Huaxin Securities·2025-09-17 14:11Investment Rating - The report maintains a "Buy" investment rating for the company [1] Core Views - The company is undergoing a transformation towards high-quality development, resulting in a significant improvement in profitability [1] - The company has optimized its cost structure and improved operational efficiency, leading to a 2 percentage point increase in gross margin to 34.46% in H1 2025 [6] - The company is focusing on product innovation and structural adjustments to enhance gross profit, with a 1 percentage point increase in gross margin for its instant noodle business to 27.81% [7] - The company is expected to continue its high-quality development, with adjusted EPS forecasts for 2025-2027 being 0.76, 0.81, and 0.86 respectively, corresponding to PE ratios of 13, 13, and 12 times [8] Summary by Sections Basic Data - Current stock price is HKD 10.91, with a total market capitalization of HKD 614.9 billion and total shares outstanding of 5,636.5 million [2] Financial Performance - In H1 2025, total revenue was HKD 400.92 billion, a decrease of 3% year-on-year, while net profit attributable to shareholders was HKD 22.71 billion, an increase of 20% year-on-year [5] - The company’s beverage business revenue also decreased by 3% to HKD 263.59 billion, but gross margin improved by 2 percentage points to 37.68% due to favorable raw material costs and improved management efficiency [7] Profitability Forecast - The company is expected to maintain a stable revenue growth trajectory, with projected revenues of HKD 79.91 billion in 2025, a slight decrease of 0.9% year-on-year, and net profit expected to grow by 14.1% to HKD 4.26 billion [11]