Zhi Tong Cai Jing·2025-08-13 02:21Core Viewpoint - CICC has raised its profit forecasts for Master Kong Holdings (00322) for 2025 and 2026 by 3% and 6% to 4.4 billion and 4.9 billion HKD respectively, due to improved gross margins [1] Group 1: Financial Performance - In 1H25, Master Kong reported revenues of 40.1 billion HKD, a year-on-year decrease of 2.7%, while net profit increased by 20.5% to 2.27 billion HKD, with adjusted net profit at 2.11 billion HKD, reflecting a 12% year-on-year increase [1] - The company's gross margin improved by 1.9 percentage points in 1H25, with instant noodles and beverages seeing gross margin increases of 0.7 and 2.5 percentage points respectively [3] - The adjusted net profit margin for 1H25 rose by 0.7 percentage points to 5.3%, indicating stable profit growth [3] Group 2: Segment Performance - The instant noodle segment showed a revenue decline of 2.5% in 1H25, while the beverage segment experienced a 2.6% decrease, impacted by price increases and competitive pressures [2] - New product launches in the instant noodle category, such as tomato and egg noodles, contributed positively to sales, while e-commerce channels remained strong [2] - Beverage sales were affected by price hikes in 1L packaging and intensified competition, with tea and juice categories experiencing significant declines [2] Group 3: Future Outlook - The company expects positive revenue growth for instant noodles in 2H25, with a forecast of low single-digit growth driven by improved product structure [4] - Beverage performance is anticipated to continue facing challenges in 2H25, but the decline is expected to narrow compared to 1H25 [4] - Overall, the company is projected to maintain stable annual revenue and achieve double-digit growth in adjusted net profit [4]