Core Viewpoint - The company maintains its profit forecast for 2025/2026 and has raised its target price by 40% to HKD 4.9, reflecting a potential upside of 20% based on market valuation adjustments [1] Financial Performance - For 1H25, the company reported revenue of CNY 12.278 billion, a year-on-year increase of 8.3%, and a net profit attributable to shareholders of CNY 578 million, up 2.2% year-on-year, with revenue meeting expectations but profit slightly below due to higher-than-expected expenses [2] Product Performance - The company experienced growth across various beverage categories in 1H25, with total revenue up 8.3% driven by both volume and price increases. Notable performances include: - Soft drinks revenue increased by 9.4% to CNY 9.38 billion, with double-digit growth in sugar-free carbonated products [3] - Juice revenue rose by 0.8% to CNY 1.67 billion, aided by the relaunch of the "Cooler" brand [3] - Packaged water revenue grew by 8.2%, recovering from a contraction in the previous year, with "Ice Dew" leading the recovery [3] - Coffee and other beverages saw a 13.8% increase in revenue to CNY 640 million, with energy drinks growing by 36% [3] Margin Analysis - The gross margin improved by 3.5 percentage points to 38.1% in 1H25, primarily due to price increases. However, the sales expense ratio rose by 3.8 percentage points to 26.3% due to increased investments in freezers and point-of-sale resources, which offset the gross margin improvement. The net profit margin decreased by 0.3 percentage points to 4.7% [4] Strategic Plans - The company plans to maintain high investment levels in the second half of the year to drive growth and is strategically expanding into the food distribution sector, with non-beverage revenue from vending machines nearing CNY 200 million in 1H25. The company aims to enter the health food market while consolidating its strengths in core beverage categories, with specific initiatives expected to be implemented next year [5]

Core Viewpoint - The company maintains its profit forecast for 2025/2026 and has raised its target price by 40% to HKD 4.9, reflecting a potential upside of 20% based on the adjusted P/E ratios [1] Group 1: Financial Performance - The company reported a revenue of RMB 12.278 billion for 1H25, an increase of 8.3% year-on-year, and a net profit attributable to shareholders of RMB 578 million, up 2.2% year-on-year [2] - The revenue growth was driven by both volume and price increases, with sales volume rising by 5.5% and average selling price (ASP) benefiting from product price hikes [3] Group 2: Product Category Performance - In 1H25, the revenue from carbonated drinks increased by 9.4% to RMB 9.38 billion, significantly contributing to overall revenue growth, with sugar-free carbonated products seeing double-digit growth [3] - Juice revenue grew by 0.8% to RMB 1.67 billion, primarily due to the relaunch of the "Cooler" brand [3] - Packaged water revenue increased by 8.2%, recovering from a contraction in the previous year, with "Ice Dew" driving this growth [3] - Coffee and other beverages saw a revenue increase of 13.8% to RMB 640 million, with energy drinks growing by 36%, particularly the core brand "Monster" [3] Group 3: Margin and Cost Analysis - The gross margin improved by 3.5 percentage points to 38.1% in 1H25, mainly due to the benefits of price increases [4] - The sales expense ratio increased by 3.8 percentage points to 26.3%, attributed to higher investments in freezers and expanding point-of-sale resources [4] - The net profit margin decreased by 0.3 percentage points to 4.7% due to the rise in sales expenses offsetting the gross margin improvement [4] Group 4: Strategic Plans - The company plans to continue high investment in the second half of the year to promote growth, having completed efficiency improvements in resource allocation [5] - The company is expanding beyond beverage distribution into food distribution, with non-beverage vending machine business reaching nearly RMB 200 million in 1H25 [5] - Long-term plans include strategically entering the health food sector while consolidating its advantages in core categories like carbonated drinks and juices, aiming for operational efficiency [5]