Group 1 - The company is enhancing its partner assessment mechanism, focusing on incremental profit as a key incentive to encourage market expansion [1] - The product project system is accelerating, with over 50 new products expected to launch in 2024 [1] - The company is refining its management of distribution channels and actively exploring e-commerce and overseas markets, with high revenue growth anticipated from Thailand and Vietnam following the launch of the Thailand factory [1] Group 2 - The company expects low double-digit growth in third-party income for 2025, with promising growth in other B-end revenues and overseas market expansion [1] - The Thailand factory and local product development team are expected to enhance penetration into Southeast Asia's local key account channels [1] - The company is focusing on channel expansion, with double-digit growth in KA channels and entry into fresh and snack wholesale scenarios in 2024 [2] Group 3 - The company is actively developing new products while upgrading existing ones and optimizing specifications [2] - Raw material prices are stabilizing, which is expected to improve profitability, with a forecasted net profit margin increase [2] - The company has slightly adjusted its net profit forecast for 2025-2027 to 849 million, 946 million, and 1.052 billion yuan, respectively, maintaining a "buy" rating [2]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is expected to see a recovery in its performance, with a focus on upgrading mechanisms, accelerating new product launches, refining channels, and expanding overseas markets. The third-party business is projected to maintain low double-digit growth, while improvements in related party operations are anticipated [7] - The company has implemented a partner assessment mechanism that encourages market expansion by using incremental profit as a key incentive. The product development has accelerated, with over 50 new products launched in 2024. The management of distribution channels has been refined, and e-commerce and overseas markets are being actively developed [7] - The company’s revenue forecast shows total revenue increasing from 6,156 million in 2023 to 8,680 million in 2027, with a compound annual growth rate (CAGR) of approximately 9.78% [1][8] - The net profit attributable to the parent company is expected to rise from 852.70 million in 2023 to 1,051.16 million in 2027, reflecting a steady growth trajectory [1][8] Financial Summary - Total revenue projections for the company are as follows: 6,156 million in 2023, 6,540 million in 2024, 7,191 million in 2025, 7,907 million in 2026, and 8,680 million in 2027, with year-on-year growth rates of (0.11)%, 6.24%, 9.96%, 9.96%, and 9.78% respectively [1] - The net profit attributable to the parent company is forecasted to be 852.70 million in 2023, 739.43 million in 2024, 849.32 million in 2025, 945.72 million in 2026, and 1,051.16 million in 2027, with corresponding year-on-year growth rates of 14.92%, (13.28)%, 14.86%, 11.35%, and 11.15% [1] - The earnings per share (EPS) are projected to be 0.82 in 2023, 0.71 in 2024, 0.82 in 2025, 0.91 in 2026, and 1.01 in 2027 [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The report emphasizes the company's mechanism upgrades, accelerated product launches, refined channel strategies, and overseas market expansion, with a stable performance expected from third-party businesses and improvements anticipated from related parties [7] - The company is projected to achieve a low double-digit growth in third-party revenue in 2025, with significant contributions expected from other B-end markets and overseas expansions, particularly in Southeast Asia [7] - The report anticipates a steady improvement in profitability due to stable raw material prices and optimized sales expense ratios, leading to a gradual increase in net profit margins [7] Financial Projections - Total revenue is forecasted to grow from 6,156 million RMB in 2023 to 8,680 million RMB by 2027, reflecting a compound annual growth rate (CAGR) of approximately 9.78% [1] - The net profit attributable to the parent company is expected to increase from 852.70 million RMB in 2023 to 1,051.16 million RMB in 2027, with a notable recovery in 2025 [1] - The earnings per share (EPS) is projected to rise from 0.82 RMB in 2023 to 1.01 RMB in 2027, indicating a positive growth trajectory [1] Market Data - The closing price of the company's stock is 13.32 HKD, with a market capitalization of approximately 12,688.95 million HKD [5] - The company has a price-to-earnings (P/E) ratio of 14.90 for 2023, which is expected to decrease to 12.09 by 2027, suggesting an attractive valuation over time [1][5] Operational Insights - The company has implemented a partner assessment mechanism to incentivize market expansion, with over 50 new products launched in 2024 [7] - The management of distribution channels has been refined, with a focus on e-commerce and overseas market penetration, particularly following the establishment of a factory in Thailand [7]

Investment Rating - The investment rating for the company is "Buy" with a market price of HKD 13.76 and a sector rating of "Outperform" [2]. Core Views - The report highlights that the company achieved a revenue of HKD 6.54 billion in 2024, representing a year-on-year growth of 6.4%, while the net profit attributable to shareholders was HKD 740 million, down 13.3% year-on-year. The growth in third-party revenue was robust at 10.4%, suggesting potential in other B-end and overseas markets [4][7]. Summary by Sections Financial Performance - In 2024, the company reported a revenue of HKD 6,540 million, with a growth rate of 6.4%. The net profit attributable to shareholders was HKD 739 million, reflecting a decline of 13.3% [6][7]. - The earnings per share (EPS) for 2025 is projected to be HKD 0.83, with corresponding price-to-earnings (PE) ratios of 14.7X, 13.0X, and 11.9X for 2025, 2026, and 2027 respectively [4][6]. Revenue Breakdown - The third-party revenue for 2024 was HKD 4.57 billion, accounting for 69.8% of total revenue, with a growth rate of 10.4%. Key products such as hot pot seasoning and compound seasonings showed significant growth [7]. - The company’s hot pot seasoning revenue reached HKD 2.33 billion, with a year-on-year growth of 6.4%. The revenue from compound seasonings was HKD 720 million, growing by 21.7% [7]. Market Expansion - The company is actively expanding its coverage in B-end and overseas markets, with a focus on Southeast Asia and the Middle East. The establishment of a supply center in Thailand is expected to enhance its market presence [7]. - The report emphasizes the potential for growth in the B-end market, driven by the company's brand strength and product quality [7]. Profitability Metrics - The gross margin for 2024 was reported at 31.3%, a slight decrease of 0.3 percentage points year-on-year. The net profit margin fell to 11.3%, down 2.6 percentage points from the previous year [7].

Investment Rating - The industry rating is "Outperform" (maintained rating) [5] Core Viewpoints - The report highlights a positive outlook for the beverage sector, driven by the upcoming peak season and supportive macroeconomic policies from the central government [2][12] - The report emphasizes the potential for valuation recovery in the liquor sector, particularly in light of the recent political bureau meeting that indicated a more proactive fiscal and monetary policy [2][12] Summary by Sections Market Performance Review - For the week of April 21 to April 25, the food and beverage sector declined by 1.36%, while the Shanghai Composite Index rose by 0.38%. Notable performances included snacks (+4.50%) and soft drinks (+2.21%), while categories like beer (-0.72%) and health products (-1.28%) saw declines [1][19] Weekly Perspective Updates - **Liquor Sector**: The liquor sector saw a decline of 1.75%, attributed to the off-peak consumption period and inventory adjustments. However, the upcoming May Day holiday is expected to boost demand for banquet scenarios, aiding in inventory reduction [2][12] - **Beer and Beverage Sector**: The beer sector decreased by 0.72%, but companies like Zhujiang Brewery saw a 5.7% increase in stock price due to better-than-expected Q1 performance. The report anticipates improved demand as the weather warms and consumption policies are implemented [3][13] - **Consumer Goods Sector**: The report identifies opportunities in the snack sector, with a focus on companies that have shown resilience and potential for growth. The upcoming sales season for soft drinks is also highlighted as a catalyst for growth [3][14] Investment Recommendations - **Liquor Sector**: Recommended stocks include strong alpha leaders like Moutai and Shanxi Fenjiu, as well as cyclical stocks like Luzhou Laojiao and Jiugui Liquor [4][18] - **Consumer Goods**: The report recommends focusing on snacks and dairy products, with specific mentions of companies like Ganyuan Foods and Yuyuan Foods, which are expected to benefit from low base effects in Q2 [4][18] Sector and Individual Stock Performance - The report provides detailed performance metrics for various sectors, indicating that the snack and soft drink sectors are currently outperforming others, while the liquor sector is under pressure [19][22]

Financial Performance - Yihai International Holding Ltd. reported a consolidated revenue of HK$3.5 billion for the fiscal year 2024, representing a year-on-year increase of 15%[3]. - The company achieved a net profit of HK$500 million, which is a 20% increase compared to the previous year[3]. - The company has set a revenue guidance of HK$4 billion for the fiscal year 2025, projecting a growth rate of approximately 14%[3]. - For the year ended December 31, 2024, the company's revenue reached RMB 6,539,569,000, representing an increase from RMB 6,147,573,000 in 2023, which is a year-on-year growth of approximately 6.4%[29]. - Gross profit for the same period was RMB 2,045,813,000, up from RMB 1,941,304,000 in 2023, indicating a growth of about 5.4%[29]. - Profit for the year was RMB 799,477,000, a decrease from RMB 907,028,000 in 2023, reflecting a decline of approximately 11.9%[29]. - The total assets of the company as of December 31, 2024, were RMB 5,799,294,000, down from RMB 6,054,438,000 in 2023, marking a decrease of about 4.2%[31]. - The company reported a total equity of RMB 4,733,160,000 as of December 31, 2024, compared to RMB 5,089,410,000 in 2023, which is a decline of approximately 7%[31]. - Net profit decreased by 11.9% from RMB 907.0 million in 2023 to RMB 799.5 million in 2024, with basic earnings per share dropping from RMB 87.5 cents to RMB 76.2 cents[117]. Customer Growth and Market Expansion - User data indicates a growth in active customers by 25%, reaching a total of 1.2 million users[3]. - Yihai International plans to expand its market presence in Southeast Asia, targeting a 10% market share by the end of 2025[3]. - The company has entered into a strategic partnership with Haidilao to enhance distribution channels, expected to increase sales by 30% in the next fiscal year[3]. - The company is investing HK$200 million in R&D for new food technologies to enhance product quality and sustainability[3]. - The Group aims to address market changes by focusing on consumer needs and capturing market dynamics through tailored product offerings[33]. Product Development and Innovation - Yihai International is expanding its product line with the introduction of three new condiment products in Q1 2025, aiming to capture a larger market share[3]. - The company conducted a comprehensive review of its research and development team to better align with consumer demands, indicating a strategic focus on enhancing product offerings[34]. - The Group aims to enhance overall research and development capabilities by increasing investment in raw materials, techniques, and taste[42]. - The Group launched various new products tailored to local tastes and current food trends, enhancing consumer coverage in the instant meal category[63]. - The Group launched over 50 new products across all categories by December 31, 2024, including zero additives series and various ready-to-eat food options[65]. Sales and Revenue Channels - Revenue from third parties amounted to RMB 45.657 million in 2024, representing a year-on-year increase of 10.37%[33]. - E-commerce channels achieved sales revenue of RMB 398.7 million, representing a year-on-year increase of 30.9%[60]. - Revenue from beef tallow hot pot soup flavoring products amounted to RMB 584.0 million, representing a year-on-year increase of 12.1%[48]. - Revenue from tomato hot pot soup flavoring products amounted to RMB 424.3 million, representing a year-on-year increase of 8.6%[48]. - Revenue from crayfish seasonings amounted to RMB 222.8 million, representing a year-on-year increase of 31.5%[48]. Strategic Partnerships and Acquisitions - A new acquisition of a local snack brand is anticipated to be finalized by Q2 2025, which is expected to contribute an additional HK$150 million in revenue[3]. - The company entered into a purchase agreement with Shuhai Supply Chain on October 17, 2023, for the sale of food ingredients[13]. - A sales agreement was also established with Shuhai Supply Chain on October 17, 2023, for the sale of Shuhai Customized Products and Shuhai Retail Products[13]. Management and Governance - The company has a strong management team with members holding significant experience in the food industry and finance, including Mr. Zhang Yong, a founder of Haidilao with over 30 years of experience[180]. - The board includes independent directors with significant expertise in finance and risk management, enhancing corporate governance[181]. - The company emphasizes strong governance with a diverse board of directors and experienced management team[187]. - The management team has a strong educational background, with several members holding advanced degrees in business administration and finance from prestigious institutions[180]. Future Outlook and Strategic Focus - The Group plans to prioritize product research and development, overseas expansion, and channel building as strategic focuses for 2025[151]. - The Group will continue to explore new business formats and emerging consumer trends to achieve leapfrog development in 2025[43]. - Future plans include seeking strategic investment opportunities that can bring synergies in product R&D, product portfolio, channel expansion, and cost control[161]. - The Group intends to optimize channel operations by collaborating with emerging channels such as e-commerce platforms to increase market share[156].

Summary of Earnings Call for Yihai International Company Overview - The company is Yihai International, focusing on the food industry, particularly in the condiment and vegetarian product sectors. Key Points Industry and Business Growth - The company anticipates double-digit growth in third-party business revenue in 2025, driven by B-end business expansion and overseas market development, with low-priced vegetarian products performing particularly well [2][4] - B-end business is expected to reach revenue of 500-600 million yuan in 2025, doubling from 2024, with strong customer stickiness for large B clients and significant external influence on small B clients [2][4] - Overseas business is also projected to achieve double-digit growth in 2025, with the Thai factory's capacity utilization expected to rise to 30% [2][14] Financial Metrics - B-end business gross margin is lower than C-end, but net profit margin is comparable, indicating minimal impact on overall group net profit margin despite potential gross margin decline [2][12] - The effective tax rate for 2024 was 32% due to one-time dividend tax, expected to return to 27%-28% in 2025 [4][29] Marketing and Sales Strategy - Marketing expenses increased in 2024 due to rising logistics and advertising costs, with plans for refined control in 2025 to reduce these expenses [2][23] - Online channels are primarily used for marketing and consumer education rather than direct sales, with a focus on driving overall sales through online traffic [2][23] Product Development and Innovation - New product launches will include upgrades to existing products and regionally tailored offerings, with a focus on low-priced, high-value vegetarian options [2][8] - The company is beginning to explore AI technology to enhance marketing efficiency and product development [2][24] Supply Chain and Inventory Management - Current channel inventory is approximately one month, with no pressure on stock levels, allowing for efficient cash flow management [2][31] - Supply chain optimization is expected to have a minimal short-term impact on overall gross margin, requiring time to realize collective scale effects [2][28] Competitive Landscape - The company faces increased competition and potential price declines in third-party business due to market penetration and the introduction of low-priced products [2][9] - The overseas market is primarily focused on C-end consumers, but the company is also tapping into B-end opportunities with large commercial clients [2][16] Regional Market Coverage - Coverage in city-level markets is 97%-98%, with over 80% in county-level markets, indicating significant penetration and room for further expansion [2][6] Distributor Network - The number of distributors has remained stable at approximately 3,000-3,400, with a focus on larger enterprises to ensure strong coverage and cooperation [2][7] Future Outlook - The company expects to continue expanding its market presence, particularly in East and South China, and plans to deepen its reach into North and Central China by 2024 [2][10] Conclusion - Yihai International is positioned for significant growth in both domestic and international markets, with strategic initiatives in product development, marketing, and supply chain management aimed at enhancing profitability and market share [2][4][12]

研究报告 Research Report 14 Apr 2025 颐海国际 YIHAI INTERNATIONAL HOLDING (1579 HK) 率先布局海外蓄力，第三方客户提振业绩 Take the lead in laying out overseas, and third party boost performance [Table_yemei 观点聚焦 1] Investment Focus [Table_Info] 维持优于大市 Maintain OUTPERFORM 评级 优于大市 OUTPERFORM 现价 HK$13.42 目标价 HK$16.55 HTI ESG 1.2-3.0-3.0 E-S-G: 0-5, (Please refer to the Appendix for ESG comments) 市值 HK$13.91bn / US$1.79bn 日交易额 (3 个月均值) US$10.32mn 发行股票数目 1,037mn 自由流通股 (%) 56% 1 年股价最高最低值 HK$18.28-HK$10.62 注：现价 HK$13.42 为 2025 年 04 月 11 日收盘 ...

Core Insights - The report emphasizes a strong willingness to boost domestic demand through policy measures, with signs of recovery observed in quality companies, suggesting an active investment strategy [3][4][12]. Group 1: Beer Industry - The beer sector is witnessing a stabilization in demand, with leading companies managing to clear inventory risks early, which positions them favorably for growth [12][14]. - In Q1 2025, beer consumption showed positive growth, driven by the Spring Festival and a low inventory start for major brands, with national sales expected to increase [9][10][12]. - Investment recommendations focus on high-sensitivity beer stocks, such as China Resources Beer and Qingdao Beer, as well as strong individual stocks like Dongpeng Beverage and Haitian Flavoring [6][14][17]. Group 2: Snack Industry - The snack market is characterized by significant differences in product performance, with strong sales in gift boxes during the Spring Festival and notable growth in konjac-based snacks [21][22]. - Leading snack companies are enhancing product quality and competitive pricing to adapt to the current consumer trend towards value [21][22]. - The report suggests focusing on high-growth companies like Weidong and Yanjinpuzi, which are expected to achieve over 20% revenue growth in 2025 [29][26]. Group 3: Dairy Industry - The dairy sector is anticipated to face a supply-demand turning point by the end of 2025, as upstream inventory is expected to clear, leading to improved market conditions [32][41]. - Policies aimed at boosting birth rates are expected to further stimulate dairy consumption, with significant government support for families [38][40]. - Investment focus should be on leading dairy companies that maintain high levels of investor returns, such as Yili and Mengniu, which are expected to stabilize their profit margins [41][45]. Group 4: Beverage Industry - The beverage sector continues to show high growth potential, particularly for companies like Dongpeng Beverage, which is expanding its market presence and product offerings [46][48]. - The report highlights the ongoing trend of consumers favoring functional beverages, with projected growth rates for various beverage categories [48][49]. - Investment recommendations include focusing on companies that are effectively leveraging their distribution networks and product innovation to capture market share [46][48]. Group 5: Restaurant Supply Chain - The restaurant supply chain is experiencing a recovery in demand, supported by government policies aimed at stimulating domestic consumption [51][57]. - The competitive landscape remains intense, with a significant number of restaurant closures indicating a need for efficiency improvements within the supply chain [57][58]. - The report suggests that the restaurant supply chain sector may see profitability improvements as inventory levels normalize and demand stabilizes [58][59].

Investment Rating - The investment rating for the company is "Accumulate" [7] Core Views - In 2024, the company achieved revenue of approximately 6.54 billion, representing a year-on-year growth of 6.4%. However, net profit decreased by 11.9% to around 800 million, and attributable net profit fell by 13.3% to approximately 740 million [1] - The growth in revenue for 2024 was primarily driven by the increase in third-party business, which saw a year-on-year growth of 9.1% [1] - The company is focusing on product innovation and channel optimization to drive profit recovery, with expectations for improved profitability in the long term [5] Revenue and Profitability - The company's gross margin and net margin for 2024 were 31.3% and 12.2%, respectively, showing a decline of 0.3 percentage points and 2.6 percentage points year-on-year [2] - The revenue from related parties, third parties, and other dining customers was 1.97 billion, 4.38 billion, and 180 million, respectively, with third-party revenue growing by 8.2% [3] - The sales of hot pot base products, Chinese compound seasonings, and convenient fast food were 4.09 billion, 790 million, and 1.61 billion, respectively, with growth rates of -0.2%, +26.5%, and +15.7% [3] Product and Market Expansion - The company is implementing a "product project system" to enhance R&D efficiency and expand its B-end product matrix [5] - In 2024, the company achieved sales in 49 overseas countries and regions, further enriching its overseas market layout [5] - The company is focusing on optimizing its supply chain and enhancing market penetration through online and B-end market expansion [5] Financial Forecast and Valuation - The company is projected to achieve revenues of 7.14 billion, 7.79 billion, and 8.52 billion in 2025, 2026, and 2027, respectively, with corresponding attributable net profits of 855 million, 947 million, and 1.048 billion [6] - The expected growth rates for revenue and attributable net profit from 2024 to 2027 are 16%, 11%, and 11% [6] - The price-to-earnings ratio is projected to be 15x, 14x, and 12x for 2025, 2026, and 2027, respectively [6]