智通财经网·2025-11-25 06:23Core Viewpoint - China Wangwang (00151) maintains an "outperform" rating with a target price of HKD 5.83, primarily due to strong brand power despite a 7.8% year-on-year decline in net profit for the first half of FY25 [1] Performance Summary - For 1HFY25, the company reported revenue of CNY 11.108 billion, a year-on-year increase of 2.1%, and a net profit of CNY 1.717 billion, down 7.8%, slightly below market expectations due to higher operating expenses [1] Development Trends - The performance of rice snacks and leisure foods outperformed dairy beverages, with revenue growth in 1HFY25 as follows: rice snacks +3.5%, dairy beverages -1.1%, and leisure foods +7.7% [2] - Rice snacks saw single-digit growth in sales, with new product revenue contributing double-digit percentages; dairy beverages faced slight pressure from weak industry demand, with Wangzai milk revenue declining by low single digits, while beverage subcategories grew nearly 40% in revenue and doubled in sales, benefiting from emerging channels [2] - Leisure food new product revenue accounted for nearly 25%, with ice cream revenue growing in double digits; traditional and modern channel sales declined slightly, while overseas markets saw low single-digit growth, and emerging channels experienced rapid growth, with snack wholesale sales continuing to increase [2] Margin and Cost Analysis - The gross margin decreased by 1.1 percentage points year-on-year, primarily due to rising costs of imported bulk powder and palm oil, along with product structure adjustments; gross margins for rice snacks, dairy beverages, and leisure foods changed by +1.3, -2.5, and +1 percentage points respectively [3] - Distribution and administrative expense ratios increased by 1.4 and 0.9 percentage points year-on-year, attributed to increased marketing investments and personnel costs following the establishment of product-specific divisions, leading to a decline in operating and net profit margins by 3.0 and 1.7 percentage points respectively [3] Future Outlook - The company is expected to face sales pressure in Q3 FY25 due to the timing of the Spring Festival; however, revenue is anticipated to maintain steady growth in the second half of the fiscal year, with snack wholesale channels likely to continue rapid growth [4] - Profit margins are expected to stabilize quarter-on-quarter in the second half of the fiscal year, with the company likely to maintain its investment in expenses to support new products and emerging channel performance [4]