Company Performance - In 1H25, the company improved same-store performance and effectively controlled expenses in emerging channels, focusing on efficiency enhancement [1] - The total number of stores decreased by 167 to 2864 compared to 2024, with self-operated stores down by 18 and franchised stores down by 149 [1] - Average same-store revenue increased by 12% for self-operated stores and 14% for franchised stores year-on-year [1] - Other income, mainly from packaged food distribution, grew by 27.5% year-on-year to 0.7 billion [1] - Gross profit margin increased by 3.3 percentage points to 58.6%, attributed to low raw material prices and improved store quality [1] - The net profit margin for 1H25 was 8.8%, up by 6.2 and 3.3 percentage points compared to 1H24 and 2H24, respectively [1] Future Outlook - In 2H25, the company will continue to enhance store quality, optimize products, and refine promotional strategies for emerging channels, expecting sustained growth [1] - The company plans to upgrade store renovations and strengthen professional management and service, enhancing private member operations and deepening partnerships with delivery services and live streaming [1] - The "braised meat +" packaged food segment will continue to expand, with plans to optimize product matrices for various retail channels [1] - The company anticipates further acceleration in the scale of emerging channels from 2H25 to 2026 [1] Profit Forecast and Valuation - The profit expectations for 2025 and 2026 are maintained, with a target price of 3.0 HKD [2] - The current stock price corresponds to a P/E ratio of 24.7 and 22.3 for 2025 and 2026, respectively, while the target price corresponds to approximately 32 and 29 times P/E for the same years [2] - There is an estimated upside potential of about 28.8% from the current price to the target price, maintaining an outperform rating [2]

Core Viewpoint - CICC maintains profit expectations for Zhou Hei Ya (01458) for 2025 and 2026, raising the target price by 20% to HKD 3.0, indicating a potential upside of approximately 13.2% from the current price [1] Group 1: Store Quality and Structure - In 2025, the company will focus on enhancing store quality and optimizing store structure, emphasizing "people, goods, and environment" [2] - The company will enhance membership operations and attract traffic through online channels and in-store competitions among staff [2] - There are no specific targets for the number of stores in 2025, with a focus on improving store quality instead [2] - The store structure adjustment is expected to be completed by 2024, with a net reduction of 504 and 252 stores in commercial and community areas, respectively, while increasing transportation hub stores by 36 [2] - Same-store operations showed a year-on-year increase in Q1 2025 and April-May, indicating steady improvement in overall store performance [2] Group 2: Emerging Channels - The company is making steady progress in emerging channels, with products entering Sam's Club, Pang Donglai, and Yonghui stores [3] - In March 2024, the company's marinated products entered the Sam's Club channel, ranking in the Top 6 of the seasoning and sauce category by sales data [3] - The company has also entered Pang Donglai and some Yonghui stores, accelerating expansion into leading regional supermarkets [3] - Zhou Hei Ya has recently entered the MIX supermarket in Malaysia, laying a solid foundation for future expansion into Southeast Asia and other markets [3]