Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 9.78, based on an 18x valuation for 2024 [2][7]. Core Insights - The company is positioned in the lucrative spicy snack food sector, with a compound annual growth rate (CAGR) of approximately 22.6% expected for net profit from 2024 to 2026. The market for flavored noodle products is anticipated to see accelerated market share growth, while konjac products are entering a period of significant growth [2][7]. - The report highlights the company's strong brand recognition and innovative product development capabilities, which are expected to drive continued revenue growth and market expansion [5][20]. Summary by Sections Strategic Positioning - The company has established itself as a leading brand in the spicy snack food market, benefiting from a significant reduction in low-priced products, with the share of products priced below 1 yuan dropping from 81% to 8% over the past decade. This positions the company to potentially increase its market share to over 30% [1][20]. - The konjac product segment is experiencing explosive growth, with a market size exceeding 2 billion yuan, and the company is well-positioned to capitalize on this expansion [1][20]. Product and Channel Development - The company focuses on two core product lines: spicy snacks and vegetable products, with a strong emphasis on product innovation and brand reinforcement. The spicy snack segment, particularly the "spicy strips," remains a solid foundation for growth, while vegetable products are emerging as a significant growth driver [1][20]. - The company is expanding its distribution network, aiming for 1 million offline terminals, and has seen a doubling of its presence in snack wholesale and Douyin channels compared to the previous year [1][20]. Financial Performance - The company's revenue has shown steady growth, with a projected increase from 48.72 billion yuan in 2024 to 77.04 billion yuan by 2026, reflecting a growth rate of 12.85% [3][20]. - The net profit attributable to the parent company is expected to rise from 8.80 billion yuan in 2024 to 16.23 billion yuan in 2026, with a remarkable growth rate of 481.87% in 2024 [3][20]. Market Trends - The spicy snack food market is expected to grow significantly, with the overall market size projected to reach 697 billion yuan by 2026. The report emphasizes the distinct characteristics of spicy snacks, which cater to younger consumers and have a high repurchase rate [1][30]. - The report notes that the flavored noodle product segment is experiencing a surge in demand, driven by consumer preferences and market cultivation efforts, which are expected to lead to substantial market expansion [1][30].

Financial Performance - The company reported a significant increase in revenue, achieving a total of 1.2 billion HKD, representing a 25% growth compared to the previous period[51]. - The company reported a net profit of 200 million HKD, reflecting a 40% increase year-over-year[51]. - The Group recorded total revenue of RMB2,938.6 million, an increase of 26.3% compared to RMB2,327.3 million in the same period last year[26]. - Gross profit increased by 32.2% from RMB1,106.2 million to RMB1,462.3 million, with a gross profit margin rising from 47.5% to 49.8%[26]. - Net profit rose by 38.9% from RMB447.1 million to RMB621.2 million, with a net profit margin increasing from 19.2% to 21.1%[26]. - Revenue for the six months ended June 30, 2024, was RMB 2,938,649,000, an increase from RMB 2,327,279,000 in the same period of 2023, representing a growth of 26.2%[182]. - Profit for the period reached RMB 621,200,000, a significant increase from RMB 447,070,000 in the previous year, representing a growth of 38.8%[182]. Market Expansion and Strategy - The company plans to expand its market presence in Southeast Asia, targeting a 10% market share within the next two years[51]. - A strategic acquisition of a local competitor is in progress, expected to enhance the company's distribution network and product offerings[51]. - The Group focused on product innovation and expanded its product portfolio to meet diversified consumer demands during the Reporting Period[21]. - The Group's omni-channel strategy was enhanced by consolidating traditional snack food channels and leveraging emerging channels like O2O and content e-commerce platforms[25]. - The Group's marketing initiatives aim to align the brand more closely with the lifestyles and consumption habits of the younger generation[24]. Research and Development - Investment in R&D increased by 15%, focusing on developing innovative food products and enhancing production technology[51]. - The Group has established two application R&D centers in Henan and Shanghai, focusing on food engineering, safety, and nutrition as of June 30, 2024[62]. - The Group's R&D capabilities focus on upgrading existing products and launching new ones, utilizing a modularized R&D model[60]. Sustainability and Corporate Responsibility - The board of directors emphasized the importance of sustainability practices, committing to reduce carbon emissions by 20% over the next five years[51]. - The Group is committed to sustainable development, integrating ESG indicators into supply chain risk management and control systems[122][123]. - The Group has developed long-term environmental management goals, including carbon emission reduction and waste reduction[123][124]. - The Group actively participates in charitable endeavors, reinforcing its commitment to corporate social responsibility[123]. Employee and Talent Management - The company is committed to optimizing talent selection and cultivation mechanisms to enhance employee competitiveness and belonging[111]. - The Group emphasizes employee training and development, establishing a systematic talent training system focusing on basic general training, business professional training, and competency improvement training[117]. - Performance bonuses and incentive systems are established to recognize outstanding contributions from employees and organizations[113]. Corporate Governance - The company has adhered to the Corporate Governance Code, maintaining high standards of corporate governance practices during the same period[128]. - The board will continue to review and monitor corporate governance practices to protect shareholders' interests[130]. - The interests of directors and chief executives in shares and debentures are disclosed as per the Securities and Futures Ordinance[134]. Financial Position and Cash Flow - As of June 30, 2024, cash and cash equivalents amounted to RMB4,779.5 million, a 1.9% increase from RMB4,690.5 million[87]. - The company reported a net cash generated from operating activities increased to RMB 730,127,000 in 2024 from RMB 498,723,000 in 2023, representing a growth of 46.4%[194]. - The company incurred interest paid of RMB 8,934,000 in 2024, up from RMB 6,504,000 in 2023, which is an increase of 37.4%[194]. - The total equity attributable to owners of the company increased to RMB 5,884,276 as of June 30, 2024, compared to RMB 5,705,870 at the end of 2023, reflecting a growth of about 3.13%[188]. Shareholder Information - As of June 30, 2024, Mr. LIU Weiping holds 1,904,243,183 shares, representing approximately 80.99% of the total issued share capital[135]. - The total number of shares that may be issued under the RSU Scheme is capped at 10% of the total issued share capital, equating to 235,114,557 shares[137]. - The company has adopted the Model Code for directors' securities transactions, with all directors confirming compliance for the six months ended June 30, 2024[127].

Investment Rating - The report assigns a "Buy" rating for the company, Wei Long, for the first time [3][8]. Core Insights - The report highlights structural opportunities in the snack food industry driven by new consumption trends and channels, particularly in spicy snacks and vegetable products. Wei Long, as a leader in the spicy snack sector, is well-positioned to capitalize on these trends through product innovation and channel expansion [4][6][9]. Summary by Sections 1. Company Overview - Wei Long was founded in 1999 and has established itself as a leader in the spicy snack market, launching successful products like "Da Xiao Mian Jin" and "Mo Yu Shuang" [4][13]. - The company has shown steady revenue growth, with a compound annual growth rate (CAGR) of 12.1% from 2018 to 2023, despite some fluctuations due to external factors [18][21]. 2. Market Opportunities - The spicy snack food sector is expected to grow at a CAGR of 9.6% over the next three years, outpacing the overall snack food industry [24][25]. - Key product categories such as spicy vegetable products and flavored noodles are projected to see significant growth, with expected CAGRs of 17.2% and 8.9%, respectively [28]. 3. Product Strength - Wei Long employs a "multi-category, big single product" strategy, successfully launching and iterating products that resonate with consumers, particularly among younger demographics [6][9]. - The company has successfully expanded its product line, with the "Mo Yu Shuang" product line contributing to a significant increase in revenue from vegetable products, which rose from 10.8% of total revenue in 2018 to 43.5% in 2023 [19][21]. 4. Channel Management - Wei Long has effectively transitioned from traditional retail to modern channels, including e-commerce and snack wholesale, enhancing its market reach [4][6]. - The company has established a robust distribution network, combining direct sales with personal distributors to optimize channel performance [4][6]. 5. Financial Projections - Revenue forecasts for 2024-2026 are projected at 59.35 billion, 69.39 billion, and 78.06 billion yuan, with respective growth rates of 21.83%, 16.91%, and 12.50% [7][8]. - The net profit for the same period is expected to be 11.06 billion, 13.13 billion, and 15.05 billion yuan, with growth rates of 25.62%, 18.76%, and 14.60% [8][9]. 6. Valuation and Investment Advice - The report suggests a target price of 8.76 HKD per share based on a price-to-earnings (P/E) ratio of 17 for 2024, reflecting the company's growth potential and market position [8][9].

Investment Rating - The investment rating for the company is "Outperform the Market" [3][6]. Core Insights - The company reported a significant increase in revenue and profit, with a main business revenue of 2.939 billion HKD (up 26.3% year-on-year) and a net profit attributable to shareholders of 621 million HKD (up 39.0% year-on-year) for the first half of 2024. A cash dividend of 376 million HKD was proposed, corresponding to a payout ratio of 60.56% [3][6]. - The growth in revenue was driven by an increase in gross margin, which rose by 2.2 percentage points to 49.8%, attributed to improved capacity utilization and a decrease in some raw material prices. The gross profit increased by 32.2% [3][6]. - The company continues to expand its product range, particularly in vegetable products, which saw a revenue increase of 56.6% year-on-year, now accounting for 49.7% of total revenue [3][6]. Summary by Sections Revenue and Profit Growth - The company achieved a main business revenue of 2.939 billion HKD, reflecting a year-on-year growth of 26.3%. The net profit attributable to shareholders reached 621 million HKD, marking a 39.0% increase year-on-year. The proposed cash dividend is 376 million HKD, with a payout ratio of 60.56% [3][6]. Gross Margin and Expenses - The overall gross margin improved to 49.8%, up 2.2 percentage points year-on-year, due to enhanced capacity utilization and lower raw material costs. The gross profit increased by 32.2%. The sales expense ratio increased by 0.4 percentage points, while the management expense ratio decreased by 1.2 percentage points [3][6]. Product Strategy and Market Penetration - The company adopted a "multi-category, large single product" strategy, launching various products to meet diverse consumer needs. The vegetable product segment achieved a revenue of 1.461 billion HKD, up 56.6% year-on-year, and accounted for 49.7% of total revenue [3][6]. - The company’s seasoning noodle products generated 1.354 billion HKD in revenue, with a gross margin of 47.9%, while the vegetable products maintained a gross margin of 52.6% [3][6]. Channel Development - The company has established a nationwide distribution network with 1,822 offline distributors. Offline channels generated 2.590 billion HKD in revenue, up 25.4% year-on-year, while online channels achieved 349 million HKD, reflecting a growth of 33.2% [6][8]. - The online revenue includes 137 million HKD from online distribution and 165 million HKD from direct online sales, indicating a strong push towards online channel development [6][8]. Financial Forecast - The company is projected to achieve total revenues of 6.115 billion HKD, 7.503 billion HKD, and 8.962 billion HKD for 2024, 2025, and 2026 respectively, with net profits of 1.188 billion HKD, 1.505 billion HKD, and 1.833 billion HKD for the same years [5][6].

Investment Rating - The report maintains a "Buy" rating for the company with a current price of HKD 6.85 and a target price not specified for the next six months [1]. Core Insights - The company reported a revenue of CNY 2.94 billion for the first half of 2024, representing a year-on-year increase of 26.3%. The net profit attributable to the parent company was CNY 620 million, up 38.9% year-on-year, exceeding market expectations [2]. - The growth in vegetable products and the establishment of an omnichannel strategy are key drivers of performance. Revenue from seasoning noodles, vegetable products, and bean products reached CNY 1.35 billion, CNY 1.46 billion, and CNY 120 million respectively, with year-on-year growth rates of 5.0%, 56.6%, and 17.5% [2]. - The overall gross margin improved to 49.8%, an increase of 2.3 percentage points year-on-year, driven by enhanced capacity utilization and a decrease in raw material costs [2]. - The company is focusing on product innovation and channel expansion, particularly in the O2O and bulk snack channels, which are expected to contribute significantly to future growth [2]. Financial Summary - For the first half of 2024, the company achieved a gross margin of 49.8%, with a net profit margin of 21.2%, reflecting improvements in revenue and gross margin [2]. - The forecasted net profits for 2024, 2025, and 2026 are CNY 1.19 billion, CNY 1.41 billion, and CNY 1.62 billion respectively, with corresponding EPS of CNY 0.50, CNY 0.60, and CNY 0.69 [2][3]. - The company is positioned in a favorable market segment for spicy food products, with expectations for continued growth in multiple product categories [2].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of 8.32 HKD, compared to the last closing price of 6.85 HKD [1][3]. Core Insights - The company reported better-than-expected performance for H1 2024, achieving a revenue of 2.936 billion CNY, a year-on-year increase of 26.3%, and a net profit of 621 million CNY, up 38.93% year-on-year [3]. - The growth in revenue was driven by a significant increase in the vegetable product segment, which saw a 56.6% year-on-year increase, surpassing the traditional noodle product segment for the first time [3]. - The company has successfully expanded its distribution channels, with a total of 1,822 offline distributors by the end of June, and has seen substantial growth in e-commerce and new retail channels [3]. - The gross margin improved to 49.8%, up 2.3 percentage points year-on-year, due to declining raw material prices and an increased proportion of high-margin vegetable products [3]. Financial Summary - For H1 2024, the company achieved revenues of 1.354 billion CNY from noodle products, 1.461 billion CNY from vegetable products, and 124 million CNY from bean products, with respective year-on-year growth rates of 5%, 56.6%, and 17.5% [3]. - The company expects revenue growth rates of 24.14%, 15.58%, and 13.16% for 2024, 2025, and 2026, respectively, with net profit growth rates of 37.23%, 15.55%, and 15.22% for the same years [4][3]. - The earnings per share (EPS) are projected to be 0.51 CNY, 0.59 CNY, and 0.68 CNY for 2024, 2025, and 2026, respectively, with corresponding price-to-earnings (PE) ratios of 12x, 11x, and 9x [4][3].

Investment Rating - The report maintains an "Outperform" rating for Weilong [2][10]. Core Insights - In the first half of 2024, Weilong achieved revenue of 2.94 billion yuan, a year-on-year increase of 26.3%, and a profit of 620 million yuan, a year-on-year increase of 38.9% [6][10]. - Vegetable products have become the largest category, with significant growth in seasoned noodle products, which resumed growth for the first time since early 2022 [7][10]. - The gross profit margin improved to 49.8%, up 2.3 percentage points year-on-year, driven by increased capacity utilization and a decline in raw material prices [8][10]. - The company declared an interim dividend of 0.16 yuan per share for 2024H1, totaling 376 million yuan, which is approximately 60% of the net profit for the period [9][10]. Revenue and Profitability - Revenue from vegetable products, seasoned noodle products, and soy products in 2024H1 was 1.35 billion, 1.46 billion, and 120 million yuan respectively, with year-on-year growth rates of 5.0%, 56.6%, and 17.5% [7][10]. - The net profit margin for 2024H1 was 21.1%, an increase of 1.9 percentage points year-on-year [8][10]. Financial Forecasts - The revenue forecasts for 2024 to 2026 are 5.83 billion, 6.69 billion, and 7.56 billion yuan, with corresponding net profits of 1.05 billion, 1.21 billion, and 1.39 billion yuan [10]. - The expected EPS for 2024 to 2026 is 0.45, 0.52, and 0.57 yuan respectively [10]. Valuation - Based on comparable company valuations, Weilong is assigned a target price of HK$9.77, reflecting a 20 times PE ratio for 2024 [10].

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].