Investment Rating - The report initiates coverage with an "Outperform" rating for Yihai International [5][8]. Core Views - Yihai International, rooted in Haidilao, is a leading player in the compound seasoning market, focusing on Chinese compound and convenient food products to drive new growth [3][4]. - The company is enhancing its product matrix and expanding its sales network while reducing reliance on related parties [3][4]. - The third-party revenue share has steadily increased, surpassing related party revenue since 2018, with a CAGR of 22.4% for third-party revenue from 2018 to 2023 [4][6]. - The company has planned capacity expansions both domestically and internationally to support long-term business growth [13][15]. Summary by Sections Company Overview - Yihai International originated as a supplier of hot pot base products for Haidilao and became independent in 2013, listing on the Hong Kong Stock Exchange in 2016 [5][6]. - The company has successfully reduced its dependence on Haidilao, with related party revenue dropping from 78.7% in 2017 to below 50% in 2023 [5][6]. Product Development - The company has optimized its product development organization, with 21 product teams led by 7 innovation committee members focusing on domestic and international markets [3][33]. - As of the end of 2023, Yihai launched 24 new hot pot seasoning products, 37 new Chinese compound seasoning products, and 40 new convenient food products [33][34]. Revenue and Profitability - The company expects revenues of 6.88 billion, 7.50 billion, and 8.07 billion RMB for 2024, 2025, and 2026, respectively, with net profits of 980 million, 1.11 billion, and 1.23 billion RMB [4][5]. - The gross margin improved to 31.6% in 2023, up 1.4 percentage points from the previous year, following a decline in raw material costs [18][19]. Market Trends - The compound seasoning market in China is growing rapidly, with a market size of 178.6 billion RMB in 2022, reflecting a 12.5% year-on-year growth [22][23]. - The penetration rate of compound seasonings in China is still low at 26%, indicating significant growth potential compared to more mature markets like Japan and South Korea [23][24]. Strategic Initiatives - The company is enhancing its sales efficiency through various management mechanisms, including a sales partner system and regional management strategies [9][10]. - Yihai is focusing on the B-end market, particularly with small and medium-sized restaurant chains, which are expanding rapidly [28][38].
产品矩阵加速完善，渠道精耕齐头并进