Summary of Conference Call Company and Industry - The company operates in the food industry, specifically focusing on vegetable products and snacks. Core Points and Arguments - In the first half of this year, the company achieved certain results in its various initiatives [1] - The company adheres to a multi-category and large single product strategy, emphasizing strict quality control [1] - For the first time, the sales of vegetable products surpassed that of spicy snacks in the first half of the year [1] Other Important but Possibly Overlooked Content - The company's commitment to quality and product diversification is a key aspect of its strategy, which may indicate a shift in consumer preferences towards healthier options [1]

Investment Rating - The report assigns a "Buy" rating to the company, Wei Long Mei Wei (9985.HK) [2]. Core Insights - The company is positioned in the spicy snack sector, with significant growth potential in its core products, spicy strips and konjac products. The report highlights the company's strong brand recognition and channel advantages, which are expected to drive market share growth [2][8]. - The company is projected to achieve an EPS of 0.49, 0.61, and 0.74 RMB for the years 2024 to 2026, respectively, with a target market value of 18.5 billion RMB by 2025, corresponding to a target price of 8.53 HKD per share [2][3]. Summary by Sections Investment Logic - The company is a leading brand in spicy snacks, with a market share of over 10% in the noodle products segment, indicating substantial room for growth compared to competitors [7]. - The konjac product line is experiencing a market expansion phase, with the company holding a 60-70% market share in this category, positioning it well for future growth [7][8]. Industry Overview - The spicy snack market in China was valued at 172.9 billion RMB in 2021, with a compound annual growth rate (CAGR) of 8.7% from 2016 to 2021, indicating a strong consumer preference for spicy flavors [17]. - The noodle products segment is a significant part of the snack food industry, with a market size of approximately 45.5 billion RMB in 2021, growing at a CAGR of 9.4% [17]. Competitive Advantages - The company has demonstrated strong product innovation capabilities and effective marketing strategies, which have helped it build a robust brand image and consumer loyalty [8][9]. - The management team is experienced, with a focus on industrialization and brand marketing, which has contributed to the company's growth trajectory [13][14]. Future Outlook - The company is expected to accelerate the introduction of new products, enhancing its market presence in both noodle and konjac segments [8]. - The overall supply chain efficiency is anticipated to improve, supporting stable profit growth as the company enters a revenue expansion phase [8].

Investment Rating - The report assigns a "Buy" rating for the company, Wei Long Mei Wei (9985.HK) [2]. Core Viewpoints - The company is positioned in the spicy snack sector, with significant growth potential in its core products, spicy strips and konjac products, which are expected to become classic categories in the snack market [7][8]. - The company has a strong brand presence and channel advantages, with a clear growth path for market share expansion in its core products [2][8]. - The report forecasts EPS for 2024, 2025, and 2026 to be 0.49, 0.61, and 0.74 CNY respectively, with a target market value of 18.5 billion CNY and a target price of 8.53 HKD per share [2]. Summary by Sections Investment Logic - The company is a leading brand in spicy snacks, with a historical preference for spicy flavors in Chinese cuisine, which enhances its market potential [7]. - The spicy strip product has a market share of over 10%, with significant room for growth compared to leading brands in other snack categories [7]. - The konjac product line is currently experiencing a market expansion phase, with the company holding a 60-70% market share in this segment [7][8]. Industry Overview - The spicy snack market is growing rapidly, with a market size of 172.9 billion CNY in 2021 and a compound annual growth rate (CAGR) of 8.7% from 2016 to 2021 [17]. - The report highlights the increasing consumer preference for low-calorie and healthy snacks, positioning konjac products favorably in the market [17]. Competitive Advantages - The company has demonstrated strong product innovation capabilities and effective marketing strategies, which have helped to establish its brand and expand its market presence [8]. - The company has a robust supply chain and is expected to improve its profitability as it enters a revenue expansion cycle [8]. Future Outlook - The company is expected to accelerate the introduction of new products, enhancing its market share in both spicy strips and konjac products [8]. - The long-term vision includes becoming a multi-category snack company, leveraging its strong brand and product innovation capabilities [8].

业绩简评 8 月 15 日公司发布半年度业绩，24H1 实现营收 29.4 亿元，同比 +26.3%；实现归母净利润 6.2 亿元，同比+38.9%。 经营分析 全品类恢复增长，提价影响逐步消化。1）分产品看，24H1 面制品 /菜制品/豆制品及其他销售额分别为 13.5/14.6/1.2 亿元，同比 +5.0%/+56.6%/+17.5%。受益于新规格补充及新品上市，面制品提 价约 2 年后恢复增长。菜制品延续高增，系魔芋爽老品稳健、小 魔女新品上市表现强劲。2）24H1 线下/线上渠道销售额同比 +25.4%/+33.2%。线下合作头部零食专营店、O2O、会员电商等新 兴渠道，且传统渠道单点卖力持续提升，助销辅销模式发挥成效。 24H1 公司经销商数量为 1822 家，较 23 年底增长 6.7%。3）分区 域来看，华东/华中/华北/华南/西南/西北/海外实现收入同比 +31.88%/+12.50%/+20.89%/+33.06%/+34.09%/+26.10%/-23.05%。 华中增速略慢，我们推测主要系零食量贩渠道竞争较为激烈，海 外下滑系同期高基数。 成本下行+产品结构优化+供应链完善，盈利能力持 ...

Investment Rating - The report assigns an "Accumulate" rating to the company [3][12]. Core Views - The company has demonstrated accelerated revenue and profit growth in the first half of 2024, driven by new product launches, channel expansion, and brand building, which are expected to strengthen its leading position in the segment and further unlock performance potential [3]. - The report revises the company's EPS forecasts for 2024, 2025, and 2026 to 0.47, 0.53, and 0.60 CNY respectively, reflecting an increase of +0.04, +0.02, and +0.01 CNY [3]. - The current stock price corresponds to a PE ratio of 13.5X for 2024, based on an exchange rate of 1 HKD = 0.92 CNY [3]. Revenue and Profit Performance - In the first half of 2024, the company reported revenue of 2.939 billion CNY, a year-on-year increase of 26.3%, and a net profit attributable to shareholders of 621 million CNY, up 38.9% year-on-year [3]. - The company declared an interim dividend of 0.16 CNY per share, totaling 376 million CNY, which represents approximately 60% of the net profit [3]. Product Category Performance - Revenue from vegetable products surged to 1.461 billion CNY, a year-on-year increase of 56.6%, making it the largest product category, accounting for 49.7% of total revenue [3]. - Revenue from seasoning noodle products reached 1.354 billion CNY, recovering with a 5.0% year-on-year growth, while revenue from bean products and others increased by 17.5% to 124 million CNY [3]. Channel Performance - Revenue from offline and online channels was 2.590 billion CNY and 349 million CNY respectively, with year-on-year growth of 25.4% and 33.2% [3]. - The company is experiencing growth in emerging channels such as snack wholesale, O2O, and e-commerce, with an expected increase in the proportion of direct sales [3]. Cost and Margin Improvement - The gross margin improved by 2.3 percentage points to 49.8% in the first half of 2024, driven by a favorable product mix and increased contribution from high-margin vegetable products [3]. - The net profit margin increased by 1.9 percentage points to 21.1% [3].

2024 年 8 月 17 日 公司研究 蔬菜制品收入增长亮眼，利润率显著改善 ——卫龙美味（9985.HK）2024 年半年报点评 增持（维持） 当前价：6.85 港元 作者 分析师：陈彦彤 执业证书编号：S0930518070002 021-52523689 chenyt@ebscn.com 分析师：汪航宇 执业证书编号：S0930523070002 021-52523174 wanghangyu@ebscn.com 分析师：聂博雅 执业证书编号：S0930522030003 021-52523808 nieboya@ebscn.com 市场数据 总股本(亿股) 23.51 总市值(亿港元)： 161.05 一年最低/最高(港元)： 4.48/7.70 近 3 月换手率： 1.98% 股价相对走势 -40% -30% -20% -10% 0% 10% 23/823/9 23/1023/1123/1224/124/224/324/424/524/624/7 卫龙美味 恒生指数 收益表现 | --- | --- | --- | --- | |-------|-------|-------|-------| | ...

Investment Rating - The report maintains an "Outperform" rating for the company, indicating a positive outlook compared to the market [4]. Core Insights - The company reported a revenue of 2.939 billion HKD for the first half of 2024, representing a year-on-year increase of 26.3%. The net profit attributable to shareholders was 621 million HKD, up 38.9% year-on-year, aligning with market expectations [4]. - The company declared an interim dividend of 0.16 HKD per share, which accounts for approximately 60% of the net profit for the first half of the year [4]. - The company is projected to achieve net profits of 1.033 billion, 1.185 billion, and 1.354 billion HKD for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 17%, 15%, and 14% [4]. Revenue Breakdown - The revenue from the company's product segments includes 1.35 billion HKD from seasoning noodles, 1.46 billion HKD from vegetable products, and 120 million HKD from bean products and others, with year-on-year growth rates of 5%, 56.6%, and 17.5%, respectively [4][5]. - The significant growth in vegetable products is attributed to the strong performance of konjac products, particularly the newly launched sub-brand "Little Konjac," which has expanded its product offerings and distribution channels [4][5]. Profitability Metrics - The company's gross margin improved to 49.8%, an increase of 2.3 percentage points year-on-year, driven by higher capacity utilization and lower raw material costs [5]. - The net profit margin reached 21.2%, reflecting a year-on-year increase of 1.9 percentage points [5]. - The overall capacity utilization rate for the first half of 2024 was 66.5%, compared to 49.9% in the same period last year [5]. Financial Projections - The company is expected to generate revenues of 5.607 billion, 6.354 billion, and 7.232 billion HKD for 2024, 2025, and 2026, respectively, with corresponding year-on-year growth rates of 15%, 13%, and 14% [6]. - The projected earnings per share for the next three years are 0.44, 0.50, and 0.58 HKD, with a net asset return rate of 17.81%, 18.27%, and 17.46% for the same period [6].

Financial Performance - Total revenue for the six months ended June 30, 2024, was RMB 2,938.6 million, an increase of 26.3% year-on-year[2]. - Gross profit for the same period was RMB 1,462.3 million, reflecting a year-on-year increase of 32.2%[2]. - The gross profit margin improved to 49.8%, up by 2.3 percentage points compared to the previous year[2]. - Profit for the period reached RMB 621.2 million, representing a year-on-year increase of 38.9%[2]. - Basic earnings per share were RMB 0.27, an increase of 42.1% year-on-year[2]. - The company declared an interim dividend of RMB 0.16 per ordinary share[2]. - For the six months ended June 30, 2024, total revenue reached RMB 2,938,649 thousand, a significant increase from RMB 2,327,279 thousand for the same period in 2023, representing a growth of approximately 26.2%[12][14][16]. - The gross profit for the six months ended June 30, 2024, was RMB 1,462,285 thousand, compared to RMB 1,106,202 thousand in the prior year, indicating a gross profit margin improvement[12][13]. - The company reported a total income tax expense of RMB 212,673,000 for the six months ended June 30, 2024, compared to RMB 157,290,000 in the same period of 2023[20]. - Net profit increased by 38.9% to RMB 621.2 million, with a net profit margin of 21.1%, up 1.9 percentage points from the previous year[34]. Assets and Liabilities - Non-current assets totaled RMB 4,998.3 million as of June 30, 2024, compared to RMB 4,178.9 million at the end of 2023[6]. - Current assets amounted to RMB 2,326.6 million, down from RMB 2,874.7 million at the end of 2023[6]. - Total liabilities increased to RMB 1,440.6 million from RMB 908.0 million at the end of 2023[7]. - Net assets attributable to the company’s owners were RMB 5,884.3 million, up from RMB 5,705.9 million at the end of 2023[7]. Revenue Breakdown - The revenue from the main product segments includes RMB 1,353,826 thousand from seasoning noodles, RMB 1,461,256 thousand from vegetable products, and RMB 123,567 thousand from bean products for the six months ended June 30, 2024[12]. - The revenue from seasoning noodle products increased by 5.0% year-on-year to RMB 1,353.8 million, accounting for 46.1% of total revenue, down from 55.4% in the previous year[38]. - The revenue from vegetable products surged by 56.6% year-on-year to RMB 1,461.3 million, representing 49.7% of total revenue, up from 40.1% in the previous year[39]. - The revenue from soybean products and other products rose by 17.5% year-on-year to RMB 123.6 million, accounting for 4.2% of total revenue, slightly down from 4.5% in the previous year[39]. Cost and Expenses - The cost of sales for the six months ended June 30, 2024, totaled RMB 1,476,364 thousand, up from RMB 1,221,077 thousand in the same period of 2023, reflecting an increase in production costs[12][13]. - Employee benefits expenses for the six months ended June 30, 2024, were RMB 540,127 thousand, a notable increase compared to RMB 51,943 thousand in the previous year[18]. - The total cost of sales, distribution, and administrative expenses amounted to RMB 2,194,122 thousand for the six months ended June 30, 2024, compared to RMB 1,807,457 thousand in the previous year[18]. - Distribution and selling expenses rose to RMB 475.5 million, a 29.5% increase from RMB 367.2 million, accounting for 16.2% of total revenue[55]. - Management expenses increased by 10.5% to RMB 242.3 million, representing 8.2% of total revenue, down from 9.4% in the previous year[56]. Market and Consumer Trends - The Chinese economy showed a GDP growth of 5.0% year-on-year in the first half of 2024, indicating a stable economic performance amidst global uncertainties[31]. - Consumer optimism regarding the macroeconomic situation increased, with 76% of respondents expressing confidence, up from 73% a year ago[31]. - The market size of the Chinese leisure food industry is projected to reach RMB 1,009.3 billion in 2024, driven by rising disposable income and innovative product launches[31]. - The company noted a shift in consumer preferences towards high-quality and diverse leisure food products, creating structural opportunities in the market[32]. - Emerging sales channels such as O2O and content e-commerce are increasingly capturing market share from traditional channels, driving innovation and market expansion in the leisure food sector[32]. Research and Development - The company continues to enhance its R&D capabilities, focusing on a "multi-category, large single product" strategy to meet diverse consumer needs[33]. - New product innovations include "Little Witch" spicy barbecue konjac strips and "Crispy Fire" green lime spicy chips, aimed at attracting younger consumers[35][36]. - The group established two application research centers in Henan and Shanghai, enhancing its R&D capabilities in food engineering and safety[1]. - The company is focusing on enhancing its research and development capabilities, with a budget allocation of HKD 90.3 million for product development activities[77]. Corporate Governance and Social Responsibility - The company emphasizes the importance of sustainable development and corporate social responsibility, integrating these concepts into daily operations and strategic planning[86]. - The company aims to enhance its governance structure and risk management, focusing on ethical standards and food safety as a core principle[86]. - The company has adhered to the corporate governance code and all applicable provisions since January 1, 2024[90]. - The company has adopted the standard code for securities transactions by directors, confirming compliance by all directors during the reporting period[91]. Future Outlook - The company aims to enhance its market presence and explore new opportunities[92]. - Future outlook and performance guidance will be a key component of the mid-term report[92].

公司研究/食品 证券研究报告 卫龙美味(9985.HK)公司研究报告 首次覆盖:中国辣味休食龙头, 盈利能力优异,第二曲线快速成长 投资要点: 中国领先辣味休食企业,盈利能力优异。公司是中国领先的辣味休闲食品企 业,根据招股说明书援引弗若斯特沙利文的资料,按 2021 年零售额计,公司 在中国所有辣味休闲食品企业中排名第一,市场份额达到 6.2%,且在调味面 制品及辣味休闲蔬菜制品细分品类的市场份额均排名第一。此外公司是中国 倍受年轻消费者喜爱的休闲食品品牌。公司营收从 2018 年的 27.52 亿元增长 至 2023 年的 48.72 亿元(CAGR=12.10%),保持稳健成长。 辣卤休食行业前景广阔,公司单品仍有较大提升空间。辣味休闲食品的零售 额由 2016 年的 1139 亿元增长至 2021 年的 1729 亿元(CAGR=8.7%),高于中 国整体休闲食品行业年复合增长率。此外辣味休闲食品在整体休闲食品行业 中的份额从 2016 年的 18.6%扩张至 2021 年的 21.0%,呈现较高景气度。公司 是中国休闲食品行业内增长最快、盈利能力最强的企业之一。对比三只松鼠 坚果 41.07 亿元、 ...

Investment Rating - The report maintains an "Outperform" rating for the company [1] Core Views - The company is a leading spicy snack food enterprise in China, with a strong brand appeal among young consumers and a market share of 6.2% in 2021, ranking first in both seasoned noodle products and spicy vegetable snack categories [13] - The spicy snack food industry has a promising outlook, with retail sales growing from CNY 113.9 billion in 2016 to CNY 172.9 billion in 2021 (CAGR=8.7%), and the company's products still have significant room for growth [21] - The company's revenue grew from CNY 2.752 billion in 2018 to CNY 4.872 billion in 2023 (CAGR=12.10%), driven by its strong product portfolio and market position [13] Product Performance - **Seasoned Noodle Products**: Revenue grew from CNY 2.162 billion in 2018 to CNY 2.649 billion in 2023 (CAGR=3.35%), with average selling price (ASP) increasing from CNY 13.90/kg to CNY 20.49/kg [4] - **Vegetable Products**: Revenue surged from CNY 298 million in 2018 to CNY 2.119 billion in 2023 (CAGR=48.05%), driven by products like "Moyu Shuang" and "Fengchi Seaweed" [4] - **Bean Products & Others**: Revenue declined from CNY 292 million in 2018 to CNY 204 million in 2023 (CAGR=-6.93%), but ASP increased from CNY 22.41/kg to CNY 38.36/kg [30] Channel Strategy - The company's offline channel revenue accounted for 90.40% of total revenue from 2018 to 2023, with a CAGR of 11.60%, while online channel revenue grew at a CAGR of 17.09% [32] - The company has 1,708 offline distributors as of December 31, 2023, and has been actively expanding into snack vending channels, selling 433,716 boxes of products through this channel in September 2023 [36] Financial Performance - The company's gross margin increased from 34.72% in 2018 to 47.68% in 2023, driven by product mix optimization and cost management [19] - Net profit grew from CNY 476 million in 2018 to CNY 880 million in 2023 (CAGR=13.07%), with net profit margin increasing from 17.26% to 18.01% [19] Industry Outlook - The Chinese snack food market is expected to grow from CNY 825.1 billion in 2021 to CNY 1.1472 trillion in 2026 (CAGR=6.8%), with spicy snack food expected to grow at a CAGR of 9.6% during the same period [21] - The company's market share in the spicy snack food industry is 6.2%, significantly higher than its competitors, and it is one of the fastest-growing and most profitable companies in the industry [22] Valuation - The report forecasts the company's revenue to reach CNY 5.599 billion, CNY 6.367 billion, and CNY 7.136 billion in 2024-2026, with net profit of CNY 1.030 billion, CNY 1.209 billion, and CNY 1.393 billion, respectively [41] - The company is valued at a PE range of 15-19x (2024E), with a target price range of HKD 7.10-8.99 per share [41]