Investment Rating - The investment rating for the company is "Buy" (maintained) [4] Core Views - The company reported a stable revenue performance with a 11.9% year-on-year increase in revenue to 2.927 billion yuan for the first half of 2024, while the net profit attributable to shareholders decreased by 13.8% to 308 million yuan [2][6] - The company is expected to improve profitability through mechanisms optimization, new product launches, and channel expansion [7] Financial Performance Summary - Revenue for 2024H1 reached 2.927 billion yuan, up 11.9% year-on-year, with net profit at 308 million yuan, down 13.8% [6] - The gross profit margin for 2024H1 was 29.98%, a slight increase of 0.54 percentage points year-on-year [7] - Sales expenses and management expenses for 2024H1 were 12.04% and 4.79% respectively, with year-on-year changes of +2.88 and -0.59 percentage points [7] Revenue and Profit Forecast - The company’s projected revenues for 2024, 2025, and 2026 are 6.881 billion, 7.709 billion, and 8.632 billion yuan respectively, with year-on-year growth rates of 11.93%, 12.04%, and 11.96% [7][8] - The net profit attributable to shareholders is forecasted to be 854 million, 979 million, and 1.168 billion yuan for 2024, 2025, and 2026, with growth rates of 0.13%, 14.65%, and 19.28% respectively [7][8] Market Position and Strategy - The company is focusing on enhancing its incentive mechanisms, accelerating new product development, and expanding its distribution channels, including exploring small B and e-commerce opportunities [7] - The company has seen stable growth in sales volume, with notable performance in various product categories, including hot pot condiments and Chinese compound seasonings [6][7]

Investment Rating - The report maintains a "Buy" rating for Yihai International, expecting a price increase of over 15% in the next 6-12 months [2][7]. Core Insights - In H1 2024, Yihai International achieved revenue of 2.927 billion CNY, a year-on-year increase of 11.9%, while net profit attributable to shareholders was 308 million CNY, a decrease of 13.8% [2]. - Revenue from related parties, third parties, and other restaurant clients was 989 million CNY, 1.867 billion CNY, and 67 million CNY, respectively, with year-on-year growth of 11.5%, 10.3%, and 100.7% [2]. - The company is focusing on optimizing product pricing and enhancing flavors to recover revenue growth, particularly in the instant food and Chinese seasoning product categories [2]. Financial Performance Summary - For H1 2024, the sales figures for hot pot base, Chinese seasoning, and instant food were 1.748 billion CNY, 454 million CNY, and 700 million CNY, with year-on-year growth rates of 5.6%, 24.4%, and 22.2% respectively [2]. - The overall gross margin and net margin for H1 2024 were 29.98% and 10.53%, reflecting a decline of 0.54 percentage points and 3.14 percentage points year-on-year [2]. - The report projects net profits for 2024, 2025, and 2026 to be 800 million CNY, 910 million CNY, and 1 billion CNY, respectively, with corresponding P/E ratios of 13x, 11x, and 10x [2].

Financial Performance - For the six months ended June 30, 2024, revenue was RMB 2,926.9 million, an increase of 11.9% compared to RMB 2,616.2 million for the same period in 2023[2] - Gross profit for the same period was RMB 877.5 million, up 9.9% from RMB 798.6 million in the prior year[2] - Operating profit decreased by 16.9% to RMB 414.0 million, down from RMB 498.4 million for the same period in 2023[2] - Net profit attributable to owners of the company was RMB 308.3 million, a decrease of 13.8% compared to RMB 357.8 million in the previous year[2] - Basic earnings per share for the period was RMB 31.78, down 13.1% from RMB 36.59 in the same period last year[2] - The company reported a total comprehensive income of RMB 321.3 million for the period, compared to RMB 376.9 million in the same period last year[5] - For the six months ended June 30, 2024, the group's revenue was RMB 2,926.9 million, an increase of 11.9% year-on-year, while net profit decreased by 11.4% to RMB 334.1 million[28] - The third-party sales revenue reached RMB 1,937.9 million, reflecting a year-on-year growth of 12.1%[30] - Net profit decreased by 11.4% from RMB 377.0 million for the six months ended June 30, 2023, to RMB 334.1 million for the same period in 2024, with basic earnings per share dropping from RMB 36.59 to RMB 31.78[51] Assets and Liabilities - Total assets as of June 30, 2024, were RMB 5,290.7 million, a decrease from RMB 6,054.4 million as of December 31, 2023[3] - Total liabilities decreased to RMB 706.5 million from RMB 965.0 million at the end of 2023[4] - Current assets totaled RMB 2,540.3 million, down from RMB 3,187.4 million at the end of 2023[3] - The company reported a net trade receivables amount of RMB 195,774,000 as of June 30, 2024, down from RMB 258,125,000 as of December 31, 2023[13] - Trade payables totaled RMB 281,034,000 as of June 30, 2024, compared to RMB 402,788,000 as of December 31, 2023, indicating a decrease in liabilities[17] - Cash and cash equivalents amounted to approximately RMB 1,864.6 million as of June 30, 2024, down from RMB 2,309.4 million as of December 31, 2023[52] - The debt-to-asset ratio was 13.4% as of June 30, 2024, compared to 15.9% as of December 31, 2023, with no bank borrowings reported[53] - Inventory as of June 30, 2024, was approximately RMB 342.2 million, down from RMB 370.5 million as of December 31, 2023, with inventory turnover days decreasing from 32.9 days to 31.3 days[54] - Trade receivables were approximately RMB 195.8 million as of June 30, 2024, down from RMB 258.1 million as of December 31, 2023, with turnover days increasing from 12.3 days to 14.0 days[55] Revenue Breakdown - Sales of hot pot seasoning to related parties amounted to RMB 887,273,000, while sales to third parties were RMB 860,246,000, contributing to a subtotal of RMB 1,747,519,000[11] - The revenue from compound seasoning reached RMB 454,411,000, with related party sales at RMB 24,232,000 and third-party sales at RMB 430,179,000[11] - The main product categories include hot pot seasoning (RMB 1,747.5 million, 59.7% of total revenue), compound seasoning (RMB 454.4 million, 15.5%), and convenient fast food (RMB 700.5 million, 23.9%) for the six months ended June 30, 2024[33] - Revenue from hot pot seasoning products increased by 5.6% from RMB 1,654.2 million in the six months ended June 30, 2023, to RMB 1,747.5 million in the same period of 2024, accounting for 59.7% of total revenue[35] - Compound seasoning revenue rose by 24.4% from RMB 365.3 million in the six months ended June 30, 2023, to RMB 454.4 million in the same period of 2024, representing 15.5% of total revenue[36] - Revenue from convenient fast food products increased by 22.2% from RMB 573.0 million in the six months ended June 30, 2023, to RMB 700.5 million in the same period of 2024, accounting for 23.9% of total revenue[38] Expenses and Costs - The cost of goods sold for the six months ended June 30, 2024, was RMB 2,541,885,000, an increase of 15.6% from RMB 2,198,231,000 in the same period of 2023[18] - Employee benefits expenses rose to RMB 311,661,000 for the six months ended June 30, 2024, compared to RMB 247,028,000 in the previous year[18] - Distribution expenses increased by 46.9% from RMB 239.8 million to RMB 352.3 million, representing 12.0% of total revenue[45] - Administrative expenses decreased by 0.4% from RMB 140.8 million to RMB 140.2 million, accounting for 4.8% of total revenue[46] - Other income and net gains decreased by 63.9% from RMB 80.4 million for the six months ended June 30, 2023, to RMB 29.0 million for the same period in 2024, primarily due to increased foreign exchange losses and a decline in government subsidies[47] - Profit before income tax decreased by 12.8% from RMB 526.9 million for the six months ended June 30, 2023, to RMB 459.6 million for the same period in 2024, primarily due to increased distribution expenses[49] Strategic Initiatives - The company plans to focus on product R&D, overseas expansion, brand promotion, and channel development in the second half of 2024, aiming to enhance product innovation and market insight[59] - The company aims to strengthen its overseas market presence by exploring local culinary cultures and expanding its product offerings to meet diverse consumer tastes, particularly targeting the halal and Middle Eastern markets[59] - The company will continue to implement a multi-brand strategy, enhancing consumer engagement through innovative marketing strategies and data analysis systems[60] - The company is focusing on enhancing channel management and expanding B-end and overseas markets to drive its multi-brand strategy[26] - The group continues to enhance its data analysis platform to improve channel management efficiency and support strategic development[30] - The company has established nine flagship stores on major e-commerce platforms such as Tmall, JD.com, and Pinduoduo[30] Corporate Governance and Compliance - The audit committee has reviewed the interim financial results for the six months ended June 30, 2024, confirming compliance with relevant accounting standards[66] - The interim financial results have been reviewed by external auditors, confirming no significant issues found[67] - The company has adopted good corporate governance principles and has complied with the corporate governance code during the reporting period[65] - There were no significant events to disclose after the reporting period[64] Dividends and Shareholder Information - The board has declared an interim dividend of RMB 0.2825 per share, totaling approximately RMB 292,867,750, to be paid in HKD at a rate of HKD 0.3088 per share[62] - The company will suspend share transfer registration from September 11 to September 16, 2024, to determine shareholders' rights to receive the interim dividend[63]

证券研究报告 港股公司|公司深度|颐海国际（01579） 激励优化，期待改善 请务必阅读报告末页的重要声明 glzqdatemark1 2024年08月12日 证券研究报告 |报告要点 餐饮连锁化率提升、门店降本诉求增强，家庭结构变化以及懒人经济发展，我们看好复合调味 品行业远期成长空间，虽短期增速换挡，深蹲蓄势、而后有望乘势而上。颐海国际作为国内复 合调味品龙头企业，2024 年以来激励机制进一步优化，由存量激励转为增量激励，或进一步 激发合伙人的积极性，同时新品研发加速、渠道布局完善，有望驱动经营端上行。站在颐海新 一轮激励优化的起点，本文详细回溯了历年变革的背景、具体举措及最终成效。良性的激励机 制有望驱动公司经营端上行，剖析本轮变革的亮点，展望新一轮成长周期。 |分析师及联系人 刘景瑜 邓洁 SAC：S0590524030005 SAC：S0590524040002 请务必阅读报告末页的重要声明 1 / 25 港股公司|公司深度 glzqdatemark2 2024年08月12日 颐海国际(01579) 激励优化，期待改善 | --- | --- | |------------|----------- ...

Investment Rating - The report assigns an "Outperform" rating to the company with a target price of HKD 15.00, indicating expected performance above the industry average [2][7][19]. Core Insights - The company is projected to achieve a revenue growth of approximately 10% in 1H24, despite a forecasted decline in profit due to non-operational factors such as government subsidies and foreign exchange losses [5][6]. - The company is a leading producer of compound seasonings in China, holding a market share of about 30% in the mid-to-high-end hot pot base market as of 2023 [10]. - The company is expected to maintain double-digit revenue growth in the second half of the year, driven by new product launches and expansion into overseas markets [6][7]. Financial Summary - Revenue is forecasted to grow from CNY 6,148 million in 2023 to CNY 6,759 million in 2024, representing a growth rate of 10% [4][10]. - Net profit attributable to the parent company is expected to increase from CNY 853 million in 2023 to CNY 870 million in 2024, with a growth rate of 2% [4][10]. - The company’s earnings per share (EPS) is projected to rise from CNY 0.82 in 2023 to CNY 0.84 in 2024 [4][10]. - The price-to-earnings (P/E) ratio is expected to decrease from 13.3 in 2023 to 12.9 in 2024, indicating a more attractive valuation [4][10]. - The dividend yield is projected to increase from 6.8% in 2023 to 7.0% in 2024, enhancing the attractiveness of the stock [4][10].

Company and Industry Overview * **Company**: Yihai International * **Industry**: Food and Beverage, particularly in the field of instant noodles, seasoning, and vegetarian products. Key Points and Arguments 1. **Second Quarter Performance**: * **Growth Rate Slowdown**: The company experienced a slowdown in growth rate in the second quarter compared to the first quarter, attributed to changes in product structure and seasonal factors. * **Product Structure**: The main products in the second quarter were small lobsters and hotpot bases, which accounted for a relatively small proportion of the product structure. * **Seasonal Factors**: The hot weather in the second quarter negatively impacted the sales of hotpot bases. * **Overall Performance**: Despite the slowdown, the company's overall performance remained stable. 2. **Product Categories**: * **High Growth**: Seasoned sauce and hotpot bases experienced the highest growth rates, followed by vegetarian products and instant noodles. * **Low Price Range Products**: The company introduced low-price range products in the vegetarian category, which are gradually gaining consumer acceptance. 3. **Sales and Marketing**: * **Salesperson Incentives**: The company adjusted the incentives for sales personnel, leading to increased motivation and active interaction with channels and terminals. * **Online Channel**: The company's online channel experienced significant growth, driven by targeted marketing strategies and product promotions. 4. **Raw Material Prices**: * **Stable Prices**: Raw material prices remained relatively stable, with slight upward trends expected in the second half of the year. 5. **Gross Margin**: * **Flat**: The gross margin is expected to remain flat compared to last year, due to stable raw material prices and slight declines in the gross margin of affiliated parties. 6. **Capital Expenditure and Dividends**: * **Reduced Capital Expenditure**: The company plans to reduce capital expenditure this year, with a focus on maintaining a high dividend payout ratio. 7. **New Product Development**: * **Focus on Young Consumers**: The company's new product development is driven by the preferences of young consumers, with a focus on innovative flavors and packaging. 8. **Brand Positioning**: * **Kuaishou Xiaochu**: The company's brand positioning for Kuaishou Xiaochu is still evolving, with a focus on promoting the brand through collaboration with other brands. 9. **Profit Outlook**: * **Profit Growth**: The company expects double-digit growth in third-party revenue for the full year, driven by strong performance in the second half of the year. Additional Important Points * The company's overseas factory in Thailand has entered full production, with production capacity expected to increase gradually. * The company plans to continue expanding its online channel and exploring new growth opportunities in the vegetarian category.

Financial Data and Key Metrics Changes - The company experienced a significant decline in revenue and profit from 2020 to 2022, attributed to multiple factors including macroeconomic conditions and increased competition in the seasoning market [5][6] - The net profit for 2024 is projected to correspond to a PE valuation of 15 times, with a dividend yield close to 6% [1] - The estimated reasonable value for the stock in 2024 is set at HKD 18, based on a PE valuation of 18 times [1][32] Business Line Data and Key Metrics Changes - The product structure consists of 67% hot pot base, 23% convenient fast food, and 10% seasoning, with hot pot base showing a compound growth rate of around 10% [8][9] - The fast food segment saw a year-on-year decline of 26% in growth during 2022-2023 [8] - Third-party revenue surpassed related party revenue for the first time in 2018, but the proportion has since decreased due to slowing growth in the fast food category [10][11] Market Data and Key Metrics Changes - The hot pot base market was valued at approximately RMB 400 billion in 2022, with an industry growth rate exceeding 10% [13] - The seasoning market is estimated to be around RMB 600 billion, with a fragmented competitive landscape [12][13] - The overseas market currently accounts for about 6% of total revenue, with growth rates surpassing the overall company growth [11] Company Strategy and Development Direction - The company is focusing on multi-category and multi-brand strategies, with an emphasis on enhancing product quality and price competitiveness [4][15] - The management is implementing a dual-channel strategy (B2B and B2C) to drive growth, particularly in the small B market [15][24] - The company aims to leverage its strong brand presence to penetrate the C-end market effectively [14][15] Management Comments on Operating Environment and Future Outlook - Management believes the worst phase of the supply-demand imbalance has passed, with expectations for a recovery in growth across various product categories [5][19] - The company anticipates a compound annual growth rate of around 19% for related party business over the next three years [20] - Management acknowledges the need for organizational adjustments to enhance market responsiveness and sales team motivation [25][26] Other Important Information - The company has a concentrated ownership structure, with significant stakes held by the founding couples, which aligns their interests with the company's performance [7] - The dividend payout ratio has increased significantly, reaching approximately 93% for both the company and its related parties [7][8] - The company is undergoing a transformation to improve its operational efficiency and market competitiveness [19][25] Q&A Session Summary Question: What is the outlook for the company's growth in the next few years? - The company expects a compound annual growth rate of around 19% for related party business over the next three years, with a focus on enhancing product quality and market penetration [20] Question: How is the company addressing the challenges in the fast food segment? - The company is adjusting its product pricing strategy to enhance competitiveness and is exploring new product lines to stimulate growth [18][19] Question: What are the key areas of focus for the company's future strategy? - The company is focusing on expanding its B2B channels, improving sales team motivation, and enhancing product responsiveness to market demands [24][25]

Summary of Conference Call Company/Industry Involved - The conference call is organized by GF Securities, focusing on the recent deep report regarding the recovery and reform of the international shipping industry, specifically highlighting the company "Hai International" [1] Core Points and Arguments - The report discusses how Hai International is emerging from a low point in its performance, indicating a potential turnaround in its business operations [1] - Emphasis is placed on the reforms being implemented within the company, which are expected to drive future growth and improve operational efficiency [1] Other Important but Possibly Overlooked Content - The call is part of a series of investor engagement activities, suggesting a proactive approach by GF Securities to keep investors informed about market developments and company performance [1]

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 18.00, compared to the current price of HKD 14.10 [1] Core Views - The company is poised for a turnaround after a period of underperformance, with industry competition becoming more rational and its leading position solidified [1] - The company and its affiliate, Haidilao, significantly increased their dividend payout ratio to 90% in 2023, supported by ample capacity, low capital expenditure, and strong cash flow [1] - The compound seasoning market remains a high-growth sector, with both hotpot seasoning and Chinese-style compound seasoning in the growth and penetration phase [2] - The ready-to-eat food market, particularly self-heating products, has slowed down after rapid growth, but opportunities exist in new product categories and channels [2] - The company is expected to benefit from affiliate growth, product quality-to-price ratio improvements, incentive model reforms, and multi-channel expansion in 2024 [2] Company Overview - The company has experienced significant growth phases, including a 15x stock price increase from 2016 to 2019, followed by a period of underperformance from 2020 to 2022 [1][11][12] - In 2023, the company's hotpot seasoning and Chinese-style compound seasoning categories resumed growth, while ready-to-eat food remained a drag due to high base effects [12] - The company's product structure is dominated by hotpot seasoning (67% of total revenue), followed by ready-to-eat food (23%) and compound seasoning (10%) [20] - The company's channel structure is shifting towards third-party sales, which accounted for 67% of total revenue in 2023, up from 44% in 2013 [22] - The company has a balanced regional presence, with 50% of revenue from South China, 44% from North China, and 6% from overseas markets [24] Industry Analysis - The compound seasoning market in China is expected to reach RMB 203.2 billion in 2023, accounting for 34% of the total seasoning market [27] - The compound seasoning market is still in the growth phase, with hotpot seasoning and Chinese-style compound seasoning being the key growth drivers [27] - The ready-to-eat food market in China exceeded RMB 200 billion in 2022, with instant noodles being the dominant category, while self-heating products have entered a slowdown phase [43] - The food processing and catering industries are the main consumption scenarios for compound seasoning, with catering being the core driver of short-term growth [29][32] Future Outlook - The company is expected to benefit from Haidilao's store expansion and overseas growth, with a projected 10% CAGR in affiliate hotpot seasoning revenue over the next three years [53] - The company plans to focus on B2B and online channels for third-party sales, with Chinese-style compound seasoning and hotpot seasoning being the key growth drivers [58] - The company is undergoing organizational reforms, including changes to its product project system and channel incentive policies, to improve responsiveness and stimulate growth [60][62] - The company's profitability is expected to remain stable, with a focus on revenue growth and capacity utilization [63]

Investment Rating - The report initiates coverage with an "Outperform" rating for Yihai International [5][8]. Core Views - Yihai International, rooted in Haidilao, is a leading player in the compound seasoning market, focusing on Chinese compound and convenient food products to drive new growth [3][4]. - The company is enhancing its product matrix and expanding its sales network while reducing reliance on related parties [3][4]. - The third-party revenue share has steadily increased, surpassing related party revenue since 2018, with a CAGR of 22.4% for third-party revenue from 2018 to 2023 [4][6]. - The company has planned capacity expansions both domestically and internationally to support long-term business growth [13][15]. Summary by Sections Company Overview - Yihai International originated as a supplier of hot pot base products for Haidilao and became independent in 2013, listing on the Hong Kong Stock Exchange in 2016 [5][6]. - The company has successfully reduced its dependence on Haidilao, with related party revenue dropping from 78.7% in 2017 to below 50% in 2023 [5][6]. Product Development - The company has optimized its product development organization, with 21 product teams led by 7 innovation committee members focusing on domestic and international markets [3][33]. - As of the end of 2023, Yihai launched 24 new hot pot seasoning products, 37 new Chinese compound seasoning products, and 40 new convenient food products [33][34]. Revenue and Profitability - The company expects revenues of 6.88 billion, 7.50 billion, and 8.07 billion RMB for 2024, 2025, and 2026, respectively, with net profits of 980 million, 1.11 billion, and 1.23 billion RMB [4][5]. - The gross margin improved to 31.6% in 2023, up 1.4 percentage points from the previous year, following a decline in raw material costs [18][19]. Market Trends - The compound seasoning market in China is growing rapidly, with a market size of 178.6 billion RMB in 2022, reflecting a 12.5% year-on-year growth [22][23]. - The penetration rate of compound seasonings in China is still low at 26%, indicating significant growth potential compared to more mature markets like Japan and South Korea [23][24]. Strategic Initiatives - The company is enhancing its sales efficiency through various management mechanisms, including a sales partner system and regional management strategies [9][10]. - Yihai is focusing on the B-end market, particularly with small and medium-sized restaurant chains, which are expanding rapidly [28][38].