Core Viewpoint - The Supervisory Board of Foshan Haitian Flavoring Food Co., Ltd. has reviewed the employee stock ownership plan for 2025, confirming its compliance with relevant laws and regulations, and highlighting its potential benefits for corporate governance and employee motivation [1]. Summary by Relevant Sections Compliance with Regulations - The employee stock ownership plan aligns with the Company Law, Securities Law, and relevant guidelines, ensuring no harm to the company or shareholders [1]. Voluntary Participation - The plan is based on voluntary participation, with no coercion or forced distribution of shares to employees [1]. Corporate Governance and Development - The plan aims to enhance the company's governance structure and establish a long-term incentive mechanism, which is expected to boost the motivation and creativity of core management and key employees, contributing to the company's sustainable development [1].

Meeting Overview - The sixth meeting of the sixth session of the Supervisory Board of Foshan Haitian Flavoring & Food Co., Ltd. was held on August 14, 2025, with all three supervisors present [1][2]. Financial Reporting - The Supervisory Board approved the 2025 semi-annual report and summary, confirming compliance with relevant regulations and ensuring the information is true, accurate, and complete [1][2]. Profit Distribution - The proposal for the 2025 mid-term profit distribution plan was approved, emphasizing the importance of sharing business development results with investors while considering long-term interests [2][3]. Employee Stock Ownership Plan - The Supervisory Board approved the draft of the 2025 A-share employee stock ownership plan, which will be submitted for shareholder meeting approval [3][4]. Governance Changes - A proposal to abolish the Supervisory Board was approved, allowing the Audit Committee of the Board to assume the responsibilities of the Supervisory Board, aimed at improving corporate governance [4][5].

Market Overview - The Shanghai Composite Index closed at 3857.93 points, above the annual line, with a change of 0.37% [1] - The total trading volume of A-shares reached 28,301.97 billion yuan [1] Stocks Breaking Annual Line - A total of 22 A-shares have surpassed the annual line today, with notable stocks including Guoan Co., Transsion Holdings, and ST Huawen, showing divergence rates of 6.70%, 5.14%, and 4.43% respectively [1] - Stocks with smaller divergence rates that just crossed the annual line include Changjiang Electric, ST Zhongzhuang, and Laobaigan Liquor [1] Top Divergence Rates - The top three stocks with the highest divergence rates are: - Guoan Co. (10.07% increase, 6.70% divergence) - Transsion Holdings (7.17% increase, 5.14% divergence) - ST Huawen (4.86% increase, 4.43% divergence) [1] Additional Stock Performance - Other notable stocks include: - Shenyang Machine Tool (4.49% increase, 3.75% divergence) - Shangong Shenbei (4.20% increase, 3.64% divergence) - ST Boda (4.10% increase, 3.48% divergence) [1]

Group 1 - GIC Private Limited increased its stake in Haitian Flavoring and Food Company Limited (stock code: 03288) by acquiring 456,600 shares at a price of approximately HKD 34.91 per share [1] - The total amount spent on this acquisition was about HKD 15.9386 million [1] - After the purchase, GIC's total shareholding in Haitian Flavoring reached 29.4674 million shares, representing a 10.12% ownership stake [1]

Core Viewpoint - GIC Private Limited has increased its stake in Haitian Flavoring and Food Company Limited, acquiring 456,600 shares at a price of HKD 34.9071 per share, totaling approximately HKD 15.9386 million [1] Company Summary - After the acquisition, GIC Private Limited's total shareholding in Haitian Flavoring and Food Company Limited reached 29,467,400 shares, representing a 10.12% ownership stake [1]

Investment Rating - The investment rating for the company is "Outperform the Market" [5][3][16] Core Views - The company achieved a total revenue of 15.23 billion yuan in the first half of 2025, representing a year-on-year growth of 7.59%. The net profit attributable to shareholders was 3.914 billion yuan, up 13.35% year-on-year [1][7] - The second quarter of 2025 saw a total revenue of 6.915 billion yuan, with a year-on-year increase of 7.00%. The net profit attributable to shareholders reached 1.712 billion yuan, growing 11.57% year-on-year [1][7] - The company has implemented an employee stock ownership plan for 2025, with a total amount of 564 million yuan, and plans to distribute a mid-term cash dividend of 2.60 yuan per 10 shares, totaling 1.52 billion yuan, corresponding to a dividend payout ratio of 39% [2][10][14] Financial Performance Summary - The company’s revenue forecast for 2025-2027 is adjusted to 28.925 billion, 30.942 billion, and 32.891 billion yuan, with year-on-year growth rates of 7.5%, 7.0%, and 6.3% respectively [3][14] - The net profit forecast for the same period is 7.219 billion, 7.888 billion, and 8.615 billion yuan, with year-on-year growth rates of 13.8%, 9.3%, and 9.2% respectively [3][14] - The earnings per share (EPS) are projected to be 1.23, 1.35, and 1.47 yuan for 2025, 2026, and 2027 respectively [3][14] Revenue and Profitability Metrics - The company’s gross margin for the second quarter of 2025 was 40.2%, reflecting a year-on-year increase of 3.9 percentage points [2][8] - The sales and management expense ratios were 7.0% and 2.3% respectively, with slight increases due to higher labor costs [2][8] - The net profit margin for the second quarter was 24.1%, up 1.4 percentage points year-on-year [2][8]

Investment Rating - The report maintains a "Recommended" investment rating for Haitian Flavor Industry Co., Ltd. (603288.SH) with a current stock price of 40.08 yuan [1]. Core Views - The company continues to demonstrate steady growth in performance, with a 7.59% year-on-year increase in revenue to 15.23 billion yuan and a 13.35% increase in net profit to 3.914 billion yuan for the first half of 2025 [4]. - The gross profit margin for the first half of 2025 improved to 40.12%, up 3.26 percentage points from the previous year, attributed to enhanced supply chain management and alleviated raw material cost pressures [7]. - The company is actively expanding its product categories, with soy sauce revenue reaching 7.928 billion yuan (up 9.14%), oyster sauce at 2.502 billion yuan (up 7.74%), and seasoning sauces at 1.626 billion yuan (up 12.01%) [7]. - The company has established a comprehensive sales channel strategy, achieving 13.72 billion yuan in offline sales (up 9.07%) and 0.842 billion yuan in online sales (up 38.97%) in the first half of 2025 [7]. Financial Forecast and Valuation - The company is projected to achieve net profits of 7.067 billion yuan, 7.817 billion yuan, and 8.568 billion yuan for the years 2025 to 2027, respectively, with corresponding EPS of 1.21 yuan, 1.34 yuan, and 1.46 yuan [8]. - The report anticipates a slight upward adjustment in profit forecasts, maintaining a positive outlook on the company's long-term development due to its competitive advantages in supply chain, channel reach, and product offerings [8]. - The estimated P/E ratios for 2025, 2026, and 2027 are 33.2, 30.0, and 27.4, respectively, indicating a favorable valuation trend [8].

Investment Rating - The report maintains a "Buy" investment rating for the company [1][9] Core Views - The company demonstrates strong resilience in performance with steady growth in its main business [1][4] - The report highlights a favorable trend in gross margin due to declining raw material prices, with a projected annual gross margin optimization [5] - The company is actively optimizing its channel strategies and enhancing resource allocation, leading to stable revenue growth despite high baselines [9] Financial Performance - For H1 2025, total revenue reached 15.23 billion yuan, representing an 8% year-on-year increase, while net profit attributable to shareholders was 3.91 billion yuan, up 13% [4] - In Q2 2025, total revenue was 6.92 billion yuan, with a 7% year-on-year increase, and net profit of 1.71 billion yuan, reflecting a 12% increase [4] - The gross margin in Q2 2025 increased by 4 percentage points to 40.21%, driven by lower raw material costs [5] Product and Channel Development - The company reported a 10% increase in soy sauce revenue, reaching 3.51 billion yuan in Q2 2025, supported by customized business expansion and new product penetration [6] - The offline channel revenue for Q2 2025 was 6.16 billion yuan, up 9%, while online channel revenue surged by 35% to 425 million yuan [6] Employee Incentives - The company has introduced an employee stock ownership plan aimed at core management and key employees, with a performance target of at least 10.8% growth in net profit for 2025 [7] Earnings Forecast - The report adjusts the earnings per share (EPS) forecasts for 2025-2027 to 1.22, 1.34, and 1.45 yuan respectively, with corresponding price-to-earnings (PE) ratios of 34, 31, and 29 times [9][11]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expectation that the stock will outperform the market index by more than 15% in the next six months [1][8]. Core Insights - The company reported a steady performance in Q2 2025, with total revenue of 15.23 billion yuan, a year-on-year increase of 7.59%, and a net profit attributable to shareholders of 3.91 billion yuan, up 13.35% year-on-year [5]. - The company continues to optimize its product and channel structure, leading to stable growth in Q2 2025, with revenue of 6.92 billion yuan, a 7.00% increase year-on-year, and a net profit of 1.71 billion yuan, up 11.57% year-on-year [5]. - The core product categories, including soy sauce, seasoning sauce, and oyster sauce, all showed revenue growth, with the fastest growth in other categories. The company achieved revenue of 7.93 billion yuan from soy sauce, 1.63 billion yuan from seasoning sauce, 2.50 billion yuan from oyster sauce, and 2.51 billion yuan from other businesses in H1 2025, with respective year-on-year growth rates of 9.14%, 12.01%, 7.74%, and 16.73% [5]. - The online sales channel maintained rapid growth, with H1 2025 revenue from offline and online channels reaching 13.72 billion yuan and 842 million yuan, respectively, reflecting year-on-year growth of 9.07% and 38.97% [5]. - The company's gross margin improved by 3.88 percentage points to 40.21% in Q2 2025, benefiting from lower raw material prices and product structure optimization. The net profit margin also increased by 1.01 percentage points to 24.80% [5]. - An employee stock ownership plan was announced, aimed at core management and key employees, which is expected to enhance employee motivation and market confidence in the company's long-term development [5]. - The company forecasts earnings per share of 1.21 yuan and 1.32 yuan for 2025 and 2026, respectively, with corresponding PE ratios of 34 times and 31 times [5][6]. Summary by Sections Financial Performance - In H1 2025, the company achieved total revenue of 15.23 billion yuan, a 7.59% increase year-on-year, and a net profit of 3.91 billion yuan, up 13.35% year-on-year [5]. - Q2 2025 revenue was 6.92 billion yuan, with a net profit of 1.71 billion yuan, reflecting year-on-year growth of 7.00% and 11.57%, respectively [5]. Product and Channel Performance - Revenue from core product categories showed positive growth, with soy sauce revenue at 7.93 billion yuan, seasoning sauce at 1.63 billion yuan, oyster sauce at 2.50 billion yuan, and other businesses at 2.51 billion yuan in H1 2025 [5]. - Online sales channels experienced significant growth, with H1 2025 online revenue reaching 842 million yuan, a 38.97% increase year-on-year [5]. Profitability and Future Outlook - The gross margin improved to 40.21% in Q2 2025, and the net profit margin increased to 24.80% [5]. - The company projects earnings per share of 1.21 yuan and 1.32 yuan for 2025 and 2026, with PE ratios of 34 and 31 times, respectively [5][6].

Market Performance - The seasoning and fermentation sector increased by 2.23% on August 29, with Baoli Food leading the gains [1] - The Shanghai Composite Index closed at 3857.93, up 0.37%, while the Shenzhen Component Index closed at 12696.15, up 0.99% [1] Individual Stock Performance - Baoli Food (603170) closed at 14.59, up 6.03% with a trading volume of 73,600 shares and a turnover of 106 million yuan [1] - Haitian Flavoring (603288) closed at 41.44, up 3.39% with a trading volume of 343,600 shares and a turnover of 1.42 billion yuan [1] - Qianhe Flavoring (603027) closed at 12.33, up 1.73% with a trading volume of 292,400 shares and a turnover of 360 million yuan [1] - Hengshun Vinegar (600305) closed at 8.40, up 0.60% with a trading volume of 179,700 shares and a turnover of 151 million yuan [1] - Anji Food (603696) closed at 13.09, down 0.08% with a trading volume of 353,200 shares and a turnover of 473 million yuan [1][2] Capital Flow Analysis - The seasoning and fermentation sector saw a net inflow of 49.09 million yuan from institutional investors, while retail investors experienced a net outflow of 35.54 million yuan [2][3] - Major stocks like Haitian Flavoring had a net inflow of 66.69 million yuan from institutional investors, while retail investors had a net outflow of 37.18 million yuan [3] - Qianhe Flavoring experienced a net inflow of 46.26 million yuan from institutional investors, but a significant net outflow of 89.25 million yuan from retail investors [3]