Core Insights - The company reported a net profit attributable to shareholders of approximately RMB 739 million for 2024, a decrease of 13.28% year-on-year [1] - Revenue reached approximately RMB 6.54 billion, reflecting a year-on-year increase of 6.4% [1] - Gross profit was around RMB 2.046 billion, which is a 5.4% increase compared to the previous year [1] Revenue Breakdown - The group achieved revenue of RMB 4.566 billion from third-party businesses, marking a year-on-year growth of 10.4%, driven by refined channel management and improved product development mechanisms [1] - In the hot pot base category, the beef tallow hot pot base generated RMB 584 million in revenue, up 12.1%, while the tomato hot pot base reached RMB 424.3 million, increasing by 8.6% [2] - The compound seasoning category saw the crawfish seasoning perform exceptionally well, with revenue of RMB 222.8 million, a growth of 31.5% [2] - Instant food products, particularly the spicy sour noodles, were popular among consumers, generating RMB 135.6 million in revenue, a significant increase of 56.7% [2] Channel Management - The company emphasizes refined and standardized management strategies in channel construction, adapting to market changes through in-depth market research and regional layout [3] - E-commerce channels achieved revenue of RMB 398.7 million, reflecting a year-on-year growth of 30.9% [3] - The company implements differentiated management based on channel and regional characteristics, optimizing the "partner" assessment system with an incentive mechanism focused on "incremental" growth [3]

Financial Performance - Revenue for 2024 reached RMB 6,539.6 million, an increase of 6.4% compared to RMB 6,147.6 million in 2023[6] - Gross profit for 2024 was RMB 2,045.8 million, up 5.4% from RMB 1,941.3 million in 2023[6] - Net profit for 2024 decreased by 11.9% to RMB 799.5 million, down from RMB 907.0 million in 2023[6] - Total comprehensive income for 2024 was RMB 804.6 million, with the portion attributable to owners of the company at RMB 744.5 million, a decrease of 12.7% from RMB 853.0 million in 2023[6] - Basic and diluted earnings per share for 2024 were RMB 0.762[6] - Total expenses for the year ended December 31, 2024, amounted to RMB 5,541,986 thousand, up from RMB 5,071,127 thousand in 2023, reflecting an increase of 9.3%[33] - Income tax expense for 2024 was RMB 378,636 thousand, compared to RMB 357,089 thousand in 2023, marking an increase of 6.0%[36] - Basic earnings per share decreased to 76.2 cents in 2024 from 87.5 cents in 2023, a decline of 12.6%[44] - The company reported a total of RMB 110,760 thousand in other income and gains for 2024, down from RMB 118,375 thousand in 2023, a decrease of 6.8%[34] - Employee benefits expenses rose to RMB 673,481 thousand in 2024, compared to RMB 581,512 thousand in 2023, an increase of 15.8%[33] - The company recorded a government subsidy of RMB 88,103 thousand in 2024, slightly down from RMB 88,929 thousand in 2023, a decrease of 0.9%[34] Assets and Liabilities - Non-current assets totaled RMB 2,820.4 million in 2024, a slight decrease from RMB 2,867.0 million in 2023[7] - Current assets decreased to RMB 2,978.9 million in 2024 from RMB 3,187.4 million in 2023[7] - Total liabilities increased to RMB 1,066.1 million in 2024 from RMB 965.0 million in 2023[8] - The company reported a decrease in retained earnings to RMB 4,242.9 million in 2024 from RMB 4,500.1 million in 2023[7] - The company’s total assets as of December 31, 2024, were RMB 166,007,000, down from RMB 181,587,000 in 2023, reflecting a decrease of about 8.6%[27] - Cash and cash equivalents as of December 31, 2024, were approximately RMB 1,881.9 million, down from RMB 2,309.4 million in 2023[86] - The debt-to-asset ratio increased to 18.4% from 15.9% in 2023, with no bank borrowings reported[87] - As of December 31, 2024, the company's debt-to-equity ratio is 2.0%, up from 1.7% in 2023[96] Revenue Breakdown - Revenue from hot pot seasoning for related parties was RMB 1,753,229,000 in 2024, down from RMB 1,899,247,000 in 2023, a decrease of about 7.7%[25] - Revenue from compound seasoning for third parties increased to RMB 721,307,000 in 2024 from RMB 592,591,000 in 2023, reflecting a growth of approximately 21.7%[25] - Revenue from third-party business increased by 10.4% year-on-year to RMB 4,565.7 million, driven by refined channel management and improved product development mechanisms[50] - The company achieved significant growth in specific product categories, with revenue from beef hotpot base rising by 12.1% to RMB 584.0 million and spicy sour noodles increasing by 56.7% to RMB 135.6 million[50] - Revenue from hot pot seasoning products decreased slightly by 0.2% to RMB 4,085.4 million, accounting for 62.5% of total revenue in 2024[67] - Revenue from compound seasoning products increased by 26.6% to RMB 786.6 million, representing 12.0% of total revenue in 2024[69] - Revenue from convenient food products rose by 15.7% to RMB 1,604.7 million, making up 24.5% of total revenue in 2024[71] - Revenue from related party customers decreased by 1.8% to RMB 1,973.9 million, while revenue from distributors increased by 6.4% to RMB 3,983.4 million[73] Operational Insights - The company is engaged in the production and sale of hot pot condiments, compound seasonings, and instant food products in China and several overseas markets[14] - The company emphasizes supply chain optimization and aims to enhance production efficiency and product quality through technological innovation[51] - The company is expanding its market presence by exploring emerging channels while consolidating traditional ones, aiming to increase market penetration and customer satisfaction[55] - The company is committed to improving its smart manufacturing capabilities and increasing the proportion of self-produced products to enhance global supply chain stability[51] - The company is actively exploring the halal and Middle Eastern markets to enhance product acceptance and coverage[59] - The company plans to focus on product R&D, overseas expansion, and channel development as key strategies for 2025[102] - The company aims to enhance product competitiveness by tailoring offerings to meet diverse regional and channel needs[102] - The company will explore overseas markets by understanding local taste preferences and expanding its presence in mainstream supermarkets and B-end markets[103] - The company intends to improve operational efficiency through channel segmentation and standardized management[104] Dividends and Shareholder Information - For the fiscal year 2024, the company declared an interim dividend of RMB 0.2825 per share, totaling RMB 273.5 million, compared to no dividend in 2023[48] - The proposed final dividend for 2024 is RMB 0.395 per share, with a total of RMB 383.2 million, down from RMB 719.2 million in 2023, which was RMB 0.74 per share[48] - The board proposed a final dividend of HKD 0.4283 per share for the year ending December 31, 2024, subject to shareholder approval on May 22, 2025[117] - The final dividend is equivalent to RMB 0.3950 per share, based on the average exchange rate prior to the board meeting on March 25, 2025[117] - The company will suspend share transfer registration from May 19 to May 22, 2025, to determine shareholder eligibility for the annual general meeting[118] - A second suspension of share transfer registration will occur from May 28 to May 29, 2025, to determine eligibility for the final dividend[119] - The annual report for the year ending December 31, 2024, will include all information required by listing rules and will be sent to shareholders upon request[121] - The company expressed gratitude to shareholders, management, employees, business partners, and customers for their support and contributions[122]

Group 1 - The compound seasoning industry is expected to reach a revenue of 134.1 billion CNY in 2024, with a compound annual growth rate (CAGR) of 11% from 2019 to 2024 [16][21][29] - The hot pot base market is projected to maintain a growth rate of over 5% in the next five years, with a market size of approximately 600 billion CNY [33][35] - The Chinese compound seasoning sector is still in its growth phase, with significant opportunities for new product development, particularly in categories like sauerkraut fish and crayfish seasoning [41][43] Group 2 - In February, the food and beverage sector outperformed the market by 2.2 percentage points, with sub-sectors like liquor showing strong performance [12][20] - The valuation of the food and beverage sector is at historical lows, with the price-to-earnings (PE) ratio at the 12th percentile and the price-to-book (PB) ratio at the 23rd percentile since 2010 [12][24] - The net inflow of southbound funds in February reached 152.8 billion HKD, indicating strong interest in stocks like Qingdao Beer and COFCO Joycome [12][14] Group 3 - The liquor market is experiencing a recovery, with companies controlling inventory and maintaining prices, as seen with the price of Moutai at 2,210 CNY per bottle [17][32] - The sales of consumer goods improved in February, particularly in beer, dairy products, and frozen foods, while raw material prices showed mixed trends [18][19] - The overall retail sales in January and February 2025 are expected to grow by 4.0% year-on-year, indicating a positive trend in consumer spending [28][31] Group 4 - Investment recommendations include key players in the liquor sector such as Luzhou Laojiao, Jinshiyuan, and Shanxi Fenjiu, as well as consumer goods companies like Yanjing Beer and Tianwei Foods [10][12] - The report emphasizes the potential for new product launches in the compound seasoning market, driven by changing consumer preferences and the expansion of retail channels like Sam's Club [41][43] - The macroeconomic environment is improving, which is expected to boost consumer confidence and spending, further supporting the growth of the food and beverage sector [29][31]

Investment Rating - The report assigns an "Outperform" rating to the company, with a target price range of 16.71 to 17.69 HKD, indicating a potential upside of 9% to 20% from the current price of 14.56 HKD [6]. Core Insights - Yihai International is a leading player in the compound seasoning market in China, originating from the supply chain of Haidilao and has shown rapid revenue growth with a compound annual growth rate (CAGR) of 50% from 2015 to 2019 [1][4]. - The company achieved a revenue of 6.148 billion CNY in 2023, with a slight year-on-year growth of 0.01%, and a net profit of 853 million CNY, reflecting a 14.92% increase [1][19]. - The compound seasoning market in China is still in a growth phase, with a penetration rate of approximately 26% and a per capita consumption of about 9 USD, which is lower compared to countries like the US and Japan [2][44]. Company Overview - Yihai International specializes in hot pot base, Chinese compound seasonings, and convenience foods, with a sales network covering most regions in China and expanding into Southeast Asia, North America, and Europe [14]. - The company has undergone several phases of development, starting from supplying Haidilao to establishing its own brand and expanding its product lines [14]. - The company has reduced its reliance on related parties, with third-party customer revenue increasing significantly, accounting for 67.3% of total revenue in 2023 [28][54]. Industry Analysis - The compound seasoning industry is experiencing robust growth, driven by the increasing complexity of flavor profiles and the demand for convenience in cooking [38][39]. - The market for compound seasonings is projected to grow, with the industry size reaching approximately 203.2 billion CNY in 2023, reflecting a CAGR of about 14% from 2011 to 2023 [41][42]. - The B-end market is expected to grow through chain operations, cost reduction, and scene expansion, while the C-end focuses on meeting convenience needs [48][49]. Financial Forecast and Valuation - Revenue forecasts for 2024, 2025, and 2026 are projected at 6.63 billion CNY, 7.26 billion CNY, and 7.91 billion CNY, respectively, with year-on-year growth rates of 7.8%, 9.5%, and 9.0% [5][4]. - The net profit for the same years is expected to be 779 million CNY, 889 million CNY, and 998 million CNY, with corresponding year-on-year changes of -8.6%, 14.1%, and 12.3% [5][4]. - The company's earnings per share (EPS) are projected to be 0.75 CNY, 0.86 CNY, and 0.96 CNY for 2024, 2025, and 2026, respectively [5][4].

Summary of Conference Call Notes Company and Industry Overview - The conference call discusses a company in the food industry, specifically focusing on the hot pot and condiment segments, including products like hot pot base and sauces. Key Points and Arguments 1. **Growth Expectations**: The company anticipates double-digit growth in the third-party segment for the upcoming year, aligning with previous expectations and product performance indicators [1][2][3]. 2. **International Expansion**: The company plans to enhance its overseas operations, expecting faster growth in international markets compared to domestic ones, as regulatory processes are expected to be completed soon [2][3]. 3. **Product Development**: The company is focusing on various product categories, including hot pot bases and vegetarian options, with an emphasis on continuous innovation to meet consumer preferences [3][4]. 4. **Market Trends**: There is a noted shift in consumer preferences towards healthier options, with the company introducing new products that cater to this trend, such as low-fat and clean-label items [7][8]. 5. **Sales Performance**: The company reported a nearly 30% growth in its sauce segment, indicating strong consumer demand and brand recognition across different regions [10][11]. 6. **Competitive Landscape**: The company is adapting to competitive pressures, with competitors also shifting their product offerings. The company is focusing on maintaining its unique flavor profiles while expanding its product range [5][6]. 7. **Pricing Strategy**: The company has adjusted its pricing strategy to remain competitive, with a focus on maintaining reasonable price points for consumers while ensuring profitability [27][28]. 8. **Consumer Feedback**: The company emphasizes the importance of consumer feedback in product development, particularly for new launches, which are expected to gain traction in their second year [16][17]. 9. **Supply Chain Management**: The company has improved its supply chain capabilities, which has allowed for better pricing and product availability, contributing to overall growth [13][14]. 10. **Future Outlook**: The company is optimistic about maintaining growth momentum, with expectations for continued expansion in both domestic and international markets, driven by new product introductions and enhanced marketing strategies [24][25]. Other Important but Possibly Overlooked Content 1. **Regional Preferences**: The company acknowledges the differences in taste preferences between northern and southern regions of China, which influences product development and marketing strategies [12][14]. 2. **Consumer Education**: There is a need for consumer education regarding new products, especially when introducing innovative flavors or health-oriented options [22][23]. 3. **Market Dynamics**: The company is aware of the fluctuating market dynamics and is prepared to adjust its strategies accordingly, particularly in response to raw material cost changes [30][31]. 4. **Investment in Marketing**: The company plans to increase its marketing investments to enhance brand visibility and consumer engagement, particularly in online channels [29][32]. This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting the company's growth prospects and market strategies in the food industry.

Investment Rating - The report assigns an "Accumulate" rating to Yihai International [5] Core Viewpoints - Yihai International has successfully reduced its reliance on related party revenue, with third-party revenue accounting for 66% in H1 2024, indicating a shift towards independent growth [1][29] - The company is expanding its product lines, leveraging the Haidilao brand for hot pot base and developing sub-brands for diversified offerings, achieving a CAGR of 20% for hot pot seasonings and 68% for convenience foods from 2017 to 2023 [2][20] - Organizational reforms and market penetration strategies are enhancing operational efficiency and driving overseas market growth, with a CAGR of 37.4% in overseas business from 2017 to 2023 [3] Summary by Sections 1. Traditional Hot Pot Seasoning Leader, Expanding into Compound and Convenience Foods - Yihai International, established in 2005, is the largest supplier of mid-to-high-end hot pot seasonings in China, originally a supplier for Haidilao [12] - The company has diversified its product offerings, with hot pot seasonings, compound seasonings, and convenience foods contributing to stable revenue growth [20] - The revenue structure is stabilizing, with hot pot seasonings, compound seasonings, and convenience foods accounting for 67%, 10%, and 23% of total revenue in 2023, respectively [20] 2. Low Barriers and Intensifying Competition in the Market - The hot pot seasoning market is experiencing a compound annual growth rate (CAGR) of 12% from 2019 to 2023, driven by the popularity of hot pot dining [35] - The market is characterized by low technical barriers and intense competition, leading to a long-tail distribution of brands and significant product homogeneity [35] 3. Yihai's Advantages: Leveraging Haidilao Brand and Operational Efficiency - The company benefits from a concentrated shareholding structure, with key stakeholders having extensive experience in the food industry, enhancing management stability [30][32] - Yihai International is utilizing the operational expertise gained from Haidilao to improve its own management and operational efficiency [32] 4. Profit Forecast and Valuation - The projected revenue for Yihai International for 2024, 2025, and 2026 is estimated at 67.79 billion, 76.63 billion, and 85.65 billion RMB, respectively, with corresponding net profits of 8.25 billion, 9.64 billion, and 10.89 billion RMB [4]

Financial Performance - Yihai International Holding Ltd. reported a revenue of HK$1.2 billion for the first half of 2024, representing a 15% increase compared to the same period last year[2]. - The company achieved a net profit of HK$300 million, which is a 20% increase year-over-year[2]. - Revenue for the first half of 2024 reached RMB 2,926,925, an increase of 11.9% compared to RMB 2,616,226 in the same period of 2023[11]. - Gross profit for the period was RMB 877,508, reflecting a 9.9% increase from RMB 798,589 in the previous year[12]. - Operating profit decreased by 16.9% to RMB 414,006, down from RMB 498,429 in the first half of 2023[12]. - Profit for the period was RMB 334,143, a decline of 11.4% compared to RMB 376,960 in the same period last year[12]. - Basic earnings per share attributable to equity holders decreased by 13.1% to 31.78 RMB cents from 36.59 RMB cents[14]. - Total revenue for the six months ended June 30, 2024, was RMB 2,926.9 million, compared to RMB 2,616.2 million in the same period of 2023, reflecting a significant growth[34]. - The Group's net profit decreased by 11.4% from RMB377.0 million for the six months ended 30 June 2023 to RMB334.1 million for the corresponding period in 2024[59]. Market Expansion and Strategy - The company is expanding its market presence in Southeast Asia, targeting a 15% market share by 2025[2]. - The company aims to expand its presence in both business-end and overseas markets while promoting a multi-brand approach[17]. - The Group's strategy includes enhancing product acceptance in overseas markets by aligning with local taste trends and consumption habits[30]. - The Group will continue to implement a multi-brand strategy to enhance consumer interaction and brand awareness[78]. - The Group plans to explore culinary cultures in foreign markets to better align products with local preferences[75]. Product Development and Sales - New product launches contributed to a 30% increase in sales volume in the hot pot segment[2]. - The Group launched over 50 new products in the first half of 2024, including zero-additives series and various convenient ready-to-eat food options[31]. - Revenue from hot pot condiments rose by 5.6% to RMB1,747.5 million, accounting for 59.7% of total revenue in the same period[39]. - Revenue from compound condiments increased by 24.4% to RMB454.4 million, representing 15.5% of total revenue[41]. - Revenue from convenient ready-to-eat food products grew by 22.2% to RMB700.5 million, making up 23.9% of total revenue[43]. Online Sales and E-commerce - The company reported a significant increase in online sales, which accounted for 40% of total sales, up from 30% last year[2]. - E-commerce sales revenue for the six months ended June 30, 2024, reached RMB 175.3 million, marking a year-on-year increase of 12.4%[25]. - The Group operates 9 flagship stores on major e-commerce platforms such as Tmall.com, JD.com, and Pinduoduo.com as of June 30, 2024[25]. Financial Position and Assets - Total assets as of June 30, 2024, were RMB 5,290,745, down 12.6% from RMB 6,054,438 at the end of 2023[15]. - Current assets decreased by 20.3% to RMB 2,540,285 from RMB 3,187,426 at the end of 2023[15]. - Total equity decreased by 9.9% to RMB 4,584,291 from RMB 5,089,410 at the end of 2023[15]. - As of June 30, 2024, the Group's cash and cash equivalents amounted to approximately RMB1,864.6 million, down from RMB2,309.4 million as of 31 December 2023[59]. Cost Management and Profitability - The gross margin improved to 35%, up from 32% in the previous year, due to better cost management[2]. - The Group's cost of sales rose by 12.8% to RMB2,049.4 million for the first half of 2024, up from RMB1,817.6 million in the same period of 2023[50]. - Distribution expenses surged by 46.9% to RMB352.3 million, increasing as a percentage of revenue from 9.2% to 12.0%[56]. - The increase in sales volume was the primary driver for the rise in cost of sales and distribution expenses[50][56]. Research and Development - Yihai International is investing HK$100 million in R&D for new technology in food safety and supply chain management[2]. - The Group's product development is guided by a project-based system, focusing on consumer demand and diversifying product flavors and forms[19]. Corporate Governance and Compliance - The Audit Committee reviewed the unaudited condensed consolidated interim financial results for the six months ended June 30, 2024, confirming compliance with relevant accounting standards[107]. - The external auditor, PricewaterhouseCoopers, found no issues with the interim financial information prepared in accordance with International Accounting Standard 34[108]. - The Company complied with the Corporate Governance Code during the six months ended June 30, 2024[105]. Shareholder Information - As of June 30, 2024, Mr. Sean Shi holds 130,592,992 ordinary shares, representing approximately 12.60% of the total issued share capital[83]. - Ms. Shu Ping and Mr. Zhang Yong each hold 325,896,021 ordinary shares, representing approximately 31.44% of the total issued share capital[83]. - The Company declared an interim dividend of RMB0.2825 per Share, totaling approximately RMB292,867,750, to be paid on or before September 27, 2024[111].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 10.78 per share, reflecting a potential upside from the current market price [1][5]. Core Insights - The company achieved a revenue of HKD 2.927 billion in H1 2024, representing a year-on-year growth of 11.9%, while the net profit attributable to shareholders was HKD 308 million, down 13.8% year-on-year. The company announced an interim dividend of HKD 292 million, with a payout ratio of 94.87% [1][2]. - The performance of hot pot base materials remained stable, with significant growth in compound seasonings and instant food segments, driven by new product launches and improved channel management [2]. - The gross margin for H1 2024 was 30.0%, a decrease of 0.5 percentage points year-on-year, primarily due to price reductions on products sold to related parties. The net profit margin fell by 3.2 percentage points to 10.5% [3]. - The company emphasizes its high dividend investment value, supported by strong cash flow and low financial pressure, indicating a commitment to returning value to shareholders [4]. Financial Summary - For the fiscal year 2024, the company is projected to generate total revenue of HKD 6.870 billion, with a year-on-year growth of 11.75%. The net profit is expected to be HKD 815.1 million, reflecting a decline of 4.41% [7][8]. - The earnings per share (EPS) for 2024 is forecasted at HKD 0.79, with a price-to-earnings (PE) ratio of 12.61 based on the closing price of HKD 10.78 [5][8]. - The company’s financial metrics indicate a stable gross margin of around 30.51% to 31.58% over the next few years, with a projected return on equity (ROE) of approximately 18% by 2026 [7][8].

Investment Rating - The report maintains an "Accumulate" rating for the company [1][3] Core Views - The company reported a revenue of 2.93 billion HKD for the first half of 2024, representing a year-on-year increase of 11.9%, while the net profit attributable to shareholders was 310 million HKD, a decrease of 13.8% year-on-year [3] - The recovery of third-party business has been noted, with significant growth in the Chinese compound seasoning and convenience food segments [3] - The company plans to distribute a dividend of 293 million HKD, achieving a dividend payout ratio of 95%, which is expected to boost investor confidence [3] Summary by Sections Revenue and Profitability - The company achieved a revenue of 2.93 billion HKD in 1H24, up 11.9% year-on-year, with third-party business revenue reaching 1.91 billion HKD, an increase of 12.2% [3] - The gross margin for 1H24 was 30.0%, a slight decrease of 0.5 percentage points year-on-year, primarily due to raw material cost fluctuations [3] - The net profit margin decreased by 3.0 percentage points to 11.4% due to increased sales expenses [3] Business Segments - Hot pot seasoning revenue was 1.75 billion HKD, up 5.6% year-on-year, with sales volume increasing by 21.4% [3] - Chinese compound seasoning revenue reached 450 million HKD, a growth of 24.4%, driven by new product launches [3] - Convenience food revenue was 700 million HKD, up 22.2%, with significant growth from both related and third-party sales [3] Future Projections - Revenue forecasts for 2024-2026 are adjusted to 6.81 billion HKD, 7.64 billion HKD, and 8.40 billion HKD, with growth rates of 10.8%, 12.1%, and 10.0% respectively [4] - Net profit projections for the same period are 829 million HKD, 967 million HKD, and 1.08 billion HKD, with year-on-year changes of -2.9%, +16.6%, and +12.0% [4] - The expected earnings per share (EPS) for 2024-2026 are 0.80 HKD, 0.93 HKD, and 1.04 HKD, with corresponding price-to-earnings (PE) ratios of 13.3X, 11.4X, and 10.2X [4]

Investment Rating - Buy (Maintained) [2] Core Views - Yihai International achieved revenue of RMB 2.927 billion in H1 2024, a YoY increase of 11.9%, with net profit attributable to shareholders of RMB 308 million, a YoY decrease of 13.8%, and adjusted net profit (excluding exchange gains/losses and government subsidies) of RMB 299 million, a YoY increase of 4.5%, meeting market expectations [2] - The company plans to distribute dividends of RMB 293 million for H1 2024, with a dividend payout ratio of 95.1% [2] - Revenue from third-party customers improved YoY, with significant growth in online and overseas markets expected in 2024 [3] - The company's profitability is expected to improve in H2 2024, driven by better performance in hotpot seasoning and new product launches [4] Revenue Breakdown by Product - Hotpot seasoning revenue reached RMB 1.747 billion, a YoY increase of 5.6%, with third-party and related-party revenue growing by 5.6% and 5.7% respectively [3] - Chinese-style compound seasoning revenue was RMB 454 million, a YoY increase of 24.4%, with third-party and related-party revenue growing by 24.1% and 29.9% respectively [3] - Instant food revenue reached RMB 700 million, a YoY increase of 22.2%, with third-party and related-party revenue growing by 14.5% and 167.7% respectively [3] Revenue Breakdown by Channel - Related-party revenue was RMB 989 million, a YoY increase of 11.5%, while third-party revenue was RMB 1.938 billion, a YoY increase of 12.1% [3] - Within third-party revenue, distributors (including catering and food companies) contributed RMB 1.758 billion, a YoY increase of 12.0%, while e-commerce (flagship stores) contributed RMB 175 million, a YoY increase of 12.4% [3] Profitability and Costs - Gross margin was 30.0% in H1 2024, a YoY decrease of 0.5 percentage points, mainly due to price adjustments for related-party sales [4] - Sales expense ratio was 12.0%, a YoY increase of 2.9 percentage points, driven by increased marketing expenses (advertising expenses increased by 140% YoY) and higher logistics costs [4] - Management expense ratio was 4.8%, a YoY decrease of 0.6 percentage points [4] Future Outlook - The company is expected to see improved performance in hotpot seasoning in H2 2024, with new product launches such as Yunnan wild mushroom base and seafood dipping sauce [4] - Overseas market expansion is a key focus, with the company targeting halal and Middle Eastern markets, supported by production centers in Southeast Asia and a new factory in Thailand [4] - The company has adjusted its "partner" incentive mechanism, which is expected to drive performance in H2 2024 [4] Financial Forecasts - Revenue is expected to grow to RMB 6.841 billion in 2024, RMB 7.702 billion in 2025, and RMB 8.498 billion in 2026, with YoY growth rates of 11.3%, 12.6%, and 10.3% respectively [6] - Net profit attributable to shareholders is forecasted to be RMB 863 million in 2024, RMB 1.007 billion in 2025, and RMB 1.115 billion in 2026 [6] - EPS is expected to be RMB 0.71 in 2024, RMB 0.82 in 2025, and RMB 0.83 in 2026 [6] Valuation - The current stock price implies a 2024 PE ratio of 12x [5] - The company's long-term growth potential is supported by brand building, product matrix expansion, and market and channel development [5]