Core Viewpoint - Babai Food (605338), known as the "first stock of steamed buns," reported a net profit growth of 18.08% year-on-year for the first half of 2025, showcasing resilience amid increasing competition in the restaurant industry [1] Financial Performance - The company's net profit increased by 18.08% compared to the previous year, indicating a positive trend in financial performance despite industry challenges [1] - The stock price of Babai Food has shown a significant recovery, rising from a low of 11.63 yuan in August 2024 to a high of 24.80 yuan by September 2, 2025, effectively doubling from its lowest point [1] Stock Activity - Following the announcement of the positive financial results, the stock price of Babai Food has been on a steady upward trajectory [1] - There was a notable divergence in stock activity, with board members and executives increasing their holdings while the employee stock ownership platform opted to reduce its holdings [1] - The company explained that employees had held their shares for 8 to 10 years prior to the IPO and had personal financial needs, which influenced their decision to sell [1]

Investment Rating - The investment rating for the company is "Outperform" (maintained) [1] Core Views - The company's performance in the first half of 2025 slightly exceeded expectations, with revenue of 203 million yuan, a year-on-year increase of 18.7%, and a net profit attributable to shareholders of 37.3 million yuan, up 34.8% year-on-year [6] - The bottoming out logic of the company is clear, supported by a recovery in both domestic and international sales, with high-value-added products increasing their share [4][6] Financial Data and Profit Forecast - Total revenue forecast for 2025 is 404 million yuan, with a year-on-year growth rate of 19.2% [5] - Net profit attributable to shareholders is expected to reach 63 million yuan in 2025, reflecting a year-on-year growth of 47.4% [5] - Earnings per share are projected to be 0.81 yuan in 2025, with a gross margin of 32.1% [5] - The company is expected to maintain a stable expense ratio, with a decrease in share-based payment expenses and fair value losses from financial products contributing to a reduction in overall costs [6] Business Outlook - The company is set to continue its upward trend in the second half of 2025, with new factory capacity coming online and plans for overseas expansion [6] - The establishment of a wholly-owned subsidiary in Singapore and plans for further subsidiaries in the Netherlands and the United States are aimed at enhancing the company's global market presence [6]

Group 1 - The core viewpoint of the report indicates that the performance of Zhenjiu Lidu has declined more than expected due to deep industry adjustments and macroeconomic uncertainties [3] - Morgan Stanley predicts that the first half of 2025 will be a bottoming phase for Zhenjiu Lidu, with operational pressures likely to persist throughout the second half of this year [3] - The report suggests that Zhenjiu Lidu's performance is expected to gradually improve in the same period this year due to a low base from the previous year [3] Group 2 - Morgan Stanley's "Overweight" rating reflects international capital's recognition of Zhenjiu Lidu's long-term development prospects, sending a positive signal to the market [3] - On August 6, Zhenjiu Lidu's stock price opened lower but surged, reaching a peak increase of 11% during the day, closing at HK$7.38 per share with a trading volume of HK$312 million [6]

Core Insights - The company's performance in 2024 was impacted by high base effects, new store ramp-up, and increased financial expenses, leading to a decline in net profit [1] - In early 2025, store performance was under pressure, but a significant recovery was observed in March [2] - The company has outlined its operational plans for 2025, focusing on expanding its restaurant and hotel businesses while enhancing product competitiveness [4] Financial Performance - In 2024, the company achieved revenue of 2.525 billion yuan, a year-on-year increase of 5.14%, but net profit dropped to 100 million yuan, down 67.09% [1] - For Q1 2025, revenue was 690 million yuan, a slight increase of 0.17%, while net profit fell to 52 million yuan, down 21.36% [2] Business Segmentation - **Restaurant Business**: In 2024, revenue from restaurant and accommodation services was 2.205 billion yuan, up 12.69%, with a gross margin of 18.26%, down 2.49 percentage points [3] - **Food Business**: Revenue reached 311 million yuan, a significant increase of 85.52%, with a gross margin of 25.62%, down 10.07 percentage points due to promotional strategies for franchisees [3] Future Plans - The company plans to open 3-5 new restaurant locations and upgrade 20 existing ones in the Yangtze River Delta region [4] - In the hotel sector, the goal is to open 3-4 new direct-operated stores and enhance the franchise business [4] - The food business aims to expand its franchise network by adding 100-150 new stores [4] Profit Forecast - The company anticipates net profits of 210 million yuan, 330 million yuan, and 450 million yuan for the years 2025, 2026, and 2027, respectively, maintaining a "recommended" rating [4]

Core Viewpoint - Pinwo Foods reported a contradictory performance for 2024, with total revenue declining by 21.98% to 876 million yuan, while net profit attributable to shareholders surged by 109.52% to 6.99 million yuan, ending a streak of seven consecutive quarters of losses [2][5]. Group 1: Financial Performance - The turnaround in profitability for Pinwo Foods was primarily driven by a strong net profit of 12.72 million yuan in the fourth quarter of 2024, although the annual non-recurring net profit was only 1.53 million yuan, indicating weak profitability in core operations [5]. - Revenue from the dairy segment, which accounts for over 75% of total revenue, fell by 24.94% in 2024, significantly contributing to the overall revenue decline [5]. Group 2: Cost Control and Margin Improvement - Cost control was crucial for the recovery of Pinwo Foods' performance, with sales expenses reduced by 51.02% to 87.40 million yuan, and supply chain management optimization led to a gross margin increase of 3.57 percentage points to 17.66% [5]. Group 3: Strategic Challenges and Market Position - The strategic transformation efforts of Pinwo Foods have not yet provided effective support, as the company has increased R&D in cheese products and launched several new items, but struggles to find breakthroughs in a highly competitive market dominated by brands like Miaokelan [5]. - Concerns about internal confidence have arisen due to the second-largest shareholder, Wu Baigeng, reducing his stake by 3%, along with the controlling shareholder's related party, Shanghai Xili, planning to reduce their holdings, leading to a significant drop in stock price and a high price-to-sales ratio of 4.43 times, indicating valuation bubble risks [5]. Group 4: Future Outlook - Looking ahead to 2025, Pinwo Foods needs to navigate the declining trends in both volume and price in the imported dairy sector, balancing cost control with market expansion and addressing the challenges of a single product structure to escape the performance slump [6].

Investment Rating - The investment rating for the company is "Buy" and it is maintained [1] Core Views - The company has passed its performance low point, and a positive trend is expected for 2025. The plant extraction business is showing steady performance, while the cottonseed business has suffered significant losses due to price declines. However, there are signs of recovery in the first quarter of 2025, with a projected increase in net profit [4][6][7] Company Overview - The latest closing price is 12.05 CNY - Total shares outstanding are 4.83 billion, with 3.98 billion in circulation - Total market capitalization is 58 billion CNY, with a circulating market value of 48 billion CNY - The 52-week high and low prices are 12.05 CNY and 7.00 CNY, respectively - The debt-to-asset ratio stands at 65.0% - The price-to-earnings ratio is 66.28 - The largest shareholder is Lu Qingguo [3] Financial Performance - In 2024, the company achieved a revenue of 6.994 billion CNY, a year-on-year increase of 1.79%, while the net profit attributable to shareholders was 94 million CNY, a decline of 80.39%. The decline was primarily due to significant losses in the cottonseed business and reduced sales prices in the plant extraction segment [4][5] - The plant extraction business showed stable volume but declining prices, with key products like chili red and lutein experiencing sales growth but lower average selling prices. The cottonseed business reported a revenue of 3.475 billion CNY, down 2.07% year-on-year, with a loss of 150 million CNY from its core subsidiary [5] - For the first quarter of 2025, the company expects a net profit of 90 million to 120 million CNY, representing a year-on-year increase of 133.21% to 210.95% [6] Earnings Forecast and Valuation - The company is expected to recover from its performance low in 2024, with projected earnings per share (EPS) for 2025, 2026, and 2027 at 0.71 CNY, 0.94 CNY, and 1.10 CNY, respectively. The current stock price corresponds to a price-to-earnings ratio of only 15 times for 2025, indicating a low valuation [7][8]