Core Viewpoint - Master Kong, once a national brand for the 80s and 90s, is now facing sluggish revenue growth, with a 2.7% year-on-year decline in revenue for the first half of 2025, particularly in its core businesses of instant noodles and beverages [1][2] Revenue and Profit Analysis - In the first half of 2025, Master Kong reported revenue of 40.092 billion yuan, down 2.7% year-on-year, while net profit increased by 20.5% to 2.271 billion yuan [2] - The company’s distribution network has seen a significant reduction, with the number of distributors decreasing by 3,409 to 63,806 and direct retailers down by 1,499 to 219,124 compared to the end of 2024 [2] - The increase in net profit is attributed to a 2.8% rise in gross profit to 13.815 billion yuan and a gain of 211 million yuan from the sale of stakes in two subsidiaries, contributing to a 144% increase in other net income [2] Business Segment Performance - The revenue share of Master Kong's two core businesses in the first half of 2025 was 33.6% for instant noodles and 65.7% for beverages, with the instant noodle segment experiencing a continuous decline [3] - Instant noodle revenue dropped from 29.51 billion yuan in 2020 to 28.414 billion yuan in 2024, with a further decline of 2.5% in the first half of 2025 [3] - The beverage segment, which has become a crucial growth driver, saw its revenue decline by 2.6% to 26.359 billion yuan in the first half of 2025, despite a net profit increase of 19.7% [5][6] Competitive Landscape - The beverage market, particularly in the no-sugar tea segment, has become highly competitive, with Master Kong facing challenges from leading players like Nongfu Spring and Yuanqi Forest [6] - Master Kong's lack of new hit products in recent years has raised concerns about its ability to innovate and compete effectively in the evolving market [6] - The company is responding to consumer demand for health-oriented products by launching herbal drinks, but the new market segment is also attracting strong competition [6]