PresentationLadies and gentlemen, thank you for standing by, and please be advised that today's conference is being recorded. I'd now like to hand the conference over to Quinlan Abel, Assistant Vice President, Investor Relations. Please go ahead.Quinlan AbelAssistant Vice President of Investor Relations Thank you, operator. Good morning, everyone. Joining us on the call today from Runway Growth Finance are David Spreng, Chief Executive Officer; Greg Greifeld, Chief Investment Officer of Runway Growth Capita ...

Investment Rating - The investment rating for the company is "Outperform the Market" [5][3][12] Core Views - The company is gradually recovering after destocking, with the effects of acquisitions becoming evident. In the first half of 2025, total revenue was 1.391 billion yuan, a year-on-year decrease of 5.24%, while net profit attributable to shareholders was 190 million yuan, down 23.01% [1][7] - The second quarter of 2025 saw a significant recovery, with total revenue reaching 749 million yuan, a year-on-year increase of 21.93%, and net profit attributable to shareholders increasing by 62.72% to 115 million yuan [1][7] - The company is benefiting from the integration of new subsidiaries, with online sales showing high growth, particularly in the second quarter, where online revenue increased by 66.7% [2][9] Summary by Sections Financial Performance - In the first half of 2025, the company achieved total revenue of 1.391 billion yuan, a decrease of 5.24% year-on-year, and a net profit of 190 million yuan, down 23.01% [1][7] - The second quarter of 2025 showed a recovery with total revenue of 749 million yuan, up 21.93% year-on-year, and net profit of 115 million yuan, up 62.72% [1][7] Revenue Channels - The company reported offline and online channel revenues of 540 million yuan and 200 million yuan respectively in the second quarter of 2025, with year-on-year increases of 9.5% and 66.7% [2][9] - The core categories, such as hot pot and recipe seasonings, saw revenue increases of 29.0% and 17.8% respectively in the second quarter [1][9] Profitability Improvement - The gross margin for the second quarter of 2025 was 37.0%, an increase of 3.7 percentage points year-on-year, driven by a higher proportion of high-margin products [2][9] - The selling and administrative expense ratios were reduced to 10.0% and 6.0%, respectively, indicating improved efficiency in a competitive environment [2][9] Future Outlook - The company has adjusted its revenue forecasts for 2025-2027, expecting total revenues of 3.654 billion yuan, 3.960 billion yuan, and 4.269 billion yuan, with year-on-year growth rates of 5.1%, 8.4%, and 7.8% respectively [3][12] - The expected net profits for the same period are 680 million yuan, 739 million yuan, and 796 million yuan, with growth rates of 8.8%, 8.7%, and 7.7% [3][12]

Group 1: Investor Relations Activity Overview - The investor relations activity was conducted online on June 16 and June 18, 2025, involving various institutional investors [3][5] - Participating institutions included West Securities, Dongwu Securities, and several well-known funds and investment companies [3][5] Group 2: Acquisition of Tongyihe - The company introduced the acquisition of 51% of Tongyihe Precision Technology Co., Ltd., a recognized player in precision mold manufacturing [5][6] - Tongyihe specializes in precision molds and components, with major clients including global automotive parts companies such as Faurecia and Magna [5][6] Group 3: Competitive Advantages of Tongyihe - Tongyihe holds 20 patents, including 3 invention patents and 17 utility model patents, related to its core business [8] - The company has established long-term relationships with major clients, ensuring stable customer resources [8][9] - Tongyihe has a leading market position in the domestic precision mold industry, particularly in hydraulic precision molds [8][9] Group 4: Synergies from the Acquisition - The acquisition will enable customer resource sharing and market collaboration, expanding the customer base for both companies [10] - Supply chain integration will optimize procurement processes and reduce costs by leveraging the combined purchasing power [10][11] - The transaction aims to enhance technical collaboration, improving the overall metal forming process and service offerings [10][11] Group 5: Business Growth and New Client Development - The company plans to deepen its focus on the suspension business, with ongoing projects and collaborations with various automotive clients [11][12] - New technologies, such as the second and third generation welding ring production lines, are expected to enhance production efficiency and reduce costs [11][12]

Investment Rating - The report maintains a "Strong Buy" rating for the company, expecting it to outperform the benchmark index by over 20% in the next six months [1][13]. Core Insights - The company reported a revenue of 1.71 billion yuan and a net profit of 180 million yuan for 2024, showing a year-on-year revenue decline of 1.8% but a net profit increase of 8.0%. In Q1 2025, the revenue was 360 million yuan, with a significant decline in net profit by 75.0% year-on-year [1][3]. - The company is a leader in the domestic aseptic packaging market, with a market share of approximately 10.5% in the Chinese aseptic packaging sales volume and 13.4% in the liquid milk market. The core customer, Yili, experienced a revenue decline of 8.2% in 2024 [1][7]. - The gross margin improved to 23.8% in 2024, up by 2.1 percentage points year-on-year, while the net profit margin also increased to 10.8% [1][7]. Financial Summary - For 2024, the company achieved total revenue of 1,706 million yuan, with a projected growth of 3.4% in 2025, reaching 1,764 million yuan. The net profit is expected to grow by 14.9% in 2025, reaching 211 million yuan [3][8]. - The earnings per share (EPS) for 2024 is projected at 0.44 yuan, with a price-to-earnings (P/E) ratio of 22. The target price is set at 11.7 yuan, compared to the current price of 9.69 yuan [3][8]. - The company’s total assets are projected to grow from 3.58 billion yuan in 2024 to 4.20 billion yuan by 2027, indicating a steady growth trajectory [8].

Core Viewpoint - The company reported a slight decline in revenue for 2024, but an increase in net profit, indicating a mixed performance amidst market challenges [1][2]. Financial Performance - In 2024, the company achieved revenue of 1.71 billion, net profit of 180 million, and net profit excluding non-recurring items of 160 million, with year-on-year changes of -1.8%, +8.0%, and -4.2% respectively [1]. - For Q1 2025, the company reported revenue of 360 million, net profit of 10 million, and net profit excluding non-recurring items of 10 million, reflecting year-on-year declines of -18.2%, -75.0%, and -74.5% respectively [1]. Market Dynamics - The liquid milk market is contracting, impacting the company's liquid milk packaging revenue, which was 1.67 billion in 2024, down 1.1% year-on-year [2]. - The non-carbonated soft drink packaging revenue fell significantly by 35.4% to 30 million in 2024, compared to a growth of 45.3% in the same period of the previous year [2]. - The total packaging volume for 2024 was 12.08 billion units, a decrease of 1.4% year-on-year, with the company holding a 10.5% share of the Chinese aseptic packaging market and a 13.4% share in the liquid milk packaging segment [2]. Profitability and Cost Management - The company improved its gross margin to 23.8% in 2024, an increase of 2.1 percentage points year-on-year, while the net profit margin reached 10.8%, up 1.0 percentage points [3]. - In Q1 2025, the gross margin was 25.2%, reflecting a year-on-year increase of 2.7 percentage points, although it decreased slightly by 0.2 percentage points from the previous quarter [3]. - The company experienced fluctuations in expense ratios, with selling, administrative, and financial expense ratios reported at 3.5%, 8.1%, and 5.8% respectively for Q1 2025, with significant increases in financial expenses due to acquisition loan interest [3]. Strategic Outlook - The company has become the largest shareholder of Fenmei Packaging, which is expected to enhance synergies in capacity, research and development, and customer relations, potentially increasing market share [2]. - The company anticipates that the core client, Yili, will see a positive revenue trend in Q1 2025, which may further support growth [3].

Investment Rating - The report maintains a "Strong Buy" rating for the company, expecting it to outperform the benchmark index by over 20% in the next six months [7][13]. Core Views - The company reported a revenue of 1.71 billion yuan and a net profit of 180 million yuan for 2024, showing a year-on-year revenue decline of 1.8% but a net profit increase of 8.0%. For Q1 2025, the revenue was 360 million yuan, with a significant decline in net profit by 75.0% year-on-year [1][3]. - The company is positioned as a leader in the domestic aseptic packaging market, with a notable market share of approximately 10.5% in the Chinese aseptic packaging sales volume and 13.4% in the liquid milk market [7][8]. - The gross margin improved to 23.8% in 2024, up by 2.1 percentage points year-on-year, while the net profit margin also increased to 10.8% [7][8]. - The company anticipates synergies from the acquisition of Fenmei Packaging, which is expected to enhance its production capacity, research and development, and customer base [7][8]. Financial Summary - For 2024, the company achieved total revenue of 1,706 million yuan, with projected growth rates of 3.4%, 6.3%, and 7.3% for 2025, 2026, and 2027 respectively [3][8]. - The net profit for 2024 was 184 million yuan, with expected growth rates of 14.9%, 7.1%, and 7.5% for the following years [3][8]. - The earnings per share (EPS) for 2024 is projected at 0.44 yuan, with a price-to-earnings (P/E) ratio of 22 [3][8]. - The target price for the company's stock is set at 11.7 yuan, compared to the current price of 9.69 yuan [3][8].

Core Viewpoint - The company reported Q1 2025 earnings that fell short of expectations, with revenue and net profit declining significantly year-on-year, leading to a slight downward revision of profit forecasts for 2025-2027 [1][2]. Group 1: Financial Performance - Q1 2025 revenue and net profit were 640 million and 70 million yuan, respectively, representing year-on-year declines of 24.8% and 57.5% [1]. - The revenue drop was attributed to early inventory stocking for the Spring Festival, channel inventory clearance, and slightly lower-than-expected demand recovery [1]. - The gross margin for Q1 2025 decreased by 3.3 percentage points year-on-year to 40.7%, while the net profit margin fell by 8.56 percentage points year-on-year [2]. Group 2: Cost and Expense Analysis - The company experienced an increase in expense ratios across sales, management, finance, and R&D, primarily due to a decrease in revenue volume while maintaining stable absolute expense values [2]. - The company is expected to control expenses effectively throughout 2025, particularly by reducing spending in traditional supermarket channels and increasing investment in small B channels [3]. Group 3: Strategic Outlook - The company is focusing on strengthening its position in the C-end channel and has made breakthroughs in e-commerce platforms like Douyin and Xiaohongshu [3]. - The completion of acquisitions such as Shicui and Jiadian Zhiwei is anticipated to enhance the company's channel capabilities and support long-term growth [3]. - The company is actively preparing for seasonal products, such as crayfish seasoning, which is expected to drive revenue recovery in Q2 2025 [1].

Investment Rating - The investment rating for Tianwei Foods is maintained at "Outperform" [1] Core Views - The company's Q1 2025 revenue and net profit were below expectations, with revenue at 640 million and net profit at 70 million, representing year-on-year declines of 24.8% and 57.5% respectively. This was attributed to factors such as early inventory stocking for the Spring Festival, channel inventory clearance, and slightly lower-than-expected demand recovery [2][3] - The gross margin for Q1 2025 decreased by 3.3 percentage points year-on-year to 40.7%, while the net profit margin fell by 8.56 percentage points year-on-year. This decline in profitability was mainly due to changes in product mix and increased expense ratios as a result of lower revenue [3] - The company is focusing on expanding its small B channel and has made acquisitions to enhance its market position. The expectation is that the synergies from these acquisitions will gradually be realized, supporting long-term growth [4] Financial Summary - For the fiscal years 2023 to 2027, the projected revenue growth rates are 17.0%, 10.4%, 10.6%, 14.2%, and 13.9% respectively, with net profit growth rates of 33.7%, 36.8%, 11.3%, 12.0%, and 12.4% [6] - The projected P/E ratios for 2025 to 2027 are 17.8, 15.9, and 14.1 respectively, indicating a decreasing trend in valuation multiples over the forecast period [6][11] - The company’s total assets are expected to grow from 5,274 million in 2023 to 7,943 million in 2027, reflecting a robust growth trajectory [10]

Financial Data and Key Metrics Changes - The company reported a 35% year-over-year increase in volumes to $45 billion, with gross revenue less network fees rising 40% to $369 million [6][24] - Adjusted EBITDA increased 38% to $169 million, with adjusted EBITDA margins at 46%, slightly above the guidance of 45% [7][24] - Adjusted EPS for the quarter was $1.07 per share, reflecting strong performance [8][28] Business Line Data and Key Metrics Changes - Subscription and other revenue grew 77% year-over-year to $93 million, driven by success in SMB, SkyTab, and further penetration in the sports and entertainment vertical [24] - The company is focused on adding new merchants and expanding share of wallet, particularly in the restaurant sector with the introduction of SkyTab Air [9][10] Market Data and Key Metrics Changes - The company is experiencing stable volume trends across all end markets, with a slight deceleration attributed to seasonal factors [6][30] - International expansion is underway, with significant growth in markets like the UK, Ireland, and Germany, signing over 1,000 restaurants monthly [19][75] Company Strategy and Development Direction - The company is raising its full-year 2025 guidance, reflecting confidence in execution and growth drivers [6][29] - The acquisition of Global Blue is expected to unlock $80 million in revenue synergies by 2027, primarily through bundling payment solutions [21][90] - The company aims to replicate its successful U.S. model internationally, focusing on software and payment convergence [18][75] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding consumer spending trends, noting stability despite macroeconomic uncertainties [30][100] - The company has a proven track record of growing payment volumes during economic downturns, indicating resilience [22][30] Other Important Information - The company repurchased approximately 686,000 shares for $63 million in Q1 and continued repurchases in April [27] - Total indebtedness has a weighted average cost of 3.4%, with net leverage at approximately 2.4 times [28] Q&A Session Summary Question: How would you describe the competitive environment in international markets? - Management noted that the international opportunity mirrors the U.S. market evolution, with a lack of convergence among software, hardware, and payment solutions [36][39] Question: Can you touch on what you're seeing in the market more broadly into April? - Management indicated stable trends in same-store sales across various segments, with modest compression in restaurants and hotels [42][46] Question: Where are you on the synergy update from recent acquisitions? - Management highlighted successful cross-sell opportunities from acquisitions like Revel, contributing significantly to the SkyTab development pipeline [50][51] Question: What was organic and inorganic growth in the 40% GR LNF growth in the quarter? - Management stated that organic revenue growth is expected to be north of 20% for the year, with acquisitions providing noise in quarter-to-quarter comparisons [56][57] Question: Can you provide any color on the current revenue split between U.S. and international? - Management indicated that international revenue is still developing, with significant contributions expected from enterprise customers and SMB products [72][73]