Group 1 - The company expects a net profit decline of 20% to 30% in the first half of 2025 compared to 2024 due to increased marketing investments and product adjustments [1] - The company is strategically increasing marketing resources and adjusting product mix to support long-term development, which is impacting short-term profitability [1] - The company is implementing cost control measures and optimizing operations to mitigate negative impacts on profitability [1] Group 2 - The company is a leader in the purified water industry, focusing on channel cultivation, network expansion, and targeting new channels such as dining and households [2] - The company is developing its second sub-brand, focusing on natural and mineral water, with an expected recovery in packaged water market share [2] - The company aims to enhance its net profit margin through increased self-production and reduced outsourcing costs, benefiting from cost reductions in PET and sugar [2] Group 3 - The board anticipates declaring a mid-term dividend by mid-2025, reflecting a commitment to shareholder returns and a sustainable financial position [2] - The company is expected to face short-term pressure due to intensified competition in the packaged water and beverage sectors, alongside channel reforms [3] - Long-term profit growth is anticipated as the company continues to focus on beverage business development and improves profit margins through increased self-production [3]

Investment Rating - The report downgrades the investment rating to "Accumulate" from "Buy" due to short-term performance pressure [3][6]. Core Views - The company is expected to see a net profit decline of 20% to 30% in the first half of 2025 compared to 2024, primarily due to increased marketing investments and product adjustments aimed at long-term growth [1]. - Despite short-term challenges, the company maintains a strong position in the pure water industry and is focusing on expanding its market presence in the restaurant and household segments [2]. - The company is actively working on enhancing its product portfolio, particularly in the beverage sector, with a focus on high-potential products [2]. - The net profit margin is expected to improve due to a higher proportion of self-produced products and reduced outsourcing costs, alongside cost benefits from raw materials [2]. Summary by Sections Financial Performance - For 2025, the company anticipates a revenue of 12,778 million RMB, a decrease of 5.5% year-on-year, with net profit expected to be 1,299 million RMB, reflecting a decline of 20.6% [5][10]. - The earnings per share (EPS) for 2025 is projected at 0.54 RMB, down from 0.68 RMB in 2024 [5][10]. Market Strategy - The company is focusing on channel refinement and market expansion, particularly in the food and beverage sectors, to drive growth [2][3]. - The introduction of new products under the "Ben You" series is aimed at capturing market share in the natural and mineral water segments [2]. Shareholder Returns - The board is committed to providing sustainable returns to shareholders, with plans to declare interim dividends based on a solid financial position and retained earnings [2].