Group 1 - The company announced the resignation of Mr. Zhang Weitong as Executive Director, Chairman of the Board, and Chairman of the Nomination Committee, with Mr. Gao Li appointed as the new Executive Director, Chairman, and Chairman of the Nomination Committee [1] - Mr. Gao Li has extensive experience in various sectors, having joined the China Resources Group in 2007 and worked in multiple subsidiaries, including China Resources Beverage and China Resources Power, with nearly 10 years at China Resources Beverage and serving as CFO from 2012 to 2020 [1] - The company emphasizes a multi-brand and multi-water type development strategy in its packaged water segment, focusing on brands like Yibao and Benyou, while also launching 14 new SKUs in the beverage segment in H1 2025, including tea, juice, and other drinks [1] Group 2 - Short-term performance is expected to be under pressure due to intensified competition in the packaged water and beverage industry, along with proactive channel reform efforts [2] - In the long term, water remains a necessity that can withstand economic cycles, and the company has a clear advantage from years of deep cultivation in the market, with revenue expected to return to growth [2] - The company anticipates an increase in profit margins due to a higher proportion of self-produced products and a decrease in outsourcing, with new management expected to lead the company back to a growth trajectory [2]

Core Viewpoint - The company reported a decline in revenue and net profit for the first half of 2025, primarily due to increased competition and changes in marketing strategies [1][2][3] Group 1: Financial Performance - In H1 2025, the company achieved operating revenue of 6.206 billion yuan, a year-on-year decrease of 18.52% [1] - The net profit attributable to shareholders was 0.805 billion yuan, down 28.63% year-on-year [1] - The gross profit margin for H1 2025 was 46.67%, a decrease of 2.60 percentage points compared to the previous year [2] Group 2: Packaging Water Business - The packaging water business generated revenue of 5.251 billion yuan in H1 2025, a decline of 23.11% year-on-year, accounting for 84.6% of total revenue [1] - Revenue from small, medium, large, and barrel water was 3.194 billion, 1.829 billion, and 0.228 billion yuan, with year-on-year changes of -26.22%, -19.37%, and -1.51% respectively [1] - The decline in packaging water revenue was attributed to reduced sales volume, increased marketing resource investment, and channel optimization adjustments [1] Group 3: Beverage Business - The beverage business reported revenue of 0.955 billion yuan in H1 2025, an increase of 21.29% year-on-year, representing 15.4% of total revenue [2] - The company launched 14 new SKU products, focusing on tea beverages, juice, and other drinks [2] - The sales, management, and R&D expense ratios increased by 2.92, 0.43, and 0.00 percentage points respectively, leading to a net profit margin of 12.97%, down 1.84 percentage points year-on-year [2] Group 4: Shareholder Returns - The board of directors announced an interim dividend of 0.118 yuan per share, payable in Hong Kong dollars at approximately 0.129 yuan per share [2] Group 5: Investment Outlook - Short-term performance is pressured by intensified competition in the packaging water and beverage sectors, while long-term growth potential remains due to the essential nature of water and the company's focus on beverage development [3] - The company expects net profits for 2025-2027 to be 1.33 billion, 1.60 billion, and 1.91 billion yuan, with year-on-year changes of -19.0%, +20.5%, and +19.2% respectively [3]