TINGYI(00322) 长江证券·2024-10-11 06:40Investment Rating - Buy rating for the company [3] Core Views - The company is a dual leader in the instant noodles and soft drink industries, with a continuously optimizing revenue structure [3] - The company has a solid channel foundation and scale advantage, enabling it to take the initiative in product upgrades and pricing [3] - The company is expected to lead a new round of price increases in the industry, improving the competitive landscape and enhancing profitability [4] - The company's profitability is expected to improve, with shareholder returns becoming more prominent [4] Industry Overview Soft Drink Industry - The soft drink industry is driven by high-quality and health-conscious trends, with the bottled water segment leading in market share [33] - The market size of the soft drink industry reached 6435 88 billion yuan in 2023, with a CAGR of 6 68% from 2009 to 2023 [33] - The bottled water segment has seen its market share increase from 21 61% in 2009 to 35 21% in 2023 [33] - The sugar-free tea and carbonated drink segments are growing rapidly, with sugar-free carbonated drinks accounting for 23 04% of the carbonated drink market in 2023 [3] Instant Noodle Industry - The instant noodle industry is entering a phase of stable volume and rising prices, with a CAGR of 8 18% from 2017 to 2022 [58] - The average price of instant noodles increased at a CAGR of 5 87% from 2020 to 2022, driven by product upgrades and consumer demand for higher quality [59] Company Performance - In 2023, the company achieved total revenue of 80 418 billion yuan, with instant noodles and beverages contributing 35 80% and 63 34% respectively [3] - The CAGR for instant noodles and beverage revenues from 2017 to 2023 were 4 10% and 6 58% respectively [3] - The company's gross profit margin for instant noodles and beverages in 2023 were 27 00% and 32 10% respectively [15] Product and Channel Strategy - The company has a strong product portfolio, with container noodles and high-priced bagged noodles accounting for 46 91% and 41 16% of instant noodle sales in 2023 [13] - The company has implemented a channel reform strategy, reducing the size of regions and increasing the number of small distributors to improve product and channel responsiveness [3] - As of the end of 2023, the company had 348 business offices, 303 warehouses, 76,875 distributors, and 217,087 direct retailers [3] Future Outlook - The company is expected to benefit from the industry's upgrade towards healthier and higher-quality products, such as sugar-free tea, sugar-free carbonated drinks, and premium bottled water [3] - The company's leading position in the industry and its ability to replicate past successes are expected to help it capture a significant share of new market trends [3] - The company's EPS for 2024 and 2025 are projected to be 0 64 and 0 73 yuan respectively, with corresponding PE valuations of 18 and 16 times [4]