Zhi Tong Cai Jing·2025-12-26 02:13Core Viewpoint - Haitong International projects that China Wangwang (00151) will achieve revenues of 24.05 billion, 24.65 billion, and 25.27 billion yuan for FY2025-2027, with year-on-year growth rates of 2.3%, 2.5%, and 2.5% respectively. The net profit attributable to the parent company is expected to be 4.17 billion, 4.41 billion, and 4.61 billion yuan, with changes of -3.8%, +5.7%, and +4.6% respectively, corresponding to EPS of 0.35, 0.37, and 0.39 yuan. The company is given a target price of 5.76 HKD based on a 15x PE for FY2025, indicating a 15% upside potential [1][2]. Group 1 - The food and beverage industry has a multi-track layout, with comprehensive marketing enhancing brand strength. China Wangwang has developed into a well-known leader in the food and beverage sector over more than sixty years, covering various segments such as rice snacks, dairy beverages, and leisure foods. The company has a concentrated shareholding structure and stable internal governance, with most executives possessing rich industry experience. Wangwang actively engages in multi-faceted marketing, significantly enhancing brand awareness and becoming a household name [2]. Group 2 - The core business of dairy beverages is steadily expanding, while new products and channels drive the recovery of rice snacks. The dairy beverage category contributes over half of the revenue, with a projected CAGR of approximately 3.7% from FY18-24. The company expects revenue growth for dairy beverages of 0.5%, 2%, and 2% for FY25-27. The rice snack business has seen new products account for a double-digit percentage of revenue in FY25H1, and is expected to recover growth with projected revenue increases of 3.5%, 2%, and 2% for FY25-27. The leisure food segment, particularly candy, is expected to grow at rates of 5%, 4%, and 4% for FY25-27. The company is actively seeking breakthroughs through organizational changes, expanding emerging channels, and focusing on overseas markets, with non-traditional channel revenue increasing from less than 10% to about 35% from 21H1 to 25H1 [3]. Group 3 - Raw material costs are controllable, and operational efficiency is continuously optimized, with profitability expected to rebound after short-term pressure. The company's gross margin is improving due to declining costs, and it plans to address rising imported milk powder prices through domestic alternatives. The company has strengthened control over channel expenses and optimized warehousing and logistics investments. Although the expense ratio may be temporarily pressured due to organizational restructuring in FY24H2, overall EBIT margin is projected to be 23.8%, 23.9%, and 24.1% for FY25-27 [4].