Investment Rating - The report initiates coverage on Tingyi Holdings Corp (322 HK) with an "Outperform" rating, setting a target price of HKD 12.1, implying a 27% upside potential [4][45] Core Investment Thesis - Tingyi is a dual industry leader in instant noodles and soft drinks in China, with strong channel control and market penetration [3] - The company benefits from stable growth in beverage demand, particularly in sugar-free and value-for-money products [3] - Tingyi has maintained a 100%+ dividend payout ratio historically, offering an attractive 6.2% dividend yield [4] Business Overview - Tingyi operates in two main segments: beverages (63% of revenue) and instant noodles (36% of revenue) [34] - The beverage portfolio includes tea drinks (39%), carbonated drinks (36%), juice (14%), and packaged water (11%) [35] - Instant noodles are categorized into container noodles (47%), premium bagged noodles (41%), mid-priced bagged noodles (10%), and crispy noodles (2%) [36] Financial Performance - Revenue is expected to grow at 4.8%/4.5%/4.2% from 2024-2026, reaching RMB 84.3/88.1/91.8 billion [45] - Net profit is forecasted to increase by 7.0%/6.5%/5.2% during 2024-2026, reaching RMB 3.34/3.55/3.74 billion [45] - Gross margin is projected to improve by 0.6 percentage points in 2024, driven by price increases in beverage products [4] Industry Analysis Soft Drinks - China's soft drink market reached RMB 637.2 billion in 2023, with 5-year CAGR of 2.9% [15] - Key growth categories include carbonated drinks (7.9% CAGR), energy drinks (6.9%), and sports drinks (6.7%) [15] - Sugar-free beverages are growing rapidly, with 21.7% CAGR from 2018-2023 [19] Instant Noodles - The instant noodle market experienced 5.5% CAGR from 2015-2022, driven by pandemic demand [30] - Post-pandemic, the market faces challenges from food delivery services and changing consumer preferences [32] - Premiumization remains a key strategy, with high-end products driving growth [30] Competitive Advantages - Strong channel control with extensive coverage in small cities and rural markets [3] - Strategic partnerships with PepsiCo, Starbucks, and Ovaltine enhance product portfolio [7] - Experienced management team with long-term equity incentives aligning interests [8][12] Valuation - The report values Tingyi at 19x 2024 PE, below the sector average of 27.1x [47] - The valuation reflects the company's stable growth profile and attractive dividend yield [45] Growth Drivers - Continued expansion in sugar-free beverage products [3] - Premiumization of both beverage and instant noodle product lines [35][36] - Channel optimization and cost control measures [4]

Financial Performance - The Group's revenue for the year ended December 31, 2023, was RMB 80,418 million, representing an increase of 2.16% compared to RMB 78,717 million in 2022[12]. - Profit attributable to owners of the Company for 2023 was RMB 3,117 million, up 18.43% from RMB 2,632 million in 2022[12]. - The Group's basic earnings per share increased to RMB 55.33 in 2023 from RMB 46.73 in 2022, reflecting a growth of 18.43%[12]. - The Group's gross profit margin for 2023 was 8.53%, an increase from 5.92% in 2022[21]. - The EBIT margin for 2023 was reported at 30.39%, slightly up from 30.42% in 2022, indicating stable profitability[26]. - EBITDA grew by 13.82% year-on-year to RMB 8.207 billion[59]. - The overall gross profit margin for the Group improved to 30.42%, up from 29.09% in the previous year, with total gross profit increasing by RMB 6.85 million[65]. Market Position and Strategy - As of December 31, 2023, the Group's market capitalization was HK$53.6 billion, maintaining its position as a constituent stock of the MSCI China Index and Hang Seng Index[10]. - The Group aims to strengthen its logistics and sales network with the goal of becoming the largest Group for Chinese Instant Food & Beverage in the world[10]. - The company emphasized ongoing investments in product innovation and brand rejuvenation to drive future growth[34]. - The board anticipates that the market in 2024 will present both opportunities and challenges, focusing on high-quality development and reasonable growth in consumption[36]. - The instant noodle business will continue to offer products with multiple price bands, sizes, and flavors to meet diverse consumer demands, driving industry scale expansion[114]. - The beverage business will focus on core categories, providing joyful and healthy products for various consumption scenarios, enhancing scale advantages[114]. Product Segmentation - The instant noodles segment accounted for 41% of total revenue in 2023, while beverages contributed 57%, reflecting a balanced revenue distribution[27]. - Revenue from instant noodles declined by 2.84% year-on-year, while beverage revenue grew by 5.39% year-on-year[59]. - For the full year 2023, the revenue of the instant noodle business was RMB 28.793 billion, representing a year-on-year decline of 2.84%, accounting for 35.80% of the Group's total revenue[68]. - The beverage business generated revenue of RMB 50.939 billion, an increase of 5.39% year-on-year, accounting for 63.34% of total revenue[66]. Workforce and Operations - The company maintained a workforce of 66,807 employees in 2023, up from 64,302 in 2022, marking an increase of approximately 3.9%[30]. - The production lines slightly decreased to 571 in 2023 from 575 in 2022, indicating a minor reduction in production capacity[30]. - The Group had 66,807 employees as of December 31, 2023, focusing on sustainable development of organization and talents[108]. - Thousands of fresh graduates were recruited through over a hundred recruitment campaigns, reaching millions of potential candidates[110]. Cash Flow and Financial Position - The Group generated a net cash inflow of RMB5.495 billion from operating activities during the year[97]. - The net cash outflow from investing activities was RMB3.724 billion, including cash receipts of RMB213 million from asset activation[97]. - The net cash outflow from financing activities was RMB7.319 billion, resulting in a net decrease in cash and cash equivalents of RMB5.15 billion[97]. - As of December 31, 2023, the Group's bank deposits and cash amounted to RMB14.738 billion, a decrease of RMB5.150 billion compared to December 31, 2022[101]. - The Group's total assets and total liabilities were RMB53.150 billion and RMB35.927 billion, respectively, as of December 31, 2023, with decreases of RMB5.300 billion and RMB5.706 billion compared to December 31, 2022[102]. ESG and Sustainability Initiatives - The Company aims to create a comprehensive food and beverage "National Brand" that is trusted by the government and reassuring for consumers[116]. - Master Kong emphasizes sustainable development with a mission to promote Chinese food culture and aims to be a highly esteemed company[139]. - The company has established five core ESG tasks: food safety construction, product responsibilities, energy conservation and environmental protection, win-win partnerships, and corporate contribution[144]. - The annual performance-based compensation for senior management is linked to ESG performance indicators, directly affecting their bonuses[153]. - Master Kong's commitment to ESG practices includes a focus on emissions management, resource management, and product responsibility[197]. - Master Kong was invited to attend a high-level United Nations conference in September, where it was announced as the only Chinese food and beverage enterprise to receive the title of "Forward Faster Early Mover - Pioneer"[160]. Product Innovation and Marketing - The instant noodle business continued to innovate with new flavors and products, including collaborations with popular IPs to enhance brand engagement and sales performance[73]. - The introduction of new products like "Good Soup Noodles" and "Tom Yum Goong Noodle" aimed to capture market trends and consumer preferences for premium offerings[74]. - The company launched a suite of sugar-free products including sugar-free tea, sugar-free carbonated soft drinks, and sugar-free coffee, aligning with health trends[80]. - The "Master Kong Ice Tea" brand collaborated with Wang Yibo to enhance brand image and engage with the younger demographic through various marketing campaigns[85]. - The overall strategy includes leveraging health trends and engaging with younger consumers through innovative marketing and product offerings[83][85].

Investment Rating - The report maintains an "Outperform" rating for the company with a target price of HKD 13.09 per share [1][4] Core Views - The company achieved stable revenue growth in 2023, with total revenue reaching RMB 80.42 billion, a year-on-year increase of 2.16% [1] - Net profit attributable to shareholders increased by 18.43% year-on-year to RMB 3.12 billion, driven by improved gross profit margin and effective cost control [1] - The beverage business surpassed RMB 50 billion in revenue, with tea, juice, water, and carbonated drinks all showing growth [2][8] - The instant noodle business faced growth pressure but saw significant profitability improvement, with net profit attributable to shareholders increasing by 46.10% [9] Financial Performance - The company's gross profit margin increased by 1.33 percentage points to 30.42% in 2023, leading to a 6.85% increase in gross profit [1] - The beverage business achieved a gross profit margin of 32.10%, up 0.15 percentage points year-on-year, while the instant noodle business saw a 3.05 percentage point increase in gross profit margin to 27.00% [1][9] - The company distributed a cash dividend of RMB 3.12 billion, with a dividend payout ratio of 99.98% [1] Business Segment Analysis - Beverage business revenue reached RMB 50.94 billion, a year-on-year increase of 5.39%, with tea beverages contributing RMB 20.06 billion, up 6.96% [2][8] - Water business revenue grew by 9.78% to RMB 5.38 billion, while juice business revenue increased by 4.47% to RMB 7.15 billion [2] - Instant noodle business revenue declined by 2.84% to RMB 28.79 billion, but profitability improved significantly due to lower raw material costs and favorable pricing [9] Future Outlook - The company aims to expand its scale advantage in 2024, focusing on core categories and sugar-free trends to meet diverse consumer needs [4][9] - Revenue is projected to grow to RMB 85.78 billion in 2024, RMB 89.91 billion in 2025, and RMB 93.36 billion in 2026, with net profit attributable to shareholders expected to reach RMB 3.50 billion, RMB 3.75 billion, and RMB 4.01 billion respectively [4] - The company plans to continue offering multi-price, multi-specification, and diversified flavor products in the instant noodle segment, while accelerating the establishment of scale advantages in the beverage business [4]

[Table_MainInfo] 公司研究/食品 证券研究报告 康师傅控股（0322.HK）公司研究报告 2024年04月01日 [Table_InvestInfo] 营收平稳，盈利能力恢复，期待 24 年继 投资评级 优于大市 维持 续扩大规模优势 股票数据 0[3Ta月b2le9_日S收to盘ck价Info] [Table_Summary] （HKD） 8.58 投资要点： 52周股价波动（HKD） 7.07-13.93 总股本/流通港股（百万股） 5634/5634  事件：公司披露 2023 年年度业绩公告，其中实现营收 804.18 亿元 总市值/流通市值（百万 （YOY2.16%），实现归母净利润 31.17 亿元（YOY18.43%）。此外公司 HKD） 48343/48343 23年现金分红31.17亿元（对应股利支付率99.98%）。 相关研究 [《Ta 20b 2le 3_中R报ep业o绩rtI点nf评o：] 饮料继续表现优异，  营收平稳，盈利能力恢复。23年利润表拆分来看，收入毛利端，公司营收同 整体盈利能力恢复》 2023.08.29 比增长 2.16%，毛利率同比上升 1.33 ...

海 外 研 证券研究报告 究 ＃industryId＃ 食品饮料行业 ＃00322 .HK ＃康dy师Com傅pa控ny＃股 港股通（沪、深） dyStockco ＃inve 增stSu 持ggest ion＃ i维nv＃ d e＃ ( e持stS ） 饮品 业务增收＃ ，tit方le＃ 便 面业务增利 uggesti onC han ＃createTime1＃ 2024年 03月 28日 ge＃ 投资要点 公 ＃市场ma数rk据et Data＃ ＃summary＃ 司 ⚫ 饮品业务带动全年营收稳健增长。2023 年，康师傅控股营收为 804.2 亿 日期 2024.03.27 跟 元（人民币，下同），同比增长 2.2%，增速同比-4.1pcts。方便面业务营 收盘价（港元） 8.72 收为 287.9 亿元，同比减少 2.8%，占公司总收入 35.8%，同比-1.8pcts； 踪 总股本（亿股） 56.34 饮品业务营收为 509.4 亿元，同比增长 5.4%，占公司总收入 63.3%，同 报 总市值（亿港元） 491.32 比+1.9pcts。 告 归母净资产（亿元） 138.95 总资产（亿元） 531 ...

智通财经APP获悉，美银证券发布研究报告称，重申康师傅控股(00322)“买入”评级，认为公司今年前景良好。另将今明两年每股盈利预测上调2%及3%，目标价由10.6港元上调至11.5港元，仍然看好公司稳定增长，股息率稳健，目前估值不高。 报告中称，公司去年业绩符合预期，期内收入同比增长2.2%至804亿元人民币，该行预期为807亿元人民币；当中方便面及饮料收入分别跌2.8%及升5.4%。纯利升18.4%至31.17亿元人民币，略高于该行预期的31.11亿元人民币。该行认为，尽管康师傅仍较为审慎，并无对今年纯利预测作出指引，但预计未来三至五年的自然毛利将稳步扩张。 ...

Financial Performance - Revenue for the year ended December 31, 2023, was RMB 80,418,075 thousand, an increase of 2.16% compared to RMB 78,717,420 thousand in 2022[2] - Gross profit margin improved to 30.42%, up by 1.33 percentage points from 29.09% in the previous year[2] - EBITDA for 2023 was RMB 8,206,526 thousand, reflecting a growth of 13.82% from RMB 7,209,990 thousand in 2022[2] - Net profit attributable to shareholders increased by 18.43% to RMB 3,117,461 thousand, compared to RMB 2,632,312 thousand in 2022[2] - Basic earnings per share rose to RMB 55.33, an increase of 8.60 cents from RMB 46.73 in 2022[2] - Total revenue for 2023 reached RMB 80,348,163 thousand, an increase from RMB 78,644,539 thousand in 2022, representing a growth of approximately 2.17%[13] - The profit before tax for 2023 was RMB 4,779,461 thousand, compared to RMB 4,148,804 thousand in 2022, indicating a year-over-year increase of about 15.2%[13][14] - The net profit for 2023 was RMB 3,516,667 thousand, up from RMB 3,075,834 thousand in 2022, reflecting a growth of approximately 14.4%[13][14] Assets and Liabilities - Total assets decreased to RMB 53,149,654 thousand from RMB 58,449,306 thousand in 2022[6] - Total liabilities decreased to RMB 35,927,410 thousand in 2023 from RMB 41,633,831 thousand in 2022, a reduction of 13.7%[7] - Current liabilities also decreased to RMB 29,193,014 thousand in 2023, down from RMB 31,704,538 thousand in 2022, reflecting a decline of 7.9%[7] - Total assets minus current liabilities stood at RMB 23,956,640 thousand in 2023, compared to RMB 26,744,768 thousand in 2022, indicating a decrease of 10.4%[7] - Total equity increased to RMB 17,222,244 thousand in 2023, up from RMB 16,815,475 thousand in 2022, representing a growth of 2.4%[7] - Non-current liabilities decreased significantly to RMB 6,734,396 thousand in 2023 from RMB 9,929,293 thousand in 2022, a reduction of 32.5%[7] - The company reported a net current liability of RMB (8,719,436) thousand in 2023, compared to RMB (7,677,469) thousand in 2022, indicating a worsening position[7] Cash Flow and Investments - Cash and cash equivalents as of December 31, 2023, were RMB 14,738,381 thousand, a decrease of RMB 5,149,972 thousand from the previous year[2] - The net cash inflow from operating activities for the year was RMB 5.495 billion, while cash outflow from investing activities was RMB 3.724 billion[46] - The company plans to continue investing in food safety and sustainable development projects to drive business growth[3] Segment Performance - Revenue from the beverage segment grew by 5.39% to RMB 50.939 billion, while revenue from the instant noodle segment declined by 2.84% to RMB 28.793 billion[33] - The instant noodle business generated revenue of 28.793 billion RMB in 2023, a year-on-year decline of 2.84%, accounting for 35.80% of the group's total revenue[36] - The beverage segment achieved total revenue of 50.939 billion RMB in 2023, representing a year-on-year growth of 5.39%, and accounted for 63.34% of the group's total revenue[40] Product Innovation and Market Strategy - The company emphasized ongoing product innovation and brand building, alongside digital transformation initiatives[3] - The company is focusing on expanding its market presence and enhancing product quality to meet changing consumer preferences[31] - The company launched new products such as "Ice Red Tea Flavor Braised Beef Noodles" and "Tomato Egg Beef Noodles," which gained significant popularity and sales growth[37] - The company is focusing on health trends by launching sugar-free products across various beverage categories, including tea, carbonated drinks, and coffee[40] - The company has partnered with various IPs and celebrities to enhance brand recognition and engage younger consumers[37][41] Corporate Governance and Compliance - As of December 31, 2023, the company has complied with the corporate governance code, with a commitment to maintaining accountability and transparency to enhance long-term shareholder returns[52] - The board of directors confirmed their responsibility for the preparation of the financial statements, ensuring compliance with statutory requirements and applicable accounting standards[54] - The external auditor confirmed that the preliminary performance figures align with the consolidated financial statements for the year ending December 31, 2023[55] - The audit committee, consisting of three independent non-executive directors, recently reviewed the company's 2023 annual performance[56] Future Outlook - The company anticipates steady economic development in 2024, focusing on domestic market expansion and product diversification in the instant noodle sector to meet varied consumer demands[51] - The beverage segment will continue to concentrate on core categories, aiming to provide joyful and healthy products for different consumption scenarios, thereby accelerating scale advantages[51] - The company plans to invest in product innovation, brand building, channel development, and digital transformation, while enhancing food safety and sustainability initiatives[51]

Revenue and Profit Growth - Revenue increased by 7.04% to RMB 40,907.46 million compared to the same period last year[2] - Net profit attributable to shareholders increased by 30.66% to RMB 1,637.67 million[2] - Net profit for the first half of 2023 was RMB 1,922,879 thousand, compared to RMB 1,494,574 thousand in the same period of 2022, an increase of 28.7%[9] - Total comprehensive income for the first half of 2023 was RMB 1,896,008 thousand, a 166.4% increase from RMB 711,905 thousand in the same period of 2022[9] - The company's total profit for the period increased to RMB 1,922,879 thousand in H1 2023, up from RMB 1,494,574 thousand in H1 2022[13] - Net profit attributable to shareholders increased to RMB 1,637,670 thousand for the first half of 2023, compared to RMB 1,253,367 thousand for the same period in 2022[19] - Group revenue increased by 7.04% YoY to RMB 40.907 billion in the first half of 2023, with instant noodle revenue growing by 2.97% and beverage revenue growing by 9.50%[44] - EBITDA increased by 25.87% YoY to RMB 4.302 billion, and net profit attributable to shareholders rose by 30.66% YoY to RMB 1.638 billion[44] - Instant noodle business net profit attributable to shareholders surged by 48.11% YoY to RMB 806 million, driven by improved gross profit margin[45] - Beverage business net profit attributable to shareholders increased by 18.06% YoY to RMB 879 million, supported by favorable raw material costs and product mix[49] Gross Profit Margin and Cost Efficiency - Gross profit margin improved by 2.25 percentage points to 30.47%[2] - Gross profit margin improved by 2.25 percentage points YoY to 30.47%, driven by favorable pricing and raw material costs[44] - Instant noodle business revenue reached RMB 13.95 billion, accounting for 34.10% of total group revenue, with gross profit margin increasing by 5.20 percentage points YoY to 25.83%[45] - Beverage business revenue grew by 9.50% YoY to RMB 26.606 billion, contributing 65.04% of total group revenue, with gross profit margin improving by 0.52 percentage points YoY to 32.66%[49] Cash Flow and Liquidity - Cash and cash equivalents stood at RMB 21,315.62 million as of June 30, 2023, an increase of RMB 1,427.26 million from December 31, 2022[2] - Bank balances and cash increased to RMB 14,257.34 million from RMB 12,323.92 million at the end of 2022[6] - Operating cash flow from activities increased to RMB 3,821,835 thousand in the first half of 2023, up from RMB 1,917,870 thousand in the same period of 2022[10] - Net cash generated from operating activities rose to RMB 2,842,994 thousand in H1 2023, compared to RMB 1,278,828 thousand in H1 2022[10] - The company's cash and cash equivalents stood at RMB 14,283,716 thousand as of June 30, 2023, down from RMB 17,119,711 thousand as of June 30, 2022[10] - Net cash used in investing activities decreased to RMB 205,312 thousand in H1 2023, compared to RMB 2,621,194 thousand in H1 2022[10] - Operating cash inflow for the period was RMB 2.843 billion, while investment cash outflow was RMB 205 million, with asset activation generating a net cash inflow of RMB 214 million[55] - As of June 30, 2023, the company's bank deposits and cash amounted to RMB 21.316 billion, an increase of RMB 1.427 billion compared to December 31, 2022[55] Segment Performance - Revenue from customer contracts in the instant noodle segment reached RMB 13,913,767 thousand in H1 2023, up from RMB 13,521,336 thousand in H1 2022[13] - Beverage segment revenue from customer contracts grew to RMB 26,600,680 thousand in H1 2023, compared to RMB 24,295,072 thousand in H1 2022[13] - Total revenue from customer contracts across all segments increased to RMB 40,871,653 thousand in H1 2023, up from RMB 38,176,719 thousand in H1 2022[13] - Profit before tax for the beverage segment rose to RMB 1,558,803 thousand in H1 2023, compared to RMB 1,297,489 thousand in H1 2022[14] - Instant noodle business revenue reached RMB 13.95 billion, accounting for 34.10% of total group revenue, with gross profit margin increasing by 5.20 percentage points YoY to 25.83%[45] - Beverage business revenue grew by 9.50% YoY to RMB 26.606 billion, contributing 65.04% of total group revenue, with gross profit margin improving by 0.52 percentage points YoY to 32.66%[49] - The company focused on premium and ultra-premium instant noodle products, targeting middle-class consumers with upgraded offerings such as "Ranhun Noodles" and "Yupin Feast"[47] - Beverage business emphasized health trends, launching new products and optimizing product portfolios for home, travel, and dining-out scenarios[49] Assets and Liabilities - Total assets increased to RMB 59,307.51 million from RMB 58,449.31 million at the end of 2022[6] - Inventory decreased to RMB 4,350.69 million from RMB 5,254.59 million at the end of 2022[6] - Total equity decreased from RMB 16,815,475 thousand in 2022 to RMB 15,653,833 thousand in 2023, a decline of 6.9%[7] - Long-term interest-bearing borrowings increased by 16.3% from RMB 8,415,871 thousand in 2022 to RMB 9,790,341 thousand in 2023[7] - Total liabilities rose from RMB 41,633,831 thousand in 2022 to RMB 43,653,676 thousand in 2023, an increase of 4.8%[7] - Shareholders' equity attributable to the company decreased by 7.6% from RMB 13,371,526 thousand in 2022 to RMB 12,349,587 thousand in 2023[7] - Net current liabilities improved from RMB 7,677,469 thousand in 2022 to RMB 5,104,679 thousand in 2023, a reduction of 33.5%[7] - Convenience food segment assets decreased to RMB 16,669,443 thousand as of June 30, 2023, compared to RMB 20,015,049 thousand as of December 31, 2022[15] - Beverage segment assets increased to RMB 35,623,515 thousand as of June 30, 2023, compared to RMB 34,145,275 thousand as of December 31, 2022[15] - Total liabilities increased to RMB 43,653,676 thousand as of June 30, 2023, compared to RMB 41,633,831 thousand as of December 31, 2022[15] - The company's total assets and total liabilities as of June 30, 2023 were RMB 59.308 billion and RMB 43.654 billion, respectively, with a debt ratio of 73.61%, up 2.38 percentage points from December 31, 2022[55] - The net debt-to-capital ratio decreased from -16.97% at the end of 2022 to -29.89% as of June 30, 2023[55] Dividends and Shareholder Returns - The company approved a final and special final dividend of RMB 2,632,371 thousand for 2022, a decrease of 39.2% compared to the RMB 3,802,482 thousand dividend approved for 2021[9] - The company did not declare an interim dividend for the first half of 2023, compared to a special interim dividend of RMB 44.38 cents per share in 2022[22] Financial Instruments and Investments - Exchange rate differences resulted in a gain of RMB 13,788 thousand in 2023, compared to a loss of RMB 756,978 thousand in 2022[9] - The company's financial assets measured at fair value under Level 3 amounted to RMB 413,914,000 as of June 30, 2023[31] - Total financial assets at fair value through profit or loss increased to RMB 258,488 thousand as of June 30, 2023, compared to RMB 254,349 thousand at the beginning of the period[33] - Non-listed equity securities at fair value through other comprehensive income decreased to RMB 155,426 thousand as of June 30, 2023, from RMB 158,518 thousand at the beginning of the period[33] - Capital expenditure commitments for property, plant, and equipment increased to RMB 772,710 thousand as of June 30, 2023, compared to RMB 541,830 thousand as of December 31, 2022[40] - Purchases of financial assets at fair value through profit or loss amounted to RMB 31,898 thousand as of June 30, 2023, with no such purchases in the previous year[40] - The fair value of Level 3 financial instruments was determined using unobservable inputs such as expected growth rates and average price-to-sales ratios of comparable companies[34] - The valuation process for Level 3 financial instruments involves annual discussions with investment managers and trustees to review valuation techniques and inputs[38] - The company's financial department reviews the valuation of investment funds and non-listed equity securities, ensuring consistency with previous year's assumptions[36] Corporate Governance and Shareholder Structure - The company has complied with the Hong Kong Stock Exchange's Corporate Governance Code, except for deviations from Code Provisions B.2.2 and B.2.4, which are deemed in the company's best interest[60] - The company's three independent non-executive directors have served for over nine years, with Xu Xinqun serving for 22 years, Li Changfu for 18 years, and Fukada Hiroshi for 11 years, and the board believes their long tenure does not compromise their independence[60] - The company has established a risk management and internal control system based on the COSO framework, with no significant deficiencies identified as of June 30, 2023[63][64] - The company did not grant any share options under the 2008 Share Option Scheme during the six months ended June 30, 2023[67] - The 2008 Share Option Scheme, which expired in 2018, was replaced by the 2018 Share Option Scheme, approved by shareholders on April 26, 2018, with a 10-year term[66] - The company's audit committee, chaired by Li Changfu, reviewed the group's performance during the period[62] - The company's internal control and risk management system aims to control overall risk at an acceptable level, ensuring operational efficiency, asset security, and compliance with regulations[63] - The company has not purchased, sold, or redeemed any of its shares during the review period[66] - The company's board ensures the timely publication of financial statements in compliance with statutory requirements and applicable accounting standards[61] - The company continues to expand subsidiary supervision, prioritizing the establishment of management norms for high-risk processes[64] - The company's employees exercised a total of 192,000 share options during the first half of 2023, with a weighted average exercise price of HKD 8.93 and a weighted average closing price before exercise of HKD 12.58[69] - The total number of share options outstanding as of June 30, 2023, was 25,763,000 under the 2008 Share Option Scheme[69] - No share options were exercised under the 2018 Share Option Scheme during the first half of 2023[73] - The 2018 Share Option Scheme has a total of 6,263,000 share options outstanding as of June 30, 2023[73] - The company's former chairman, Wei Yingzhou, indirectly holds 1,882,927,866 shares through Profit Surplus Holdings Limited and Profit Surplus 3 Holdings Limited[70][74] - Chairman Wei Hongming holds 5,000,000 shares, representing 0.09% of the total shares[76] - CEO Wei Hongcheng holds 5,000,000 shares, representing 0.09% of the total shares[76] - Tingyi (Cayman Islands) Holding Co., Ltd. holds 1,882,927,866 shares, representing a significant portion of the company's total shares[77] - Wei Yingzhou holds 13,942,000 shares and 3,682,000 share options[77] - The board of directors includes six executive directors and three independent non-executive directors as of the announcement date[78] Operational Efficiency and Turnover - The company's finished goods turnover period improved to 18.70 days from 20.77 days at the end of 2022[56] - The company employed 65,956 people as of June 30, 2023[56] - The company has deepened partnerships with 66 universities and 32 vocational schools nationwide, reaching hundreds of thousands of people through recruitment activities[57] - The company actively participated in the "2023 Shanghai International Carbon Neutral Technology, Products, and Achievements Expo" and shared its green, low-carbon, and high-quality development path[58] - The company plans to focus on core categories in the beverage business, adjust product structures, and leverage peak seasons to drive sales growth[59] - The company is accelerating digital transformation in supply chain management, data platform construction, and information security[59] Related Party Transactions - Sales to joint ventures increased to RMB 455,357 thousand in the first half of 2023, compared to RMB 438,771 thousand in the same period of 2022[41] - Purchases from companies controlled by directors and their relatives decreased to RMB 3,031,420 thousand in the first half of 2023, compared to RMB 3,176,023 thousand in the same period of 2022[41] - Distribution costs paid to companies controlled by family members of directors increased to RMB 886,256 thousand in the first half of 2023, compared to RMB 858,490 thousand in the same period of 2022[41] Other Financial Metrics - EBITDA rose by 25.87% to RMB 4,301.71 million[2] - Basic earnings per share increased by 6.82 cents to 29.07 cents[2] - Net debt to capital ratio was -29.89%[2] - Basic earnings per share increased to RMB 29.07 cents for the first half of 2023, compared to RMB 22.25 cents for the same period in 2022[20] - Diluted earnings per share increased to RMB 29.04 cents for the first half of 2023, compared to RMB 22.24 cents for the same period in 2022[21] - Accounts receivable within 0 to 90 days increased to RMB 1,970,780 thousand as of June 30, 2023, compared to RMB 1,686,700 thousand as of December 31, 2022[24] - Accounts receivable over 90 days increased to RMB 131,582 thousand as of June 30, 2023, compared to RMB 121,581 thousand as of December 31, 2022[24] - The company issued 192,000 shares under the share option plan, with a total consideration of RMB 1,532,000, of which RMB 7,000 was allocated to issued share capital and RMB 1,525,000 to the share premium account[25] - The company's interest-bearing loans due within one year decreased to RMB 7,834,264,000 as of June 30, 2023, compared to RMB 9,203,139,000 as of December 31, 2022[26] - The company issued notes with a book value of USD 497,594,000 (approximately RMB 3,610,541,000) as of June 30, 2023, listed on the Singapore Exchange[27] - The company's accounts payable increased to RMB 9,943,722,000 as of June 30, 2023, from RMB 9,489,908,000 as of December 31, 2022[28] - The company sold a subsidiary for a total consideration of approximately RMB 220,469,000, resulting in a net gain of RMB 154,416,000[29]

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 40,907,456 thousand, an increase of 7.04% compared to RMB 38,216,878 thousand for the same period in 2022[2] - Gross profit margin improved to 30.47%, up 2.25 percentage points from 28.22% in the previous year[2] - EBITDA increased by 25.87% to RMB 4,301,711 thousand, compared to RMB 3,417,618 thousand in the same period last year[2] - Net profit for the period rose by 28.66% to RMB 1,922,879 thousand, up from RMB 1,494,574 thousand in 2022[2] - Profit attributable to shareholders increased by 30.66% to RMB 1,637,670 thousand, compared to RMB 1,253,367 thousand in the previous year[2] - Basic earnings per share increased to RMB 29.07, up 6.82 cents from RMB 22.25 in the same period last year[2] Cash and Debt Management - Cash and cash equivalents as of June 30, 2023, were RMB 21,315,616 thousand, an increase of RMB 1,427,263 thousand from December 31, 2022[2] - The net debt to equity ratio stood at -29.89% as of June 30, 2023[2] - Total liabilities rose to RMB 43,653,676 thousand, compared to RMB 41,633,831 thousand at the end of 2022[7] - The debt ratio increased by 2.38 percentage points to 73.61% compared to December 31, 2022[35] Revenue Breakdown - For the six months ended June 30, 2023, total revenue reached RMB 40,871,653 thousand, with significant contributions from instant noodles (RMB 13,913,767 thousand) and beverages (RMB 26,600,680 thousand) [10] - The revenue from customer contracts for the same period increased from RMB 38,176,719 thousand to RMB 40,871,653 thousand, reflecting a growth in both instant noodles and beverage segments [11] - Beverage business revenue for the first half of 2023 reached RMB 26.606 billion, a year-on-year growth of 9.50%, accounting for 65.04% of the group's total revenue[29] Operational Efficiency - As of June 30, 2023, the inventory turnover period improved to 18.70 days from 20.77 days in 2022, and accounts receivable turnover period decreased to 8.65 days from 8.93 days[37] - The current ratio increased to 0.84 from 0.76, while the debt ratio rose to 73.61% from 71.23%[37] Corporate Governance and Compliance - The board of directors has complied with the corporate governance code, with some deviations noted regarding the rotation of independent non-executive directors[40] - The audit committee, consisting of three independent non-executive directors, recently reviewed the company's performance during the reporting period[42] - The group has established a risk management framework based on the COSO model, focusing on five elements: control environment, risk assessment, control activities, information and communication, and monitoring activities[43] - The group continues to expand its regulatory monitoring and anti-fraud initiatives as part of its internal control culture[44] Social Responsibility and ESG Efforts - The company actively participates in social responsibility initiatives, including support for rural development and donations to various organizations[38] - The company received multiple awards for its environmental, social, and governance (ESG) efforts, including recognition from the People's Daily and Forbes[38] Employee and Talent Management - The group has a total of 65,956 employees as of June 30, 2023, emphasizing the importance of talent in business success[35] - The group is actively engaging in partnerships with 66 universities and 32 vocational schools to enhance talent acquisition[35] Product Development and Market Strategy - The company continues to focus on consolidating core products while expanding product flavors and specifications, aiming to meet diverse consumer needs[24] - New product launches include "无糖冰红茶" and "生可乐," focusing on health trends and appealing to younger consumers[30][31] - The beverage segment will focus on core categories and adjust product structures to cater to multiple consumer scenarios, leveraging peak seasons to drive sales growth[39] Stock Options and Shareholder Engagement - During the six months ending June 30, 2023, the group granted no stock options under the 2008 Stock Option Plan[47] - A total of 192,000 stock options were exercised during the six months ending June 30, 2023, with a weighted average exercise price of HKD 8.93 and a weighted average closing price of HKD 12.58 prior to the exercise date[50] - The stock options are part of the company's strategy to incentivize key personnel and align their interests with shareholders[51]

Financial Performance - Revenue for 2022 was RMB 78,717,420, an increase of 6% from RMB 74,082,292 in 2021[10] - Profit for the year decreased to RMB 3,075,834, down 30% from RMB 4,383,667 in 2021[10] - Profit attributable to owners of the Company was RMB 2,632,312, a decline of 31% compared to RMB 3,802,482 in the previous year[10] - Basic earnings per share for 2022 was 46.73 RMB cents, down from 67.57 RMB cents in 2021[10] - The gross profit margin for the year declined by 1.30 percentage points to 29.09%, while the ratio of distribution costs to revenue rose by 0.15 percentage points to 21.35%[25][28] - EBITDA decreased by 14.07% year-on-year to RMB 7.210 billion, and profit attributable to shareholders contracted by 30.77% to RMB 2.632 billion[25][28] Market Position and Strategy - As of December 31, 2022, the Company had a market capitalization of US$10 billion[8] - The Group aims to become the largest Group for Chinese Instant Food & Beverage in the world, focusing on food manufacture, sales, and distribution[8] - The Group's strategy for 2022 included consolidating, reforming, and developing its market presence, particularly in mass consumer and middle-class markets[25][27] - Master Kong has been ranked among the Top Three Brands as First Choice by Chinese Consumers for ten consecutive years according to the Kantar Brand Footprint Report[27] Product Development and Innovation - The company launched a variety of sugar-reduced and oil-reduced products in response to the "Healthy China" initiative[16] - New product launches such as "Golden Stock Beef Noodles" and "Light Spicy Pickled Vegetables Beef Flavor Noodles" saw rapid increases in product penetration rates[33] - The company launched new flavors such as "Rock Candy Red Grapefruit" and "NutriLight Fruits" to enhance its juice product offerings[38] - The bottled water segment introduced a 5L super-large packaging to cater to household and catering consumption needs[40] - "Starbucks Ready-to-Drink Coffee" saw an upgrade in its Bottled Frappuccino and launched new Mini Bottled Frappuccino and Oat Latte flavors, achieving outstanding overall sales performance[43] Sales and Distribution - The Group operates an extensive sales network with 337 sales offices and 322 warehouses serving 76,528 wholesalers and 254,975 direct retailers[7] - The beverage business generated a total revenue of RMB 48.336 billion in 2022, representing a year-on-year growth of 7.89% and accounting for 61.40% of the Group's total revenue[35] - The instant noodles segment generated revenue of RMB 29.634 billion, accounting for 37.65% of total revenue, with a gross margin of 23.95%[29][30] Employee and Organizational Development - Master Kong's employee count increased to 64,302 in 2022, up from 62,107 in 2021, marking a growth of about 3.5%[14] - The Group aims to enhance its core competitiveness by focusing on scale, brand, innovation, system, and talent, while continuing to expand its main operating business[53] - The company is focused on digital transformation and building a team of professional talents for long-term development[17] Sustainability and ESG Initiatives - The Company aims to build a trustworthy "Chinese National Brand" in the food and beverage sector, ensuring satisfaction for government, business partners, and consumers[57] - In 2022, the Company adhered to ESG-related laws and regulations, integrating ESG management into its strategic development and daily operations[68] - Master Kong's Sustainable Development Committee is chaired by the Chairman and CEO, focusing on ESG strategy and performance evaluation through four working groups: Beverage Resources, Instant Noodle Resources, Product Research and Development, and Communication[75] - The company emphasizes health-oriented products and expanded consumer purchase channels to meet diverse consumer needs[35] Food Safety and Quality Control - The company has implemented its own standard "K-GMP" (Good Manufacturing Practices) to strengthen food safety and quality management systems[103] - Master Kong's food safety management system includes external inspections of raw material suppliers and comprehensive testing throughout the production process[102] - The company emphasizes the importance of food safety as a foundation for building consumer trust in its brand[101] - Master Kong has conducted food safety publicity month campaigns for 9 consecutive years, focusing on safety awareness and risk investigation, leading to over 30 food safety theme activities with nearly 20 key raw material suppliers[105] Digital Transformation and Technology - The company is focusing on digital transformation and enhancing supply chain efficiency to better serve customers and consumers[27][31] - Master Kong completed equipment renovation and digitalization of daily business processes in its digital pilot factories in 2022, achieving real-time monitoring and management of equipment status[199] - The digital factory will establish a full production process from material input to shipment, collecting all quality-related data to build a quality database for full life-cycle traceability[199] Environmental Management - Master Kong aims to reduce plastic usage and promote recycling through various internal management systems and waste management measures[186] - The company has established management policies and systems for energy conservation, emission reduction, and sustainable raw material procurement[163] - By the end of 2022, Master Kong installed 90 sets of exhaust gas disposal equipment, reducing emissions by approximately 1,100 tonnes of exhaust gas per year[182] Customer Engagement and Feedback - The company has established a Customer Service Management Procedure to manage customer feedback and ensure timely responses[128] - Master Kong received 12,545 customer complaints during the year, achieving a satisfactory resolution rate of 96%[128] - The company has established a customer service team to facilitate the collection and feedback of consumer suggestions and inquiries[129]