Ge Long Hui·2025-08-28 11:20Core Viewpoint - The company has shown strong revenue and profit growth in H1 2025, with a revenue of 256.2 billion and a net profit of 76.2 billion, reflecting year-on-year increases of 15.6% and 22.1% respectively [1] Group 1: Business Performance - The packaging water business achieved a revenue increase of 10.7% year-on-year, reaching 94.4 billion, with a focus on red bottle natural water and reduced subsidies for green bottle purified water [2] - The ready-to-drink tea segment continued to grow, with a revenue increase of 19.7% year-on-year, driven by successful promotional activities [2] - The juice business saw a revenue increase of 21.3% year-on-year, with NFC juice gaining market acceptance [1][2] Group 2: Profitability Metrics - The gross margin improved by 1.5 percentage points to 60.3%, attributed to lower raw material costs and increased production efficiency [3] - The net profit margin increased by 1.6 percentage points to 29.7%, supported by effective cost control and reduced financial expenses [3] - The EBIT profit margins for packaging water, ready-to-drink tea, functional beverages, and juice all showed significant year-on-year improvements [3] Group 3: Future Outlook - The company is expected to continue focusing on the packaging water and no-sugar tea segments, with strategic product launches in functional beverages and juice [3] - The earnings per share (EPS) forecasts for 2025-2027 have been raised, reflecting confidence in the company's growth trajectory [3] - The target price has been adjusted to 56.37 HKD, based on a 38x PE ratio for 2025, indicating a strong market position and valuation premium [3]