Investment Rating - The investment rating for Yihai International is Neutral, reflecting a weaker earnings outlook primarily driven by third-party sales and price competition [4][15]. Core Insights - Sales momentum for third-party business is expected to slow in the second half of 2025, impacted by negative publicity and competition in the convenience food segment [1][2]. - The company is shifting from a distributor-based model to direct sales with key accounts (KAs) to improve gross profit margin (GPM) and accelerate new product launches [3][10]. - Management anticipates a recovery in to-B sales growth in 2026, driven by overseas expansion and stabilization in domestic sales [2][10]. Financial Performance - Expected share price return is 11.4%, with a target price of HK$14.40 and a dividend yield of 5.8%, leading to a total expected return of 17.2% [4][15]. - The company reported a net profit of Rmb 826 million in 2023, with a projected decline to Rmb 726 million in 2025E, followed by a slight recovery to Rmb 765 million in 2026E [6][9]. - Gross profit margin for to-B is projected at 20-30%, while to-C is nearly 40%, with overall operating profit margins expected to remain stable [13][12]. Market Dynamics - The convenience food segment is currently facing a decline due to intense competition and product retirements, while the to-C business shows stable growth [2][10]. - Overseas business is expected to grow significantly, with management forecasting a 20-30% growth rate annually until at least 2027 [10][12]. - The company is experiencing a shift in sales mix, which may negatively impact third-party GPM due to price competition [15][11].
颐海国际：花旗 2025 年中国会议新看点-销售动能低于预期但利润率趋势向好