Ge Long Hui·2025-12-26 13:51Core Viewpoint - The company has established itself as a leading player in the food and beverage industry in China, with a diversified portfolio and strong brand recognition through comprehensive marketing strategies [1]. Group 1: Business Overview - The company has a concentrated shareholding structure and stable internal governance, with most executives possessing extensive industry experience [1]. - The company operates across multiple segments, including rice snacks, dairy beverages, and leisure foods, enhancing its market presence [1]. Group 2: Revenue Growth and Market Dynamics - The dairy beverage segment, which contributes over half of the revenue, is expected to grow at a CAGR of approximately 3.7% from FY18 to FY24, driven by increasing consumer demand for flavors [2]. - The rice snack business is projected to recover growth, with new products accounting for a double-digit percentage of revenue in FY25H1, and expected revenue growth of 3.5%/2%/2% from FY25 to FY27 [2]. - The leisure food segment, particularly candy, is anticipated to see revenue growth of 5%/4%/4% from FY25 to FY27 [2]. - Emerging channels and markets are expected to continue supporting revenue growth, with non-traditional channel revenue share increasing from less than 10% to approximately 35% from 21H1 to 25H1 [2]. Group 3: Cost Management and Profitability - The company is managing raw material costs effectively, with improvements in gross margin expected due to cost reductions and operational efficiency optimization [3]. - The company plans to mitigate rising import milk powder prices through domestic alternatives, while other major raw material costs remain controllable [3]. - Despite short-term pressure on operating profit margins due to organizational restructuring, overall EBIT margin is projected to recover, reaching 23.8%/23.9%/24.1% from FY25 to FY27 [3]. Group 4: Financial Projections and Investment Recommendation - Revenue forecasts for FY2025-2027 are estimated at 240.5 billion, 246.5 billion, and 252.7 billion yuan, with year-on-year growth rates of 2.3%/2.5%/2.5% [3]. - Net profit attributable to shareholders is projected to be 41.7 billion, 44.1 billion, and 46.1 billion yuan for FY2025-2027, with changes of -3.8%/+5.7%/+4.6% [3]. - The company is assigned a target price of 5.76 HKD based on a 15x PE for FY2025, indicating a 15% upside potential [3].