Health and Happiness (H&H) International Holdings Limited 健合(H&H)國際控股有限公司 （於 開 曼 群 島 註 冊 成 立 之 有 限 公 司） （股 份 代 號：1112） 董事名單與其角色和職能 健 合(H&H)國際控股有限公司（「本公司」）董事會（「董事會」）成員自二零二五年 八 月 二 十 六 日 起 載 列 如 下： 非執行董事 Laetitia Albertini女 士 張文會博士 羅云先生 Mingshu Zhao Wiggins女 士 獨立非執行董事 陳偉成先生 駱劉燕清女士 丁遠教授 董 事 會 設 立 四 個 委 員 會。各 董 事 會 成 員 在 該 等 委 員 會 中 所 擔 任 的 職 位 的 情 況 如 下。 審核委員會 丁遠教授 （委 員 會 主 席） 陳偉成先生 羅云先生 執行董事 羅飛先生 （主 席） 王亦東先生 提名委員會 羅飛先生 （委 員 會 主 席） 陳偉成先生 駱劉燕清女士 – 1 – 薪酬委員會 陳偉成先生 （委 員 會 主 席） 羅飛先生 駱劉燕清女士 環 境、社 會 及 管 治 委 員 會 Laet ...

Financial Performance - Revenue for the six months ended June 30, 2025, was RMB 7,019.2 million, an increase of 4.9% compared to RMB 6,692.1 million for the same period in 2024[2]. - Gross profit for the same period was RMB 4,389.1 million, reflecting a growth of 7.8% from RMB 4,072.3 million in 2024[2]. - Net profit decreased significantly by 76.8% to RMB 71.0 million from RMB 305.8 million year-on-year[2]. - Adjusted comparable net profit increased by 4.6% to RMB 363.0 million compared to RMB 347.2 million in the previous year[2]. - EBITDA for the six months was RMB 1,033.1 million, down 5.9% from RMB 1,098.4 million in 2024[2]. - Adjusted comparable EBITDA margin decreased by 1.3 percentage points to 15.7% from 17.0% in the previous year[2]. - The overall comprehensive income for the period was RMB 225.4 million, compared to RMB 265.2 million in the same period last year[9]. - The company reported a pre-tax profit of RMB 306,292 thousand for the six months ended June 30, 2025, down from RMB 523,939 thousand, a decrease of 41.54%[13]. - Adjusted comparable EBITDA for the first half of 2025 was RMB 1,100.7 million, a decrease of 3.4% from the previous year, with the EBITDA margin declining from 17.0% to 15.7%[92]. Assets and Liabilities - Non-current assets totalled RMB 14,331,162 thousand as of June 30, 2025, compared to RMB 14,219,781 thousand as of December 31, 2024, reflecting an increase of 0.78%[10]. - Current assets increased to RMB 5,064,338 thousand from RMB 4,622,641 thousand, representing an increase of 9.56%[10]. - Total liabilities amounted to RMB 13,384,016 thousand, up from RMB 12,744,038 thousand, indicating a rise of 5.02%[11]. - The company's total equity decreased to RMB 5,813,371 thousand from RMB 6,009,377 thousand, a decline of 3.26%[11]. - The total value of non-current liabilities was RMB 9,156,682 thousand, slightly down from RMB 9,158,615 thousand, a decrease of 0.02%[11]. - As of June 30, 2025, the group's outstanding borrowings amounted to RMB 9,174.1 million, including current borrowings of RMB 944.0 million[104]. - The debt-to-asset ratio decreased from 49.3% as of December 31, 2024, to 47.3% as of June 30, 2025[104]. - The net leverage ratio improved from 3.99 times as of December 31, 2024, to 3.89 times as of June 30, 2025[104]. Cash Flow - The net cash flow from operating activities was RMB 998,033 thousand for the six months ended June 30, 2025, compared to RMB 1,052,540 thousand for the same period in 2024, a decrease of 5.18%[13]. - Net cash flow used in investing activities was RMB (31,385) thousand, compared to RMB 8,389 thousand in the previous year, indicating a significant decrease in cash inflow from investments[14]. - Net cash flow used in financing activities was RMB (706,534) thousand, a substantial increase from RMB (86,704) thousand in the prior year, reflecting higher financing costs and repayments[15]. - The net increase in cash and cash equivalents for the six months ended June 30, 2025, was RMB 260,114 thousand, down from RMB 974,225 thousand in the same period of 2024[15]. - The ending cash and cash equivalents balance as of June 30, 2025, was RMB 1,812,024 thousand, compared to RMB 2,379,094 thousand at the end of June 30, 2024, showing a decrease of approximately 23.8%[15]. - As of June 30, 2025, cash and cash equivalents, along with structured deposits, totaled RMB 1,812.0 million[103]. Market Performance - Revenue from the Mainland China market was RMB 4,936,033 thousand, up from RMB 4,541,353 thousand year-over-year, indicating a growth of about 8.7%[24]. - Revenue from nutritional supplements reached RMB 4,606.0 million, a 4.1% increase year-over-year, accounting for 65.6% of total revenue[70]. - Revenue from adult nutrition and care products in mainland China grew by 13.1% year-over-year, representing 70.0% of total revenue in this segment[73]. - Revenue from infant formula in mainland China increased by 10.0% to RMB 1,904.9 million, driven by effective consumer education strategies[74]. - Revenue from pet nutrition and care products in mainland China rose by 17.5% to RMB 204.9 million, with new high-margin products accounting for 33.8% of total revenue in this segment[76]. - The infant nutrition and care segment saw a 10.0% increase in sales of infant formula in the Chinese market, with market share in the ultra-premium segment reaching a historical high of 15.9%[48]. - The pet nutrition and care segment contributed 15.4% to total revenue, driven by a strong growth of 13.4% from Zesty Paws and a 17.5% recovery in the Chinese market[48]. - Cross-border e-commerce sales in mainland China grew by 18.1%, accounting for 81.5% of the adult nutrition and care products revenue[55]. Costs and Expenses - Sales and distribution costs increased by 12.4% to RMB 2,883.9 million, with the percentage of these costs relative to revenue rising from 38.3% to 41.1%[84]. - The sales and distribution costs for the adult nutrition and care segment rose by 19.2% year-on-year, reflecting strategic investments in new expansion markets[85]. - Advertising and marketing expenses for pet nutrition and care products increased from 12.4% to 13.2% of revenue, primarily due to investments in new product launches[88]. - Administrative expenses slightly decreased by 1.8% to RMB 398.5 million, representing 5.7% of total revenue, down from 6.1%[89]. - Research and development expenses decreased by 7.8% to RMB 95.9 million, accounting for 1.4% of total revenue, down from 1.6%[90]. Corporate Governance - The company has complied with all corporate governance codes as of June 30, 2025, and will continue to enhance its governance practices[113]. - The audit committee, established on November 25, 2010, is responsible for overseeing financial reporting and internal controls[116]. - The interim financial statements for the six months ending June 30, 2025, have been reviewed by the independent auditor, Ernst & Young[117]. - The audit committee consists of three members, all of whom are non-executive directors, with a majority being independent[116]. Taxation - The corporate income tax rate for the group's business in mainland China is set at 25% until June 30, 2024[32]. - The subsidiary, Biostime Healthy (Guangzhou) Health Products Co., Ltd., is recognized as a high-tech enterprise and will pay corporate income tax at a reduced rate of 15% from 2023 to 2025[33]. - The company is involved in a tax dispute with the Australian Taxation Office, with a potential tax liability of AUD 234.5 million, plus interest and penalties[111]. - A cash deposit of AUD 1.04 million was paid to the Australian Taxation Office as part of the tax dispute resolution process[112]. - The company continues to seek legal counsel regarding the tax dispute and believes the likelihood of a cash outflow is low[112].

Core Viewpoint - The "Special Food Festival - New Consumption Industry Development Conference" held in Beijing focuses on the new consumption trends in the special food industry, emphasizing technological innovation, market trend analysis, and industry self-discipline to promote high-quality development and sustainability in the sector [1] Group 1: Industry Trends and Standards - The nutrition and health industry is entering a "new golden age," with a critical need to meet consumer demands and help them identify quality nutrition products [2] - The lack of universal nutritional supplementation standards for children aged 0-18 years is a significant issue, prompting the establishment of a quantitative system for nutritional supplementation tailored to different age groups [2] - The conference initiated the "Quality Nutrition Benchmark Leadership" proposal to foster a trustworthy, standardized, and innovative industry environment [3] Group 2: Company Initiatives and Contributions - The company, as a leader in the global high-end nutrition and health industry, actively participates in discussions and proposes industry development suggestions [1] - The company promotes the "Three Truths" standard (true quality, true effectiveness, true safety) through its Swisse brand, aiming to build consumer trust and support the standardization of the special food industry [2] - The company is committed to the construction of group standards and aims to enhance the nutritional health industry by collaborating with industry peers to meet market demands with precise solutions [3]

Core Viewpoint - H&H International Holdings (01112) is experiencing positive momentum in its stock price, with a current increase of 2.84% to HKD 12.33, driven by optimistic forecasts regarding its milk powder business and overall market positioning [1] Group 1: Company Performance - The milk powder business is expected to see positive growth starting from Q1 2025, following a period of inventory clearance and replenishment due to new national standards [1] - The sales performance has exceeded expectations post-replenishment, with a projected growth rate of over 40% in Q1 2025 [1] Group 2: Analyst Ratings and Price Targets - Changjiang Securities has a favorable outlook on the company's long-term brand management capabilities and its positioning as a global supplier of nutritional products for families [1] - Morgan Stanley has upgraded its target price for H&H from HKD 11.5 to HKD 13.4, citing a low base for milk powder sales in the second half of the year and strong demand for stage 1-2 milk powder products [1]

Group 1 - H&H International Holdings (01112) saw a stock increase of over 3%, currently trading at 12.33 HKD with a transaction volume of 38.45 million HKD [1] - Changjiang Securities reported that the company's milk powder business is expected to experience positive growth in Q1 2025 after a period of inventory clearance and replenishment following new national standards, with a growth rate exceeding 40% [1] - Morgan Stanley upgraded H&H's target price from 11.5 HKD to 13.4 HKD, citing strong demand for stage 1-2 milk powder products and a low base for the second half of the year, predicting improved performance in upcoming quarters [1]

Group 1 - The core viewpoint is that under the expectation of interest rate cuts by the Federal Reserve, the global capital market is experiencing new variables, and Jianhe Group is a typical beneficiary due to its forward-looking financial layout [1] Group 2 - By the end of 2023, Jianhe Group faced a short-term borrowing pressure exceeding 4.7 billion yuan, a year-on-year increase of 378%. The group effectively aligned its financing strategy with the Federal Reserve's policy cycle, showcasing excellent financial management capabilities [2] - In the third quarter, Jianhe Group completed offshore syndicated financing equivalent to 150 million USD, followed by 540 million USD financing in the fourth quarter. In January 2025, the company issued 3.5-year USD senior notes at favorable coupon rates to refinance debts maturing in 2026, successfully extending debt maturity and reducing financing costs [2] - As of June 2025, Jianhe Group's cash balance reached 1.83 billion yuan, with a net debt ratio expected to drop to 3.4 times by the end of 2024. The proportion of RMB debt is 36.1%, with new debt primarily in low-cost USD [2] Group 3 - Jianhe Group's current price-to-book ratio is approximately 1, significantly lower than the average levels of 2-6 times for leading companies in the health sector in A-shares and around 2 times for international health enterprises, indicating a clear valuation gap [3] - The anticipated interest rate cuts by the Federal Reserve are expected to boost market investment sentiment, and as an undervalued quality stock, Jianhe Group is likely to experience capital repricing [3] - The company has established a dual growth engine with steady development in adult nutrition and care products, while the pet nutrition and care segment is performing well, with Zesty Paws covering over 18,000 stores in the U.S. and accelerating its global market expansion [3] Group 4 - The 2024 financial report indicates that Jianhe Group's nutritional supplement business achieved double-digit growth, with significant results in channel and product innovation in the Chinese mainland market, and continuous expansion in the North American pet nutrition business [4] - The company plans to consolidate its position in the North American market through an omnichannel strategy and product innovation while expanding into Europe, Asia, and the Oceania regions [4] - With proactive debt management optimizing its financial structure and strong growth momentum in core businesses, Jianhe Group is poised to benefit from both performance improvement and valuation recovery, further releasing its value potential as a global health giant [4]

Core Insights - The Chinese infant formula market is undergoing significant transformation, with newborn numbers dropping from 14.65 million in 2019 to 9.54 million in 2024, leading to a 13.9% year-on-year decline in industry scale for 2023. However, the ultra-premium segment is experiencing a 4.2% growth, indicating a structural differentiation within the market [1][3]. Group 1: Market Trends - The ultra-premium infant formula market is entering a critical growth phase in 2023, with the implementation of new national standards accelerating industry reshuffling, resulting in smaller brands exiting the market and larger, technologically advanced brands gaining more space [3]. - By 2024, the market share of ultra-premium infant formula is expected to reach 37%, an increase of 4.2 percentage points from 2023 [3]. Group 2: Company Performance - The company, Jianhe Group, has shown remarkable performance amidst industry changes, with a 46.9% year-on-year increase in its infant formula business in Q1 2025, and its ultra-premium market share rising to 15.6% [1][3]. - Jianhe Group's brand, Biostime, has effectively captured market trends, with its Paixing series benefiting from core formulations like LPN and SN-2 PLUS, leading to sales growth of 55.4% and 8.7% for its first and second stages, respectively, in the first two months of 2025 [3]. Group 3: Sales and Distribution Strategy - In response to a 9.8% decline in offline sales, Jianhe Group adopted a "dual-channel drive" strategy, achieving a 117% year-on-year increase in GMV during the Double Eleven shopping festival in 2024, and enhancing offline sales through 2,263 parent-child events, resulting in a 27% increase in actual sales [6]. - The company has improved customer acquisition efficiency, with a 25% increase in new customers in 2024 [6]. Group 4: Supply Chain and Product Innovation - Jianhe Group has optimized its supply chain, reducing inventory turnover days from 159 in 2023 to 150 in 2024, showcasing strong inventory management capabilities [8]. - The company is expanding its product offerings beyond infant formula to include innovative products like lactoferrin and probiotics, as well as entering the children's nutrition market with the launch of Biostime's children's milk powder targeting ages 3-14 [8]. - The company is successfully transitioning from quantity to quality through high-end products, multi-channel operations, and extending user lifecycle value, positioning itself as a model for the entire maternal and infant industry amid declining population dividends [8].

智通财经APP获悉，摩根士丹利发布研报称，调整部分内地消费品股目标价。在获该行"与大市同步"评 级内地消费品股中，认为H&H国际控股(01112)有较高的重新评级的可能性。 该行对H&H目标价由11.5港元升至13.4港元，评级"与大市同步"，认为下半年奶粉基数较低，且1-2阶段 奶粉产品需求强劲，预计未来几季表现改善。该行降H&H国际今明两年收入预测分别11%及10%，纯利 预测降29%及25%。 该行对高鑫零售(06808)目标价由2.4港元降至2.3港元，评级"与大市同步"，预期2026财年同店销售增长 稳定或轻微正增长。另外，新控股股东上场后，股东回报计划和新店模式可能成为股价驱动因素。该行 降高鑫今明两年收入预测分别1%及3%，纯利预测则分别降2%及上调5%。 该行对恒安国际(01044)目标价由24港元降至21港元，评级"与大市同步"，预计卫生巾销售受新兴品牌 及线上和直播促销的压力，令上半年公司销售下降15%至20%。考虑到卫生巾是公司主要盈利来源，若 下半年持续疲软，明年盈测可能面临进一步下调风险。该行降恒安国际今明两年收入预测分别2%及 1%，纯利预测降18%及13%。 ...

Investment Rating - The report maintains an "Increase" rating for the food and beverage industry, indicating a positive outlook for the sector [4]. Core Insights - The report highlights that the liquor industry is gradually releasing pressure from distribution channels, indicating a potential for future growth. It suggests focusing on three main lines: leading brands, high-certainty regional liquors, and elastic stocks benefiting from recovery and increased risk appetite [1][2]. - The snack sector shows significant growth potential, with companies like Yanjing Beer and Zhujiang Beer being highlighted for their strong performance. The report emphasizes the importance of channel leadership and growth potential in selecting stocks [3][6]. Summary by Sections Liquor Industry - The report notes that the liquor industry is experiencing a deep adjustment, shifting from scale growth to high-quality development. It emphasizes the importance of brand strength and strategic initiatives to capture new consumer trends [2]. - The expected revenue for Zhenjiu Lidong in H1 2025 is projected to be between 2.4 billion to 2.55 billion yuan, reflecting a year-on-year decline of 38.3% to 41.9% due to economic uncertainties and policy impacts [2]. Beer and Beverage Sector - The beer segment shows promising results, with Huiquan Brewery reporting a revenue of 351 million yuan in H1 2025, a year-on-year increase of 1.03%, and a net profit of 40 million yuan, up 25.52% [3]. - Unified Enterprises China achieved a revenue of 17.087 billion yuan in H1 2025, representing a 10.6% year-on-year growth, with a net profit of 1.287 billion yuan, up 33.2% [3]. Snack Sector - The snack sector is highlighted for its recovery in stock prices, with expectations for continued high growth due to new product launches and channel transformations. The report notes a narrowing decline in raw milk prices, which may positively impact the dairy segment [6].

Group 1 - The "Special Food Festival - New Consumption Industry Development Conference" was held in Beijing, focusing on the new consumption field of the special food industry, discussing high-quality development paths [1] - Key industry representatives attended the conference, including members from the China Nutrition and Health Food Association and experts from various institutions [3] - The conference highlighted the importance of meeting consumer needs in the nutrition and health industry, marking the beginning of a "new golden era" for the sector [5] Group 2 - The conference featured a speech by Liu Wei from the company, emphasizing the importance of the "Three Truths" standard (true quality, true effectiveness, true safety) in building consumer trust and supporting industry standardization [5][11] - The company announced its participation in establishing a group standard for precise nutrition supplementation for children aged 0-18, aiming to create a clear and quantifiable nutritional standard [9] - An initiative titled "Quality Nutrition Leading the Way" was launched to promote a trustworthy and innovative industry environment, with the company actively participating in this effort [11] Group 3 - A roundtable discussion on the new consumption and high-quality development paths in the nutrition health industry was held, featuring experts from various fields [13] - The company expressed its commitment to building rigorous and scientific standards to meet market demands and enhance consumer benefits [15] - The company aims to lead the industry with high standards and collaborative efforts, promoting high-quality development through its PPAE business model [17]