HTSC·2026-03-24 02:50Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 15.03 [6]. Core Insights - The company is expected to achieve revenue of RMB 79.07 billion, net profit attributable to shareholders of RMB 4.50 billion, and adjusted net profit of RMB 4.25 billion for the year 2025, reflecting a year-on-year change of -2.0%, +20.5%, and +14.1% respectively [1]. - In the second half of 2025, the company reported revenue of RMB 38.80 billion, net profit of RMB 2.23 billion, and adjusted net profit of RMB 2.13 billion, with year-on-year changes of -1.7%, +20.6%, and +16.3% respectively, indicating that revenue met expectations [1]. - The beverage and instant noodle segments faced revenue declines of -2.9% and -0.5% year-on-year, respectively, while the second half of 2025 showed a recovery in instant noodle revenue with a year-on-year increase of +1.5% [1][2]. - The company’s EBIT margin improved by 1.2 percentage points year-on-year, driven by controlled costs and effective promotional strategies [3]. Revenue and Profitability - The beverage segment's revenue for 2025 decreased by 2.9% to RMB 50.10 billion, while the instant noodle segment's revenue decreased by 0.5% to RMB 28.28 billion [2]. - The gross margin for 2025 increased by 1.7 percentage points to 34.8%, with the beverage and instant noodle segments achieving gross margins of 37.5% and 29.7%, respectively [3]. - The company’s net profit margin for 2025 increased by 1.2 percentage points to 5.7%, with an EBIT margin of 8.8% [3]. Future Outlook - The company anticipates that rising oil prices will negatively impact the costs of PET and palm oil in 2026, but aims to maintain profit margins through improved operational efficiency [3][4]. - The forecasted net profit for 2026 and 2027 is RMB 4.28 billion and RMB 4.63 billion, respectively, with an estimated EPS of RMB 0.76 and RMB 0.82 [4][9]. - The report suggests that the dividend payout ratio may remain at 100% for the next 2-3 years, considering the peak in capital expenditures has passed [1].