HTSC·2025-08-27 02:53Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of HKD 56.37 [1][7]. Core Views - The company has shown strong recovery in its leading position, with revenue and net profit for the first half of 2025 reaching CNY 256.2 billion and CNY 76.2 billion, respectively, representing year-on-year increases of 15.6% and 22.1% [5][6]. - The report highlights effective brand maintenance and distribution efforts since the beginning of 2025, leading to improved market share in the packaged water segment and continued growth in the ready-to-drink tea and juice businesses [5][6]. - The company's gross margin increased by 1.5 percentage points to 60.3% in the first half of 2025, driven by lower raw material costs and improved operational efficiency [6]. Summary by Sections Financial Performance - For the first half of 2025, the company's revenue from packaged water increased by 10.7% to CNY 94.4 billion, while the ready-to-drink tea segment saw a revenue increase of 19.7% [5][6]. - The juice business reported a revenue growth of 21.3%, indicating a rising acceptance of NFC juice products in the market [5][6]. Profitability Metrics - The net profit margin improved by 1.6 percentage points to 29.7% in the first half of 2025, supported by effective cost control and a reduction in financial expenses [6]. - The report anticipates continued focus on the packaged water and sugar-free tea segments, with new product launches expected to contribute to revenue growth [6][7]. Earnings Forecast - The earnings per share (EPS) estimates for 2025, 2026, and 2027 are projected at CNY 1.35, CNY 1.52, and CNY 1.69, respectively, reflecting upward revisions of 4%, 5%, and 6% from previous forecasts [7][15]. - The report assigns a price-to-earnings (PE) ratio of 38x for 2025, leading to the target price of HKD 56.37, which is an increase from the previous target of HKD 53.59 [7].