Core Viewpoint - The company's 1H25 performance met market expectations, with revenue of 7.02 billion yuan, a year-on-year increase of 4.9%, and adjusted net profit of 360 million yuan, up 4.6% year-on-year [1][2]. Revenue Performance - All three business segments recorded positive growth, with milk powder revenue rebounding. Overall revenue increased by 4.9% year-on-year, with ANC revenue up 5% and ANC China revenue up 13.1%, driven by strong performance of Swisse's new product categories and rapid growth in cross-border e-commerce and new retail channels [1]. - ANC Australia and New Zealand revenue decreased by 18.5% due to adjustments in the purchasing agent channel [1]. - BNC revenue increased by 2.9%, with milk powder revenue up 9.6%, while probiotics and infant nutrition products saw declines of 16% and 17.1%, respectively [1]. - PNC revenue grew by 9.6%, with PNC China revenue up 17.5% and North America PNC revenue up 6.4%, driven by Zesty Paws' 12.8% revenue growth, while Solid Gold's revenue fell by 23.3% [1]. Profitability Metrics - EBITDA margin remained healthy, with adjusted net profit margin improving. ANC's adjusted EBITDA margin decreased by 1.1 percentage points to 20.9%, primarily due to increased investment in overseas expansion and a higher proportion of sales through Douyin in China [2]. - BNC's adjusted EBITDA margin fell by 2.6 percentage points to 12.4%, mainly due to costs associated with the new national standard transition and consumer education [2]. - PNC's adjusted EBITDA margin increased by 1.6 percentage points to 12.4%, benefiting from improvements in product and channel mix [2]. - The company completed refinancing in 1H25, with financing costs rising by 34% year-on-year to 580 million yuan, impacting overall profit performance [2]. Future Outlook - The company is expected to achieve high single-digit revenue growth for the full year, with ANC projected to see mid to high single-digit growth [2]. - Milk powder business is anticipated to accelerate to low double-digit growth in the second half of the year, while PNC is expected to continue its growth trend [2]. - The company forecasts continued improvement in internal profit margins and ongoing optimization of financial costs [2]. Earnings Forecast and Valuation - The earnings forecast for 2025 and 2026 has been raised by 5% and 6% to 640 million yuan and 760 million yuan, respectively, due to the recovery in the milk powder business [3]. - The current valuation is set at 14 and 11 times the P/E for 2025 and 2026, respectively, with a target price increase of 23% to 17.7 HKD, corresponding to 16 and 14 times the P/E for 2025 and 2026, indicating a 20% upside potential [3].