TINGYI(HK:00322) Ge Long Hui A P P·2025-07-30 05:31Core Viewpoint - The report indicates that Master Kong's beverage and instant noodle sales experienced mid-single-digit and low-single-digit declines in the first half of the year, respectively [1] Beverage Business - The sales decline of non-carbonated beverages is expected to worsen from mid-single-digit in the second quarter to high-single-digit in recent months [1] - Market share loss is attributed to previous price increases and competition from mid-priced hand-shaken tea drinks, which impact Master Kong's ready-to-drink beverage segment [1] - The rise in market share of sugar-free tea is eroding Master Kong's previously stronghold in the sugary tea market [1] Instant Noodle Business - Despite a sales decline in the first half of the year, Master Kong's market share has gradually stabilized due to brand strength, channel capabilities, and the introduction of high-cost-performance new products in special channels [1] - If the monthly sales decline continues to narrow, there is potential for sales to stabilize or see slight growth in the second half of the year [1] Financial Forecasts - Sales forecasts for 2025 and 2026 have been reduced by 2% and 3%, respectively [1] - However, due to better profit margin performance, the earnings per share (EPS) forecast for 2025 has been increased by 4% [1] - The EPS forecast for 2026 has been lowered by 3% due to concerns over beverage sales, leading to a target price reduction of 3%, from HKD 14.3 to HKD 13.9 [1] Shareholder Returns - Master Kong has a stable record of shareholder returns, offering over 6% yield with a 100% payout ratio, leading to a reaffirmation of the "Buy" rating [1]