Company Overview - Xiangpiaopiao Food Co., Ltd. is located in Hangzhou, Zhejiang Province, and was established on August 12, 2005. The company went public on November 30, 2017. Its main business involves the research, production, and sales of milk tea products [2]. Financial Performance - For the first half of 2025, Xiangpiaopiao achieved operating revenue of 1.035 billion yuan, a year-on-year decrease of 12.21%. The net profit attributable to the parent company was -97.39 million yuan, a year-on-year decrease of 230.13% [2]. - Since its A-share listing, the company has distributed a total of 757 million yuan in dividends, with 313 million yuan distributed over the past three years [3]. Stock Performance - As of September 3, the stock price of Xiangpiaopiao was 13.22 yuan per share, with a market capitalization of 5.458 billion yuan. The stock has declined by 18.14% year-to-date, with a 3.99% drop over the last five trading days [1][2]. - The company has appeared on the "Dragon and Tiger List" once this year, with the most recent appearance on June 4, where it recorded a net purchase of 22.7355 million yuan [2]. Shareholder Information - As of June 30, 2025, the number of shareholders for Xiangpiaopiao was 23,300, an increase of 0.31% from the previous period. The average circulating shares per person were 17,693 shares, a decrease of 0.26% [2]. - Among the top ten circulating shareholders, Hong Kong Central Clearing Limited is the ninth largest shareholder, holding 1.0139 million shares as a new shareholder [3]. Market Position - Xiangpiaopiao's main business revenue composition is as follows: 69.09% from instant products, 29.61% from ready-to-drink products, and 1.30% from other supplementary products. The company belongs to the food and beverage industry, specifically in the soft drink sector [2].

Investment Rating - The investment rating for the company is "Accumulate" [1] Core Views - The company's brewing business is under pressure, with profitability declining year-on-year. The revenue for H1 2025 was 1.035 billion yuan, a decrease of 12.21% year-on-year, and the net profit attributable to shareholders was -97 million yuan, with losses widening year-on-year [4][5] - The company is focusing on stabilizing its brewing business while actively expanding its ready-to-drink segment, which showed a revenue increase of 8.03% year-on-year in H1 2025 [5][7] - The report highlights the need to monitor the recovery of the brewing products during peak seasons and the expansion of channels and categories in the ready-to-drink business [7] Summary by Sections Financial Performance - In H1 2025, the brewing business generated revenue of 423 million yuan, down 31.04% year-on-year, primarily due to changes in the consumption environment and the company's efforts to maintain channel health by reducing inventory [5] - The ready-to-drink segment achieved revenue of 591 million yuan, marking an 8.03% increase year-on-year, with Meco fruit tea showing competitive advantages in differentiated packaging [5] - The company's gross margin for H1 2025 was 29.36%, down 1.22 percentage points year-on-year, attributed to negative effects from revenue scale [6] Revenue Breakdown - Revenue from various channels in H1 2025 showed mixed results: distribution channels decreased by 17.01%, while e-commerce channels increased by 12.39% [5][6] - The company reduced the number of distributors by 92 to 1,735, indicating a strategic optimization of the distributor structure [5] Future Outlook - The company plans to focus on the healthy upgrade of products and the development of the "original leaf brewing" series, with a good performance in online repurchase rates for new products [7] - The ready-to-drink business will continue to expand in campus channels and increase its presence in snack retail and dining channels [7] - Profit forecasts for 2025-2027 have been adjusted downwards due to weak demand and negative impacts from delivery platform subsidies [7]

Core Insights - The company has launched two new flavors of Meco fruit tea, "Orange Jasmine" and "Mulberry Jasmine," with the former showing promising sales feedback and potential to become a classic product, while the latter is still in the trial sales phase [1] Group 1: Sales Performance - The company's traditional brewing products faced sales pressure in the first half of 2025 due to changes in external consumer environment, habits, and demand [1] - The sales season was shortened as the Spring Festival occurred earlier compared to the previous year, leading to an early onset of the off-peak season for brewing products [1] - To maintain the interests of distributors and terminals, the company adopted a strategy of reducing channel inventory levels to ensure healthy inventory for the second half of the year [1] Group 2: Ready-to-Drink Business - The company is actively promoting the freezing of terminal points for its ready-to-drink business, particularly in schools and snack wholesale channels where Meco fruit tea has a significant sales share [1] - There is an increased focus on the quality of freezing, with higher requirements for the "layering rate" of ice paths to enhance the effectiveness of freezing [1]

Core Viewpoint - The financial performance of Xiangpiaopiao (603711) in the 2025 mid-year report shows significant declines in both revenue and net profit, indicating challenges in the company's operations and market conditions [1]. Financial Performance Summary - Total operating revenue for 2025 is 1.035 billion yuan, a decrease of 12.21% compared to 2024 [1]. - The net profit attributable to shareholders is -97.39 million yuan, reflecting a year-on-year decline of 230.13% [1]. - The gross profit margin is 29.36%, down 4.0% year-on-year, while the net profit margin is -9.43%, a decrease of 274.52% [1]. - Total expenses (selling, administrative, and financial) amount to 424 million yuan, accounting for 40.99% of revenue, an increase of 20.24% year-on-year [1]. - Earnings per share are -0.24 yuan, a decline of 242.86% compared to the previous year [1]. Key Financial Metrics Changes - Significant changes in financial items include: - Trading financial assets increased by 54.89% due to increased purchases of financial products [3]. - Prepayments rose by 45.7% due to increased brand promotion and consulting fees [3]. - Other receivables decreased by 64.93% due to the recovery of land sale payments [3]. - Inventory decreased by 35.25% due to reduced stocking [3]. - Cash flow from operating activities decreased by 5.57% due to reduced operating inflows [5]. Market and Operational Insights - The company is currently experiencing a sales off-season in its milk tea business, with channel inventory showing a significant year-on-year decrease, indicating a healthy inventory management [4]. - The company's return on invested capital (ROIC) was 4.57% last year, indicating weak capital returns, with a historical median ROIC of 14.14% since its listing [5]. - The company relies heavily on marketing-driven performance, necessitating a thorough examination of the underlying factors driving this performance [5].

Core Viewpoint - The financial performance of Xiangpiaopiao (603711) in the 2025 mid-year report shows significant declines in both revenue and net profit, indicating potential challenges in the company's operations and market conditions [1]. Financial Performance Summary - Total operating revenue for 2025 is 1.035 billion yuan, a decrease of 12.21% compared to 2024 [1]. - The net profit attributable to shareholders is -97.39 million yuan, reflecting a dramatic decline of 230.13% year-on-year [1]. - The gross profit margin is 29.36%, down 4.00% from the previous year [1]. - The net profit margin stands at -9.43%, a decrease of 274.52% year-on-year [1]. - Total expenses (selling, administrative, and financial) amount to 424 million yuan, accounting for 40.99% of revenue, which is an increase of 20.24% [1]. - Earnings per share are -0.24 yuan, a decrease of 242.86% compared to the previous year [1]. Asset and Liability Changes - Cash and cash equivalents increased by 4.93% to 2.149 billion yuan [3]. - Accounts receivable rose by 59.21% to 39.0025 million yuan [3]. - Interest-bearing liabilities increased by 18.90% to 732 million yuan [3]. - Inventory decreased by 35.25% due to reduced stocking [4]. - Deferred tax assets increased by 55.42% due to increased deductible losses [7]. Revenue and Cost Analysis - Revenue from the bubble tea business declined, contributing to a 12.21% drop in operating income [10]. - Operating costs also fell by 10.67%, attributed to the same decline in sales volume [10]. - Research and development expenses increased by 49.11%, indicating a focus on innovation despite overall financial challenges [10]. Market and Operational Insights - The company’s return on invested capital (ROIC) was 4.57%, indicating weak capital returns compared to historical averages [10]. - The company maintains a healthy cash asset position, which is crucial for its operational sustainability [11]. - The company is currently managing channel inventory effectively, with a notable decrease in inventory levels compared to the previous year [11].

Group 1: Xiangpiaopiao's Performance - Xiangpiaopiao reported a revenue of 1.035 billion yuan for the first half of 2025, a year-on-year decline of 12.21%, with a net loss of 97 million yuan, down 230.13% year-on-year [1] - The traditional brewing business generated 423 million yuan, a decrease of 31.04% year-on-year, reflecting challenges in the market [1] - The shift in consumer preferences towards ready-to-drink and freshly made beverages has pressured the brewing business, compounded by an earlier Spring Festival affecting sales [1][2] Group 2: Ready-to-Drink Business Growth - The ready-to-drink segment achieved revenue of 591 million yuan, marking an 8.03% increase year-on-year, and for the first time, its revenue share surpassed that of the brewing business, reaching 58.27% [2][6] - The ready-to-drink business has shown consistent growth over the past three years, with revenues of 638 million, 901 million, and 973 million yuan from 2022 to 2024 [2] Group 3: New Product Launches and Marketing Strategies - Xiangpiaopiao introduced new flavors such as "Conglan Yulu" and "Xinhui Chenpi Moonlight White," but these products are still in the market exploration phase and have not yet significantly impacted overall performance [1] - The company has engaged in marketing initiatives, including sponsoring events like "Youth Mango Night" to enhance brand visibility among younger consumers [6][7] Group 4: Industry Context and Competitive Landscape - Analysts suggest that the performance challenges faced by Xiangpiaopiao are due to a combination of external market changes and internal strategic adjustments during its transformation [2] - The competitive landscape in the dairy industry is intensifying, as seen in the performance of companies like Huangshi Group, which reported a revenue decline of 13.07% and a net loss of 5.77 million yuan [4]

Group 1: Xiangpiaopiao's Performance - Xiangpiaopiao reported a revenue of 1.035 billion yuan for the first half of 2025, a year-on-year decline of 12.21%, with a net loss of 97 million yuan, down 230.13% year-on-year [1] - The traditional brewing business generated 423 million yuan, a decrease of 31.04% year-on-year, reflecting challenges in the market [1] - The shift in consumer preferences towards ready-to-drink and freshly made beverages has pressured the brewing business, compounded by an earlier Chinese New Year affecting sales [1][2] Group 2: Ready-to-Drink Business Growth - The ready-to-drink segment achieved revenue of 591 million yuan, marking an 8.03% increase year-on-year, and for the first time, its revenue share surpassed that of the brewing business, reaching 58.27% [2][6] - The ready-to-drink business has shown consistent growth over the past three years, with revenues of 638 million, 901 million, and 973 million yuan from 2022 to 2024 [2] Group 3: New Product Launches and Marketing Strategies - Xiangpiaopiao introduced new flavors such as "Conglan Yulu" and "Xinhui Chenpi Moonlight White," but these products are still in the market exploration phase and have not yet significantly impacted overall performance [1] - The Meco fruit tea brand, which is part of Xiangpiaopiao's ready-to-drink offerings, has seen a revenue increase of 20.69% in 2024, contributing significantly to the company's growth [6][7] Group 4: Industry Context and Competitive Landscape - Analysts suggest that the performance challenges faced by Xiangpiaopiao are due to a combination of external market changes and internal strategic adjustments during its transformation [2] - The competitive landscape in the beverage industry is intensifying, with companies needing to leverage fan economy and high-quality ingredients to maintain market presence [7] Group 5: Other Companies' Performance - Junyao Health is collaborating with a well-known ready-to-drink coffee brand to expand its probiotic applications, indicating a trend towards diversification in the beverage sector [3] - Huangshi Group reported a total revenue of 905 million yuan for the first half of 2025, down 13.07% year-on-year, with a net loss of 5.77 million yuan, attributed to increased competition and cost pressures [4] - Jiahua Food achieved a revenue of 1.185 billion yuan, a 10.43% increase, but its net profit fell by 82.1% due to rising raw material costs and increased marketing expenses [8]

Core Viewpoint - The company is experiencing significant challenges in its brewing business, leading to a decline in overall revenue and profitability, while the ready-to-drink segment shows some growth potential through new product launches [1][2][3][4]. Financial Performance - In the first half of 2025 (25H1), the company's revenue, net profit attributable to shareholders, and net profit excluding non-recurring items were 1.04 billion, -100 million, and -110 million yuan, respectively, representing a year-on-year decline of 12.2% and increased losses [1]. - For the second quarter of 2025 (25Q2), revenue, net profit attributable to shareholders, and net profit excluding non-recurring items were 460 million, -80 million, and -90 million yuan, showing a slight revenue increase of 0.2% but continued losses [1]. - The brewing segment generated 420 million yuan in revenue, down 31.0% year-on-year, while the ready-to-drink segment saw an 8.0% increase to 590 million yuan [2]. Business Segments - The brewing segment faced significant pressure due to external factors, impacting sales during the peak season, while the ready-to-drink segment performed well during the off-peak season with new product launches like "Xinhui Chenpi Moonlight White Light Milk Tea" expected to contribute to revenue growth [1][2]. - In 25H1, the company maintained a dual-driven strategy focusing on both brewing and ready-to-drink segments, with the latter showing resilience and growth potential [1][3]. Cost and Profitability - The gross margin for 25H1 decreased by 1.2 percentage points to 29.4%, primarily due to the underperformance of the higher-margin brewing segment [3]. - The net profit margin for 25H1 was -9.4%, a decline of 6.9 percentage points year-on-year, indicating a significant impact on profitability from the brewing business [3]. Future Outlook and Valuation - Revenue forecasts for 2025-2027 have been revised down to 3.11 billion, 3.28 billion, and 3.42 billion yuan, reflecting a decrease of 9% to 8% compared to previous estimates [4]. - The expected earnings per share (EPS) for 2025-2027 are projected at 0.39, 0.57, and 0.64 yuan, with a significant downward adjustment of 40% to 18% from prior estimates [4]. - The company aims to stabilize its brewing business and expects a return to profitability by 2026, with a target price set at 15.39 yuan based on a 27x price-to-earnings ratio for that year [4].

Core Viewpoint - The company reported a decline in overall revenue for the first half of 2025, but the ready-to-drink segment showed positive growth, indicating a shift in consumer preferences and successful product innovation [1][2]. Group 1: Financial Performance - The company achieved a revenue of 1.035 billion yuan in the first half of 2025, a year-on-year decrease of 12.21% [1]. - The ready-to-drink business generated revenue of 591 million yuan, marking an 8.03% increase year-on-year, and accounted for 58.27% of total revenue, surpassing the traditional brewing segment for the first time [1][2]. - The overall performance in the second quarter showed a slight increase in revenue compared to the previous year, although the first quarter's performance negatively impacted the half-year results [1]. Group 2: Product Innovation and Strategy - The company launched two seasonal flavors, "Orange Jasmine" and "Mulberry Jasmine," under the Meco fruit tea brand, which received positive feedback from young consumers [2]. - New health-oriented products were introduced, including a composite fruit and vegetable juice and a grapefruit kale tea, targeting the health-conscious young demographic [2]. - The brewing segment introduced new flavors and maintained a health-focused standard with "0 trans fatty acids, 0 plant-based cream, and 0 artificial flavors" [2]. Group 3: Future Outlook - The company plans to continue its strategy of "stabilizing brewing and strengthening ready-to-drink" in the second half of the year, building on the effective measures from the first half [3]. - New flavors and functional health products will be trialed in the brewing segment, while the ready-to-drink segment will explore new cup-based products [3]. - The synergistic effect of the "dual-wheel drive" strategy is expected to enhance overall performance, with anticipated improvements in both segments as the consumption environment stabilizes [3].

Investment Rating - The investment rating for the company is maintained at "Accumulate" with a target price of RMB 15.39 [6][7]. Core Views - The company's revenue and net profit for the first half of 2025 showed a decline, with revenue at RMB 10.4 million, down 12.2% year-on-year, and a net loss of RMB 1.0 million [1][3]. - The company is facing pressure in its brewing business, while the ready-to-drink segment has shown positive growth during the peak season [2][4]. - The company is focusing on long-term strategies, emphasizing channel stability and rapid new product development to adapt to health and youth trends [1][2]. Revenue and Profitability - In the first half of 2025, the brewing segment generated revenue of RMB 4.2 million, down 31.0% year-on-year, while the ready-to-drink segment saw revenue of RMB 5.9 million, up 8.0% [2][3]. - The gross profit margin decreased by 1.2 percentage points to 29.4% in the first half of 2025, with a net profit margin of -9.4% [1][3]. - The company has adjusted its revenue forecasts for 2025-2027, now expecting revenues of RMB 31.1 billion, RMB 32.8 billion, and RMB 34.2 billion respectively, reflecting a downward revision of 9% for 2025 [4][10]. Cost and Expense Management - The sales and management expense ratios increased to 32.0% and 9.7% respectively in the first half of 2025, indicating a rise in operational costs [3][4]. - The company is expected to optimize its promotional spending structure and improve cost efficiency as inventory levels have normalized [3][4]. Earnings Forecast - The earnings per share (EPS) estimates for 2025, 2026, and 2027 are projected at RMB 0.39, RMB 0.57, and RMB 0.64 respectively, with a significant downward adjustment of 40% for 2025 [4][10]. - The company anticipates a return to profitability in 2026, with the valuation based on a price-to-earnings (PE) ratio of 27x for that year [4][10].