Nissin Foods Company Limited 日 清 食 品 有 限 公 司 （ 於 香 港 註 冊 成 立 的 有 限 公 司 ） （股份代號：1475） 香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 本 公 告 之 內 容 概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不 對 因 本 公 告 全 部 或 任 何 部 份 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 之 任 何 損 失 承 擔 任 何 責 任。 內幕消息 控股股東 NISSIN FOODS HOLDINGS CO., LTD. 截 至2025年6月30日止三個月之 未經審核財務業績 本 公 告 乃 日 清 食 品 有 限 公 司（「本 公 司」，連 同 其 附 屬 公 司 統 稱「本 集 團」）根 據 香 港 聯 合 交 易 所 有 限 公 司 證 券 上 市 規 則（「上 市 規 則」）第13.09(2)條及香港法例第571章證券及期貨條例第XIVA部 之 內 幕 消 息 條 文 作 出。 本公 ...

Group 1: Company Overview - The company has been deeply engaged in the instant noodle business for over 70 years, establishing a solid position in the high-end market since its founding in 1984 [1] - The company is backed by Nissin Foods Group from Japan, with a concentrated shareholding structure and a core management team with decades of industry experience [1] - Projected revenue for 2024 is HKD 3.812 billion, with a net profit of HKD 207 million, indicating stable profitability and a gross margin increase to 34.42% [1] Group 2: Industry Trends - The growth rate of the instant noodle market is slowing, with the market size peaking at RMB 128.2 billion in 2013, facing challenges from prepared dishes and takeout services [1] - The frozen food industry is entering a high-speed development phase, with a market size of RMB 183.54 billion in 2023, expected to reach RMB 213.09 billion by 2025 [1] - The traditional main food category in the frozen food sector has a relatively concentrated and stable competitive landscape, while new categories are emerging with strong growth potential [1] Group 3: Brand and Product Strategy - The company has established a high-end brand image through its role as an industry standard setter and a continuous differentiation strategy [2] - Product innovation is driven by pioneering technology and a diverse brand matrix, catering to consumers' differentiated needs [2] - The company optimizes its distribution channels through a multi-channel approach, enhancing brand awareness and market share [2] Group 4: Financial Performance and Outlook - The core instant noodle business provides stable revenue support, while other food segments contribute to growth [2] - The company shows signs of recovery in revenue and profit, with mainland operations maintaining a high proportion and stable growth [2] - The company has effective cost control, with a stable cash flow supporting consistent dividend payouts [2] Group 5: Earnings Forecast - The company is projected to have EPS of HKD 0.27, 0.31, and 0.34 for 2025-2027, with corresponding PE ratios of 26X, 22X, and 20X [3]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [4]. Core Views - The company has a solid foundation in the instant noodle market, with a strong position in the high-end segment, and is leveraging overseas expansion for new growth [1][2]. - The company is experiencing a recovery in revenue and profit, driven by continuous product innovation and effective marketing strategies [2][3]. - The financial outlook is positive, with expected earnings per share (EPS) growth from 0.27 to 0.34 HKD from 2025 to 2027, indicating a resilient business model [3]. Summary by Sections Company Overview - The company has been a pioneer in the instant noodle industry since its establishment in 1984, defining global standards and leading the high-quality instant meal trend [1][17]. - It has a concentrated ownership structure, with the majority shareholder holding 72.05% of the shares, ensuring efficient strategic decision-making [24]. Financial Performance - The company’s revenue is projected to be 38.12 billion HKD in 2024, with a net profit of 2.07 billion HKD, reflecting stable profitability [1][3]. - The gross margin is expected to increase to 34.42% in 2024, with a recent recovery in the net profit margin to 10.45% [1][3]. - The company has maintained a stable expense ratio, indicating efficient operational management [2][30]. Industry Analysis - The instant noodle market in China has seen a slowdown in growth, with the market size reaching approximately 1240.14 billion HKD in 2024, but still presents opportunities for innovation and high-end transformation [2][46]. - The frozen food sector is entering a high-growth phase, with the market size expected to reach 2130.9 billion HKD by 2025, driven by evolving consumer preferences and improved logistics [2][46]. Investment Highlights - The core instant noodle business remains robust, while other food segments provide additional growth momentum [2][4]. - The company is effectively controlling costs and maintaining a strong cash flow, supporting consistent dividend payouts [2][3]. - The company is strategically exiting underperforming markets and focusing on Southeast Asia and Australia for expansion [21][24].

Revenue Performance - Revenue for the three months ended March 31, 2025, was HKD 1,071,933, an increase of 11.3% compared to HKD 963,015 for the same period in 2024[3] - The company's revenue for the period reached HKD 1,071.9 million, an increase of 11.3% compared to HKD 963.0 million in the same period of 2024[13] - Revenue from Hong Kong and other regions was HKD 401.4 million, while revenue from mainland China was HKD 670.6 million, contributing to the overall revenue growth[15] - The company experienced a 15.2% increase in revenue from Hong Kong and other regions, driven by strong performance across various sectors[13] - The company aims to expand sales in inland regions of China, contributing to a 9.1% increase in revenue from mainland China[13] Profitability - Gross profit for the same period was HKD 376,054, representing a gross margin of 35.1%, up from HKD 346,586 and a margin of 36.0% in 2024[3] - Gross profit for the period was HKD 376.1 million, up 8.5% from HKD 346.6 million in 2024, with a gross profit margin of 35.1%[17] - Net profit for the three months ended March 31, 2025, was HKD 111,667, a decrease of 6.3% from HKD 119,252 in 2024[3] - The profit attributable to the company's owners was HKD 110.0 million, a decrease of 6.7% from HKD 117.9 million in 2024[18] - Basic and diluted earnings per share for the period were HKD 10.54, down from HKD 11.30 in the previous year[3] - Adjusted EBITDA increased by 9.2% to HKD 201.5 million, with an adjusted EBITDA margin of 18.8%[19] Assets and Equity - Total assets as of March 31, 2025, were HKD 3,923,897, an increase from HKD 3,813,905 as of December 31, 2024[4] - Current assets decreased to HKD 2,409,421 from HKD 2,419,909, with cash and cash equivalents at HKD 1,068,124[4] - Total equity attributable to owners of the company increased to HKD 3,746,848 from HKD 3,620,162[5] - The company reported a decrease in trade payables to HKD 150,610 from HKD 174,117[4] Strategic Focus - The company continues to focus on expanding its product offerings in the frozen food and beverage segments[6] - The company is committed to maintaining its market position and exploring potential acquisitions to enhance growth opportunities[6] - The company has redefined its operating segments to include Hong Kong and other regions, mainland China, and headquarters, enhancing the relevance of segment reporting[13] - The company has independently accounted for relevant costs managed by headquarters to provide more relevant segment presentations[13] - The company does not recommend the payment of any dividends for the current period, consistent with the previous period[12]

Financial Performance - In 2024, the Group's revenue was HK$3,811.9 million, remaining almost flat year-on-year despite challenges, with a notable 8.4% year-on-year sales growth in the fourth quarter driven by instant noodles[17][20]. - Gross profit increased by 0.7% year-on-year to HK$1,312.1 million, with the gross profit margin improving from 34.0% to 34.4%[18][21]. - Net profit attributable to shareholders decreased by 39.1% year-on-year, from HK$330.2 million to HK$201.0 million, resulting in a profit margin of 5.3%[18][21]. - Adjusted EBITDA, excluding one-off non-cash expenses, increased by 0.8% year-on-year to HK$612.5 million, indicating resilient core business performance[18][21]. - Revenue for FY2024 decreased by 0.6% to HK$3,811.9 million compared to HK$3,833.2 million in FY2023[87]. - Basic earnings per share decreased to 19.26 HK cents from 31.64 HK cents in FY2023[88]. - Adjusted EBITDA rose by 0.8% to HK$612.5 million, with an Adjusted EBITDA margin of 16.1%[89]. - The total dividend payout ratio for the year is 82.1%, compared to 50.0% in 2023[92]. Acquisitions and Joint Ventures - In June 2024, the Group acquired Gaemi Food Co. Ltd., a leading snack food manufacturer in Korea, enhancing its market presence[23]. - In September 2024, the Group acquired ABC Pastry Holdings Pty Ltd, a frozen dumpling manufacturer in Australia, to capitalize on the growing demand for Chinese gourmet foods[24]. - A joint venture agreement was established in November 2024 with Nissin Foods Asia Co., Ltd. to promote Nissin brand instant noodles in Australia and New Zealand[25]. - The company acquired 100% equity interest in Gaemi Food for KRW48,000 million (approximately HK$271.7 million), expanding its non-noodle business portfolio[137]. - The Company acquired 100% issued share capital in ABC Pastry for AU$33.7 million (approximately HK$178.6 million), with the acquisition completed on December 2, 2024[179]. Market Strategies and Product Development - The Group conducted a trial-tasting promotion campaign for Cup Noodles in major cities in Mainland China, featuring over 30,000 trial tastings[26]. - The Group developed the WeChat Mini program "Nissin Foodium" in Hong Kong to enhance customer loyalty and brand recognition through digital marketing initiatives[27]. - The company aims to strengthen partnerships with distributors in Mainland China to increase sales of Cup Noodles and high-end bag-type noodles, capitalizing on the rising demand for authentic flavors[35]. - The distribution business has begun launching new products and brands, with a focus on expanding sales channels[36]. - In Hong Kong, the company is focusing on expanding sales of high-end bag-type noodles and premium frozen foods, including dim sum and pasta[37]. - The company plans to enhance sales of frozen dumplings in Australia to meet consumer demand and increase market share[41]. - The Company launched various new products in its non-noodle portfolio, including seasonal items and new flavors in the low-fat yogurt series[131]. Economic and Market Conditions - The company believes that steady economic growth will eventually return to both Mainland China and Hong Kong despite current market challenges[34]. - Consumer sentiment in Mainland China is expected to remain weak, with industry competition anticipated to remain intense, slowing the growth of complementary businesses[96]. - The Hong Kong economy recorded a moderate year-on-year growth of 2.5% in 2024, with visitor arrivals reaching 42.6 million, representing a year-on-year growth of 8.3%[118][122]. - Total retail sales value in Hong Kong declined by 7.3% year-on-year, primarily due to local consumers spending in the Greater Bay Area and a strengthening Hong Kong dollar[119][122]. - The retail industry in Vietnam is experiencing remarkable growth, driven by favorable economic conditions and changing consumer behavior, with a focus on healthy, high-quality products[171]. Impairment and Financial Adjustments - Total impairment losses amounted to HK$135.9 million, including HK$77.1 million on property, plant, and equipment related to complementary businesses in Mainland China and Hong Kong[93]. - The Group recognized an impairment loss of HK$6.8 million on property, plant, and equipment, and HK$7.9 million on right-of-use assets due to carrying amounts exceeding recoverable amounts[107]. - The Company confirmed goodwill impairment losses of approximately HK$22.7 million and customer relationship intangible asset impairment losses of approximately HK$12.5 million, totaling HK$35.2 million[121]. - The management revised downwards the sales forecasts for Shanghai Eastpeak for the five business years ending December 31, 2029, based on prudence and conservatism principles[116]. Operational Highlights - The Group's total assets amounted to HK$4,756.6 million, an increase from HK$4,683.7 million in 2023, while total equity was HK$3,670.0 million, slightly down from HK$3,674.7 million[157]. - The Group's working capital decreased to HK$1,477.2 million from HK$1,608.0 million in 2023, with a current ratio of 2.6 compared to 2.8 in the previous year[157]. - Capital expenditure for the year was approximately HK$570.4 million, significantly higher than HK$329.6 million in 2023, primarily due to acquisitions and investments in production plants[159]. - The Group had no external borrowing, maintaining a gearing ratio of nil as of December 31, 2024[158]. - As of December 31, 2024, the total number of staff increased to 3,737 from 3,409 in 2023, with staff costs amounting to approximately HK$733.6 million[186][188].

Summary of Conference Call Company Overview - The conference call pertains to Nikkei Foods, which reported its full-year results for 2024 on March 26. [1] Key Financial Performance - The company's revenue for 2024 was slightly down by approximately 0.5%, attributed to stable performance in the instant noodle segment. [1][2] - Domestic revenue faced a minor decline due to currency exchange impacts, but gross profit and gross margin showed improvement. [2] - A significant drop in net profit was noted, primarily due to an asset impairment of approximately 13.5 billion. [2][6] - The balance sheet remains healthy, supported by two acquisitions in South Korea and Australia. [2][3] Regional Performance - The Hong Kong and other Asian markets experienced a slight revenue growth of about 1.9%, despite local consumption being affected by consumer outflow. [3][4] - Sales of frozen food products in Hong Kong declined, influenced by local consumers shopping abroad. [4] - Domestic sales of instant noodles remained stable, with a slight increase driven by new product offerings. [5] Cost and Profitability - Administrative and sales expenses increased due to higher promotional costs and expenses related to acquisitions. [6] - The company maintained a dividend payout ratio of around 50%, aiming to provide stable returns to shareholders despite the net profit decline. [7][23] - The gross margin for 2024 improved mainly due to cost savings, particularly in raw materials like palm oil and flour. [14][15] Future Outlook - For the first two months of 2025, the company reported a double-digit growth in domestic revenue, indicating a positive trend in consumer spending. [8][10] - The management anticipates a double-digit growth target for 2025, driven by the integration of new acquisitions and improved domestic performance. [10][12] - The company plans to focus on expanding its presence in the southern region of China and enhancing relationships with existing customers. [9][22] Acquisitions and Strategic Initiatives - The acquisitions in South Korea and Australia are expected to contribute significantly to revenue growth, with the South Korean company holding a market share of 50-60%. [19][20] - The Australian acquisition aims to diversify product offerings and leverage local distribution channels. [20] Dividend Policy - The management intends to maintain a stable dividend policy, with a focus on providing consistent returns to shareholders. [23][29] Additional Insights - The company is cautious about pricing pressures but has not made significant price adjustments, maintaining stable pricing strategies. [26][27] - The management is optimistic about the recovery of domestic consumption and believes that the worst is behind them. [8][28] This summary encapsulates the key points discussed during the conference call, highlighting the company's financial performance, regional dynamics, strategic initiatives, and future outlook.

Financial Performance - Total revenue for the year ended December 31, 2024, was HKD 3,811,864, a slight decrease of 0.6% compared to HKD 3,833,194 in 2023[3] - Gross profit increased to HKD 1,312,114, up 0.7% from HKD 1,303,061 in the previous year[3] - Net profit for the year was HKD 207,461, representing a decline of 37.6% from HKD 333,149 in 2023[3] - Basic earnings per share decreased to HKD 19.26, down from HKD 31.64 in the prior year, reflecting a 39% drop[4] - Total comprehensive income for the year was HKD 160,971, down 47.8% from HKD 307,809 in 2023[4] - Total revenue for the year ending December 31, 2024, is reported at HKD 3,811.864 million, a slight decrease from HKD 3,833.194 million in 2023, representing a decline of approximately 0.6%[16] - Revenue from sales of goods amounted to HKD 3,804.858 million for 2024, compared to HKD 3,826.566 million in 2023, indicating a decrease of about 0.6%[16] - Revenue recognized at a point in time was HKD 3,809.278 million for 2024, down from HKD 3,830.438 million in 2023, reflecting a decline of approximately 0.6%[16] - Total external revenue for 2024 was HKD 3,811,864, a slight decrease of 0.6% from HKD 3,833,194 in 2023[30] - Revenue from Hong Kong decreased to HKD 977,391 in 2024, down 20.5% from HKD 1,229,961 in 2023[30] - Revenue from mainland China was HKD 2,271,959, a decrease of 2.3% compared to HKD 2,325,737 in 2023[30] Assets and Liabilities - Non-current assets decreased to HKD 2,336,687 from HKD 2,179,577, indicating a growth of 7.2%[5] - Current assets decreased to HKD 2,419,909 from HKD 2,504,156, a decline of 3.4%[5] - Total equity attributable to owners decreased to HKD 3,620,162 from HKD 3,631,441, a slight decline of 0.3%[6] - As of December 31, 2024, the group's total assets amounted to HKD 4,756.6 million, an increase from HKD 4,683.7 million in 2023, while total equity decreased slightly to HKD 3,670.0 million from HKD 3,674.7 million[86] - The group's cash balance as of December 31, 2024, was HKD 1,402.5 million, up from HKD 1,365.6 million in 2023, with no external borrowings reported[87] Expenses and Costs - The company reported a significant increase in administrative expenses to HKD 313,065, up from HKD 298,049, reflecting a rise of 5%[3] - Total employee costs for 2024 amounted to HKD 754,197,000, an increase of 3.7% from HKD 727,360,000 in 2023[39] - Research and development expenses for 2024 were HKD 35,845,000, slightly down from HKD 36,202,000 in 2023[37] - The total depreciation expense for 2024 was HKD 186,297,000, compared to HKD 166,038,000 in 2023, reflecting an increase of 12.2%[37] Impairment and Losses - The company reported a net loss from property, plant, and equipment impairment of HKD 83,896 in 2024, compared to HKD 8,778 in 2023[32] - Total impairment losses amounted to HKD 135.9 million, including HKD 77.1 million related to property, plant, and equipment in complementary businesses in mainland China and Hong Kong[57] - The company recognized a significant impairment loss of HKD 77.1 million due to the recoverable amount of manufacturing assets related to eight production lines being substantially reduced[59] - The management identified impairment indicators for certain right-of-use assets and property, plant, and equipment with carrying amounts of HKD 38.7 million and HKD 18.1 million, respectively[62] Dividends - The company confirmed a dividend distribution of HKD 165,112,000 for the year, with a proposed final dividend of HKD 9.63 per share and a special dividend of HKD 6.19 per share[38] - The board proposed a final dividend of HKD 0.0963 per share and a special dividend of HKD 0.0619 per share, totaling HKD 0.1582 per share for the year ended December 31, 2024[106] Acquisitions and Expansion - The company completed acquisitions in South Korea and Australia during the year, aiming to leverage growth opportunities in these markets[51] - The company established a wholly-owned subsidiary in Taiwan at the end of 2023 to enhance local distribution and support sales growth[77] - The acquisition of 100% of Gaemi Food for 48,000 million KRW (approximately 271.7 million HKD) was completed on September 2, 2024, expanding the company's non-noodle business portfolio[78] - The company plans to acquire ABC Pastry for a total price of 33.7 million AUD (approximately 178.6 million HKD), expected to be completed by December 2, 2024[79] Market and Product Development - The company is focused on expanding its product offerings and enhancing its market presence in Hong Kong and mainland China[7] - The company continues to focus on high-end instant noodle products, with sales of cup noodles showing recovery due to expanded distribution channels in western and northern regions[83] - The distribution business in Hong Kong recorded growth, benefiting from the recovery of inbound tourism and various promotional activities[74] - The company expanded its non-noodle product offerings, including seasonal products and new flavors in its low-fat yogurt line, to enhance market penetration[75] Regulatory and Governance - The company has applied new Hong Kong Financial Reporting Standards effective from January 1, 2024, which did not have a significant impact on the financial position or performance for the current and prior years[11] - The company has not early adopted any new standards that have been issued but are not yet effective, indicating a cautious approach to regulatory changes[12] - The company's auditors have issued a report without reservations, confirming the integrity of the financial statements[9] - The audit committee, composed of three independent non-executive directors, is responsible for reviewing the group's financial reporting procedures, risk management, and internal controls[102] - The company has adhered to the corporate governance code, with the chairman also serving as the CEO, which the board believes allows for effective decision-making[100] Future Outlook - The company maintains a cautiously optimistic outlook for long-term business development across various regions, focusing on cost control and operational efficiency[93] - The company plans to continue expanding its product line and diversifying its offerings to enhance revenue streams, particularly in response to rising consumer health awareness[93] - The company aims to leverage its strong market position in Hong Kong and mainland China to expand into Taiwan, South Korea, and Australia, thereby broadening its revenue base[95]

Summary of Conference Call Company Overview - The company discussed is Nissin Foods, headquartered in Japan, with a history dating back several decades. It entered the Hong Kong market in 1984 and began expanding into China in the 1990s. The company was listed in Hong Kong in 2017 [2][3]. Industry Insights - The global demand for instant noodles is high, with Vietnam having the highest per capita consumption, followed by South Korea. China ranks tenth, indicating potential growth opportunities in the market [1]. - The company has a presence in several Asian markets, including Vietnam, South Korea, Taiwan, and China, with plans to enter Australia and New Zealand [2][3]. Key Acquisitions and Market Expansion - In September, the company acquired a frozen dumpling factory in Australia and announced plans to enter the Australian market in collaboration with its parent company [3][4]. - The acquisition of Gamey Food, a leading snack producer in South Korea, aims to leverage existing distribution channels to penetrate the local instant noodle market [4]. Sales and Revenue Trends - The company reported that its sales in Hong Kong and other Asian regions are recovering, with a slight growth observed in the third quarter of 2023. The revenue distribution is approximately 40% from Hong Kong and 60% from mainland China [8][9]. - The company has maintained a gross margin of around 35% over the past five years, despite fluctuations due to rising costs of raw materials [9][10]. Product Strategy - Nissin Foods focuses on high-end products, with a significant portion of its sales coming from premium instant noodles. The company aims to introduce new products, including spicy noodles and non-fried options, to cater to evolving consumer preferences [19][21]. - The company has noted a trend of consumers seeking value, leading to increased sales of larger packaging options [14]. Challenges and Market Conditions - The company faces challenges in the Hong Kong market due to population outflow and competition from cross-border shopping in Shenzhen. However, it has mitigated some impacts by increasing exports to markets like Canada and the UK [13][14]. - In mainland China, there is a noted trend of consumer downgrade, with a shift towards more affordable products [14]. Financial Performance and Future Outlook - The company aims for a stable dividend policy, targeting a payout ratio of around 50%. Management is optimistic about maintaining or increasing dividends in the future [10][29]. - The management expects to achieve a low single-digit growth in sales for the remainder of the year, with a more optimistic outlook for 2024, driven by new acquisitions and market expansion [17][28]. Sustainability Initiatives - The company has shifted to using paper cups instead of plastic and emphasizes food safety in its operations [11]. Conclusion - Nissin Foods is strategically positioned for growth in both domestic and international markets, with a focus on high-quality products and expansion into new regions. The management remains cautious yet optimistic about future performance amid current market challenges [30].

Financial Performance - For the nine months ended September 30, 2024, the company reported revenue of HKD 2,862,173, a decrease of 3.1% compared to HKD 2,955,978 for the same period in 2023[2] - Gross profit for the same period was HKD 997,437, down from HKD 1,005,835, reflecting a slight decline in profitability[2] - The company's net profit for the nine months was HKD 255,492, a decrease of 6.2% from HKD 272,272 in the previous year[2] - Basic and diluted earnings per share were HKD 24.07, down from HKD 25.90, indicating a decline of 7.1%[2] - The company did not recommend any dividend payment for the current period, maintaining a zero dividend for the nine months ended September 30, 2023[10] Assets and Liabilities - Total assets as of September 30, 2024, were HKD 3,890,887, an increase from HKD 3,787,548 as of December 31, 2023[4] - Non-current assets increased to HKD 2,333,756 from HKD 2,179,577, showing growth in long-term investments[3] - Current liabilities rose to HKD 918,425 from HKD 896,185, indicating a slight increase in short-term obligations[4] - The company’s cash and cash equivalents decreased to HKD 982,450 from HKD 1,199,054, reflecting a reduction in liquidity[3] - The company’s total equity increased to HKD 3,783,844 from HKD 3,674,703, indicating a strengthening of the financial position[4] Shareholder Information - The company’s controlling shareholder, Nissin Foods Holdings Co., Ltd., holds approximately 72.05% of the issued shares, reflecting strong ownership stability[1] Revenue Breakdown - Revenue from external customers in Hong Kong and other Asia was HKD 1,097.7 million, while revenue from mainland China was HKD 1,764.5 million for the nine months ended September 30, 2024[11] - The company's operating performance in Hong Kong and other Asia showed a revenue decrease of 3.9%, attributed to consumer spending shifts to the Greater Bay Area[11] - The mainland China business revenue decreased by 2.7% (a 1.5% decrease in local currency), due to weaker consumer sentiment and the depreciation of the RMB against the HKD[11] Acquisitions and Market Presence - The company acquired 100% of Gaemi Food Co., Ltd. on September 3, 2024, for KRW 48,000 million (approximately HKD 286.94 million)[15] - The integration of GAEMI FOOD as a subsidiary since September 2024 is expected to enhance the company's market presence[21] Auditor Review and Compliance - The company’s auditor has reviewed the unaudited consolidated financial information without any reservations[9] - The financial results were prepared in accordance with International Financial Reporting Standards, and comparisons with the group's financial performance should be made cautiously due to differing fiscal year ends[18] Performance in China Segment - Revenue from the China segment for the six months ending September 30, 2024, was ¥35,457 million, reflecting a 7.7% increase compared to the previous year[21] - Core operating profit for the China segment was ¥3,691 million, a 4.6% increase year-over-year[21] Sales Performance - For the three months ending September 30, 2024, net sales to third parties reached ¥18,999 million, a 5.1% increase from ¥18,076 million in the same period of 2023[20] - Total sales for the six months ending September 30, 2024, amounted to ¥37,128 million, up 7.4% from ¥34,545 million in the same period of 2023[20] - Operating income for the three months ending September 30, 2024, was ¥2,437 million, slightly up from ¥2,420 million in the same period of 2023[20] - The company reported a stable sales performance for its bagged noodles despite a decline in frozen food sales in Hong Kong due to changing consumer behavior[21] Risks and Future Outlook - The company emphasized the importance of considering significant risks and uncertainties that may impact future performance forecasts[22]

Economic Overview - For the first half of 2024, Nissin Foods reported an improvement in the global economic landscape, despite persistent challenges such as high interest rates and geopolitical risks [10]. - Economic growth in Mainland China picked up, driven by a significant increase in exports of high-tech manufacturing products, including electric vehicles and drones, from early 2024 [10]. - The Hong Kong economy recorded moderate growth during the reporting period, although local retail leakage continued to impact certain businesses [10]. - The overall socio-economic situation in Vietnam was positive, with a year-on-year GDP growth of 6.42% in the first half of 2024 [25]. Company Performance - Revenue decreased by 5.5% to HK$1,822.5 million in 2024 from HK$1,929.3 million in 2023, primarily due to weakened consumption sentiment and negative foreign currency translation effects [11]. - Gross profit declined by 3.2% to HK$637.5 million, while gross profit margin increased by 0.9 percentage points to 35.0% in 2024 from 34.1% in 2023 [11]. - Profit attributable to owners of the Company slightly decreased by 1.3% to HK$169.5 million, resulting in a net profit margin of 9.3% for the period [11]. - Adjusted EBITDA increased by 1.5% to HK$300.3 million, with an EBITDA margin of 16.5% for the period compared to 15.3% in 2023 [13]. - Total comprehensive income for the period was HK$156,966, an increase of 36.5% compared to HK$115,087 in the same period last year [86]. Product and Market Strategy - Nissin Foods remains committed to continuous product upgrades and cost optimization, supporting its premiumization and differentiation strategies [10]. - The company is focused on enhancing product quality and innovation capabilities to deliver greater taste experiences to consumers [10]. - Revenue from the non-noodle business is being diversified to enhance overall competitiveness and create synergies with the instant noodle segment [17]. - The instant noodle business in Hong Kong saw a slight revenue increase due to the recovery in sales volume of premium bag-type instant noodles [16]. - The instant noodle business in Mainland China maintained stability with improved sales of cup-type instant noodles, particularly CUP NOODLES BIG [32]. Geographic Expansion - Nissin Foods' strategies are supported by a solid foundation and footholds in Hong Kong and Mainland China [10]. - The company expanded its geographical presence in Mainland China by entering new cities and adding sales points in the western and northern regions [32]. - The company plans to expand its business into new markets such as Taiwan and Korea, leveraging its strong presence in Hong Kong and Mainland China [44]. - A wholly-owned subsidiary was established in Taiwan to enhance sales direction and promotional support, expected to drive sales growth [26]. Financial Position - As of June 30, 2024, the total assets of the Group amounted to HK$4,569.3 million, a decrease from HK$4,683.7 million as of December 31, 2023 [33]. - The Group's total equity was HK$3,666.1 million as of June 30, 2024, compared to HK$3,674.7 million as of December 31, 2023 [33]. - The Group's working capital increased to HK$1,619.5 million as of June 30, 2024, from HK$1,608.0 million as of December 31, 2023 [33]. - The current ratio improved to 3.0 as of June 30, 2024, up from 2.8 as of December 31, 2023 [33]. Shareholder Information - The company has decided not to declare any interim dividend for the six months ended June 30, 2024 [51]. - During the interim period, the trustee of the share award scheme purchased 380,000 shares at prices ranging from HK$4.92 to HK$4.98 per share, totaling approximately HK$1,882,500 [57]. - The share award scheme aims to recognize the contributions of selected employees and provide incentives for retention [71]. - The total number of awarded shares granted during the period was 391,700, with no shares cancelled or lapsed [73]. Risk Management and Compliance - The company established an audit committee to oversee financial reporting, risk management, and internal control systems, with the interim results for the six months ending June 30, 2024, reviewed by the committee and external auditors [59]. - The audit committee reviewed the interim report, ensuring compliance with applicable standards and the effectiveness of the audit process [59]. - The condensed consolidated financial statements for the six months ended June 30, 2024, were reviewed and found to be in compliance with HKAS 34 [84]. Environmental and Social Responsibility - Nissin Foods has implemented measures to reduce its environmental impact, such as installing solar panels in production facilities [10]. - The company aims to provide a stable food supply to protect consumers' well-being [10]. - The company emphasizes food safety by conducting regular product testing and pursuing relevant research and development [10].