company has established a food safety management structure that includes various specialized groups to ensure comprehensive supervision of the food safety system[190] - Master Kong has implemented the Management Measures for Retrospective Withdrawal of Products to trace production factors and recover defective products promptly[190] - The company conducts over 1,500 food safety risk monitoring indicators and performs more than 3.5 million quality tests annually[189] - In 2024, there were no product recalls for safety and health reasons in products sold or shipped by Master Kong[192] Employee Development and Talent Management - The Group recruited over 3,500 fresh graduates and hosted nearly 1,000 college students for internships, enhancing its grassroots talent pool[105] - The Leadership Empowerment Center was launched in May 2024, focusing on empowering core talent in management and strategy[99] Awards and Recognition - Master Kong was selected for the 2024 Fortune China 500 List, reflecting its exceptional innovation capabilities and profitability[165] - The Chief Financial Office of Master Kong received the "Value Cooperation Partner" title from China Merchants Bank for its focus on digital financial innovation[167] - Master Kong was honored with two Forbes China 2024 ESG Awards for its achievements in product innovation and sustainable development[168]

Core Points - The A-share market's three major indices closed mixed, with the CSI Hong Kong-Shenzhen Brand Consumption 50 Index down by 0.77% to 2806.58 points, with a trading volume of 28.875 billion yuan [1] - Over the past month, the CSI Hong Kong-Shenzhen Brand Consumption 50 Index has decreased by 5.34%, increased by 3.82% over the past three months, and has risen by 2.24% year-to-date [1] - The index comprises 50 leading consumer companies from the mainland and Hong Kong markets, selected based on profitability and growth characteristics, reflecting the overall performance of leading consumer companies in the three regions [1] Index Composition - The top ten holdings of the CSI Hong Kong-Shenzhen Brand Consumption 50 Index are: Gree Electric Appliances (10.7%), Kweichow Moutai (10.27%), Midea Group (9.01%), Wuliangye (8.93%), Yili Group (6.18%), Kuaishou-W (6.13%), Anta Sports (5.48%), Master Kong (4.04%), Shanxi Fenjiu (3.37%), and Nongfu Spring (3.36%) [1] - The market share of the index's holdings is distributed as follows: Hong Kong Stock Exchange 35.42%, Shanghai Stock Exchange 32.76%, and Shenzhen Stock Exchange 31.82% [1] Industry Breakdown - The industry composition of the index's sample includes: primary consumption 47.76%, discretionary consumption 41.57%, telecommunications services 8.54%, and information technology 2.13% [2] - The index samples are adjusted semi-annually, with adjustments implemented on the next trading day following the second Friday of June and December each year [2] - In special circumstances, the index may undergo temporary adjustments, such as when a sample company is delisted or undergoes mergers, acquisitions, or splits [2] Fund Tracking - Public funds tracking the SHS Brand Consumption 50 include the Huatai-PineBridge CSI Hong Kong-Shenzhen Brand Consumption 50 ETF [3]

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 industry investment rating is "Outperform the Market" and is maintained [2] Core Viewpoints - The revenue of the beverage and tea industry in January-February decreased by 0.4% year-on-year [2] - The overall performance of the food and beverage sector shows a slight increase, with the food and beverage index rising by 0.40% from March 24 to March 28, ranking third among 28 sub-industries [6][7] - The report recommends high-end liquor with stable demand and high growth certainty, including Guizhou Moutai, Wuliangye, and Luzhou Laojiao, as well as strong regional brands [18] Summary by Sections Industry Performance - From March 24 to March 28, the overall market index increased by 0.07%, while the food and beverage index increased by 0.40% [6][7] - The top-performing sectors were meat products (+2.86%), dairy products (+2.13%), and beer (+2.01%) [6] - Notable stock performances included Miaokelando (+28.66%), Guangming Meat (+13.02%), and Yanjinpuzi (+5.33%) [6] Company Announcements - Shuanghui Development reported a total revenue of 59.561 billion yuan for 2024, down 0.55% year-on-year [21] - Zhujiang Beer reported a total revenue of 5.731 billion yuan for 2024, up 6.56% year-on-year [21] - Sanquan Food reported a total revenue of 3.476 billion yuan for 2024, up 10.41% year-on-year [21] - Three squirrels reported a total revenue of 10.622 billion yuan for 2024, up 49.30% year-on-year [21] Industry News - The 112th National Sugar and Wine Commodity Fair is preparing to sign several major projects with a total investment exceeding 3 billion yuan [23] Consumer Data - In January-February 2025, the total retail sales of consumer goods increased by 4.0% year-on-year, while the catering retail sales increased by 4.3% [24] - The consumer confidence index for January 2025 was 87.5, down 1.57% year-on-year [24] Alcohol Industry Data - In January-February 2025, the production of liquor, beer, and wine decreased by 11.2%, 4.9%, and 25% year-on-year, respectively [29]

Investment Rating - The report maintains a "Buy" rating for the company [10] Core Insights - The company has optimized its product structure, leading to price increases and sustained improvement in profitability, with strong shareholder return value highlighted [2][8] - In the fiscal year 2024, the company achieved a revenue of 80.65 billion, a year-on-year increase of 0.3%, and a net profit of 3.734 billion, reflecting a growth of 19.8% [4][8] Summary by Sections Revenue and Profitability - For the first half of 2024, the company reported a revenue of 39.45 billion, a slight decline of 0.2%, while the gross margin improved by 3.3 percentage points to 33.6%, resulting in a net profit of 1.849 billion, up 25.0% year-on-year [4][7] Product Performance - The instant noodle segment generated revenue of 28.414 billion, down 1.3% year-on-year, with high-priced noodles experiencing a significant decline of 6.3% for the year [5] - The beverage segment achieved revenue of 51.62 billion, a year-on-year increase of 1.3%, with tea drinks maintaining strong growth at 21.7 billion, up 8.2% [6] Margin Improvement - The company's sales net profit margin increased by 1.0 percentage points to 5.4%, with gross margin rising by 2.7 percentage points to 33.1% [7] - The report indicates that the trend of margin improvement is strengthening, although there is a slight increase in expenses [7] Shareholder Returns - The company maintained a high dividend payout ratio of 100%, resulting in a dividend yield of 5.6% based on the current market capitalization, showcasing strong shareholder return value [2][8]

Market Overview - The Hong Kong stock market showed positive movement in the morning, with the Hang Seng Index rising by 0.38% to close at 23,206.84 points, with a total turnover of 250.23 billion HKD [1] - Global uncertainties are increasing, leading to a cautious approach in the Hong Kong market, with upcoming data on consumption and real estate being key focus areas [1] Blue-Chip Stocks Performance - Xiaomi Group-W (01810) experienced a significant drop of 5.49%, closing at 46.5 HKD, impacting the Hang Seng Index negatively by 78.78 points [2] - Other blue-chip stocks showed mixed results, with CSPC Pharmaceutical Group (01093) rising by 10.93% and contributing 7.33 points to the index, while China Overseas Development (00688) fell by 4.46% [2] Sector Performance Pharmaceutical Sector - The pharmaceutical sector saw strong performance, with stocks like Yiming Pharmaceutical-B (01541) rising by 19.86% and Kangfang Biotech (09926) increasing by 12.86% [3] - The market anticipates policy optimizations in drug procurement, which is expected to benefit domestic pharmaceutical innovation [3] Oil Sector - Oil stocks generally rose, with CNOOC (00883) increasing by 2.7% and PetroChina (00857) up by 2.07% [4] - Concerns over geopolitical tensions have led to a rise in international oil prices, with projections for Brent crude oil prices to reach 70-75 USD per barrel by 2025 [4] Real Estate Sector - The real estate sector showed mixed results, with companies like Midea Real Estate (03990) rising by 12.04%, while China Overseas Development (00688) fell by 4.46% [6] - Data indicates a decline in sales for major real estate firms, with a 9.8% year-on-year drop in sales for the first quarter [6] Company Earnings Reports - Midea Real Estate reported a revenue of 3.73 billion HKD, a 33% increase, and a core net profit of 500 million HKD, up 25% [7] - China Overseas Development's revenue decreased by 8.58% to 185.15 billion HKD, with a profit drop of 38.95% [7] Notable Stock Movements - Lao Pu Gold (06181) reached a new high, closing up 19.07% at 868 HKD, with a significant increase in sales and net profit [8] - Haijia Medical (06078) rose by 9.97% after its founder increased shareholding, indicating confidence in the company's future [9] - XPeng Motors-W (09868) reported a 268% year-on-year increase in vehicle deliveries, reaching 33,205 units in March 2025 [10] - Pop Mart (09992) saw a 4.98% increase, with a reported revenue growth of 106.9% and a target to exceed 20 billion RMB in revenue this year [11]

Investment Rating - The report maintains an "Outperform" rating for the company [6][10]. Core Views - The company's profitability has improved due to price increases and declining costs, with expectations for revenue acceleration in 2025 [6][10]. - The beverage segment, particularly tea drinks, continues to show strong momentum, contributing significantly to overall profitability [8][10]. - The company is focused on enhancing its core products, optimizing gross margin structure, and innovating product offerings to meet changing consumer trends [9][10]. Financial Summary - Main revenue for 2023 is projected at 80,418 million, with a year-on-year growth of 2% [7]. - Net profit for 2023 is expected to be 3,117 million, reflecting a year-on-year decrease of 18% [7]. - The gross margin is anticipated to improve to 33.10% in 2024, up from 30.42% in 2023 [7]. - The company plans to distribute a total cash dividend of 37.45 billion for 2024, with a payout ratio of 100% [8]. Segment Performance - The beverage business achieved revenue of 516.21 billion in 2024, with a year-on-year growth of 1.3% [8]. - The tea beverage segment generated revenue of 217 billion, marking an 8.2% increase year-on-year [8]. - The instant noodle segment reported revenue of 284.14 billion, a slight decline of 1.3% year-on-year, but with improved gross margin [8][9]. Profitability Forecast - The company forecasts net profits of 4,239 million, 4,694 million, and 5,154 million for 2025, 2026, and 2027 respectively, with corresponding EPS of 0.75, 0.83, and 0.91 [10]. - The report suggests a PE valuation range of 18-22 times for 2025, translating to a per-share value range of 13.50-16.50 HKD [10].

Investment Rating - The report assigns a "Buy" rating for the company, marking it as a first-time recommendation [1][8]. Core Insights - The company demonstrates stable revenue growth and accelerated profit release, with 2024 revenue and net profit reaching 80.65 billion and 3.73 billion respectively, reflecting a year-on-year increase of 0.29% and 19.79% [5]. - The beverage segment shows significant growth, particularly in container noodles and tea drinks, with revenues increasing by 3.74% and 8.18% respectively [6][7]. - The company's high-quality development strategy is effective, with a steady recovery in market share and a notable improvement in gross margin, leading to a robust cash flow performance [8]. Summary by Sections Financial Performance - In 2024, the company achieved a gross margin of 33.10% and a net profit margin of 4.63%, with respective year-on-year increases of 2.68 and 0.75 percentage points [5]. - The operating cash flow for 2024 is reported at 12.46 billion, indicating a significant year-on-year growth of 50.39% [5][11]. Revenue Breakdown - The revenue from beverages, instant noodles, and other segments for 2024 is 51.62 billion, 28.41 billion, and 615 million respectively, with the beverage segment showing a positive growth trend [6]. - The company maintains a competitive edge in the packaging water sector by not engaging in price wars, focusing instead on high-quality development [6]. Profitability Forecast - The report forecasts revenues for 2025, 2026, and 2027 to be 82.37 billion, 84.45 billion, and 86.67 billion respectively, with corresponding EPS of 0.74, 0.81, and 0.88 [10][11]. - The expected PE ratios for the upcoming years are projected at 16, 15, and 14 times, indicating a favorable valuation [8].

Investment Rating - The report assigns a "Buy" rating for the company, marking it as a first-time recommendation [1][8]. Core Insights - The company demonstrates stable revenue growth and accelerated profit release, with 2024 revenue and net profit reaching 80.65 billion and 3.73 billion respectively, reflecting a year-on-year increase of 0.29% and 19.79% [5]. - The beverage segment shows significant growth, particularly in container noodles and tea drinks, with revenues increasing by 3.74% and 8.18% respectively [6][7]. - The company's high-quality development strategy is effective, with a steady recovery in market share and a notable improvement in gross margin [8]. Summary by Sections Financial Performance - In 2024, the company achieved a gross margin of 33.10% and a net profit margin of 4.63%, with respective year-on-year increases of 2.68 and 0.75 percentage points [5]. - The operating cash flow for 2024 was 12.46 billion, showing a significant year-on-year increase [11]. Revenue Breakdown - The revenue from beverages, instant noodles, and other segments for 2024 was 51.62 billion, 28.41 billion, and 0.615 billion respectively, with the beverage segment showing a year-on-year growth of 1.34% [6]. Profitability Forecast - The report forecasts revenues of 82.37 billion, 84.45 billion, and 86.67 billion for 2025, 2026, and 2027 respectively, with corresponding EPS of 0.74, 0.81, and 0.88 [10][11].

Financial Performance - Revenue for the year ended December 31, 2024, was RMB 80,650,914 thousand, representing a 0.3% increase from RMB 80,418,075 thousand in 2023[2] - Gross profit margin improved to 33.1%, up by 2.7 percentage points from 30.4% in the previous year[2] - Group gross profit increased by 9.1% to RMB 26,695,643 thousand, compared to RMB 24,467,089 thousand in 2023[2] - EBITDA rose by 17.3% to RMB 9,627,802 thousand, up from RMB 8,206,526 thousand in 2023[2] - Net profit for the year was RMB 4,322,135 thousand, a 22.9% increase from RMB 3,516,667 thousand in 2023[2] - Profit attributable to shareholders increased by 19.8% to RMB 3,734,429 thousand, compared to RMB 3,117,461 thousand in 2023[2] - Basic earnings per share rose to RMB 66.28, an increase of 10.95 cents from RMB 55.33 in 2023[2] Cash and Equity - Cash and cash equivalents, including long-term deposits, amounted to RMB 16,002,668 thousand, an increase of RMB 1,264,287 thousand from the previous year[2] - Total equity increased to RMB 17,615,351 thousand in 2024 from RMB 17,222,244 thousand in 2023, representing a growth of 2.3%[11] - The company's issued share capital increased marginally from RMB 196,681 thousand in 2023 to RMB 196,684 thousand in 2024[11] - The reserve increased to RMB 13,244,526 thousand in 2024 from RMB 12,910,832 thousand in 2023, reflecting a growth of approximately 2.6%[11] Liabilities and Assets - Non-current liabilities decreased significantly from RMB 6,734,396 thousand in 2023 to RMB 3,110,279 thousand in 2024, a reduction of approximately 53.8%[11] - Current liabilities rose to RMB 32,423,225 thousand in 2024, up from RMB 29,193,014 thousand in 2023, indicating an increase of about 7.6%[11] - The company's total liabilities slightly decreased from RMB 35,927,410 thousand in 2023 to RMB 35,533,504 thousand in 2024, a decrease of about 1.1%[11] - The total assets for 2024 amounted to RMB 53,148,855 thousand, slightly down from RMB 53,149,654 thousand in 2023, showing a negligible decrease[34][36] Revenue Breakdown - Revenue from customer contracts for 2024 reached RMB 80,582,017 thousand, a slight decrease from RMB 80,348,163 thousand in 2023, representing a decline of approximately 0.3%[30][32] - The instant noodle business generated revenue of RMB 28.414 billion in 2024, a year-on-year decline of 1.3%, accounting for 35.2% of total group revenue[56] - The beverage segment achieved revenue of RMB 51.621 billion in 2024, a year-on-year growth of 1.3%, representing 64.0% of total group revenue[62] Operational Efficiency - The group's total revenue for 2024 increased by 0.3% to RMB 80.65 billion, with instant noodles revenue declining by 1.3% and beverage revenue growing by 1.3%[54] - The overall gross profit for the group increased by 9.1% to RMB 26.696 billion, with a gross profit margin of 33.1%, up 2.7 percentage points from the previous year[57] - The group's inventory turnover period improved to 17.6 days from 19.5 days year-on-year, indicating better inventory management[75] Product Innovation and Market Strategy - The company aims to enhance product innovation, brand building, and channel expansion in 2025[4] - The company introduced new products such as "Fresh Q Noodles," which set a new benchmark in the non-fried noodle market, and received positive consumer feedback[59] - The company is focusing on health-oriented products, launching sugar-free options and expanding product categories to enhance operational efficiency[62] - The company is actively optimizing its product mix and marketing strategies to adapt to changing consumer preferences and shopping behaviors[56] Sustainability and Social Responsibility - The company emphasizes a commitment to food safety and green development while supporting consumer aspirations for a better life[4] - The group is actively promoting sustainable development concepts through various consumer engagement initiatives, including partnerships with social media platforms[68] - The company has been recognized for its achievements in sustainable development, becoming a founding member of the UN Food Systems Committee and being listed among the "Top 20 Cases of 20 Years" by the UN Global Compact[82] Governance and Risk Management - The company has established a risk management framework based on the COSO model, ensuring effective internal controls and compliance with regulations[94] - The company will continue to enhance its governance practices to improve accountability and transparency, adhering to the Hong Kong Stock Exchange's corporate governance code[87] Dividends and Share Options - The company plans to distribute a special final dividend of RMB 0.3314 per share, totaling RMB 1.87 billion, and a final dividend of the same amount[46] - The board proposed a final dividend of RMB 0.3314 per ordinary share and a special final dividend of RMB 0.3314 per ordinary share for the year ending December 31, 2024, pending approval at the annual general meeting[107]