YKA(SZ:300999) Di Yi Cai Jing·2025-08-13 13:45Core Viewpoint - The recent interim report from the company shows significant profit growth, but the sustainability of this recovery and its impact on investor confidence and valuation remains uncertain [1][4]. Financial Performance - In the first half of the year, the company achieved revenue of 1156.82 billion, a year-on-year increase of 5.67%, and a net profit of 17.55 billion, up 60.07% year-on-year [2][5]. - The sales gross margin was 6.54%, with the growth primarily driven by increased sales in kitchen foods and feed raw materials [2][3]. - The company's net profit for the first half of 2023 is the highest in the last three years, compared to previous years where net profits were 30.07 billion, 29.7 billion, 19.76 billion, and 9.66 billion respectively [2][5]. Business Segments - The kitchen food segment, which includes essential consumer products like cooking oil, flour, and rice, generated revenue of 715.51 billion, accounting for 61.8% of total revenue, with a gross margin of 7.66% [3]. - The feed raw materials and oil technology segment saw revenue of 431.8 billion, a year-on-year increase of 10.81%, with a gross margin increase from 1.01% to 4.26% [3]. Market Dynamics - Despite the strong interim report, there are concerns about the sustainability of profit recovery due to seasonal demand fluctuations and raw material price volatility [5][6]. - The company noted that the demand for staple foods like flour and rice has recovered but not as expected, and fluctuations in commodity prices continue to pose risks [1][6]. Stock Performance - The company's stock price has declined nearly 80% since its peak in January 2021, with a current price of 31.53, reflecting a year-to-date drop of 2.97% [4]. - Analysts suggest that while the recent performance may open a window for valuation recovery, long-term improvements will depend on consistent quarterly profit realization and business expansion [6].