Group 1: Industry Overview - Konjac, known as "human cat strips," is becoming a phenomenon in the snack food market, attracting significant attention from various companies [1][5] - The konjac food industry has experienced a compound annual growth rate of 20% over the past decade, with the market size expected to reach 26.9 billion yuan in 2024 [5] - Major snack companies are increasingly entering the konjac segment, including Salted Fish Pouch, Wei Long, and Qiaqia Food, among others [1][6][7] Group 2: Company Performance - Salted Fish Pouch reported a revenue of 29.41 billion yuan in the first half of 2025, a year-on-year increase of 19.58%, with konjac snacks contributing 7.91 billion yuan, up 155.10% [6][7] - Wei Long's revenue reached 34.83 billion yuan in the first half of 2025, growing 18.5%, with konjac products driving a 44.3% increase in the vegetable product segment [5][6] - Qiaqia Food's revenue declined by 5.05% to 27.52 billion yuan in the first half of 2025, despite launching new konjac products [8] Group 3: Market Competition - The competition among snack companies is intensifying, with the number of stores for the "Ming Ming Very Busy" group surpassing 20,000 nationwide [3][10] - Companies are focusing on expanding their presence in snack retail channels, with Salted Fish Pouch emphasizing a strategy shift towards channel dominance [11][12] - Three Squirrels is also exploring opportunities in the konjac segment while investing in community snack stores to enhance competition [8][12][13]

Core Viewpoint - The emergence of konjac as a phenomenon-level snack product is driving significant revenue growth for various snack companies, with notable contributions from brands like Salted Fish Pouch and Wei Long [1][4][5]. Group 1: Company Performance - Salted Fish Pouch's konjac snack brand "Da Mo Wang" generated revenue of 791 million yuan in the first half of 2025, a year-on-year increase of 155.10%, accounting for 26.90% of total revenue [1][6]. - Wei Long's konjac products "Mo Yu Shuang" and "Xiao Mo Nu" significantly boosted its vegetable product segment revenue by 44.3% to 2.109 billion yuan, representing 60.5% of total revenue in the first half of 2025 [5][6]. - The overall revenue for Wei Long reached 3.483 billion yuan, with a net profit of 736 million yuan, both reflecting an 18.5% year-on-year growth [2][5]. Group 2: Market Trends - The konjac food industry has experienced a compound annual growth rate of 20% over the past decade, with a projected market size of 26.9 billion yuan by 2024 [4]. - More than 30 companies, including Qiaqia Food, Three Squirrels, and Liangpinpuzi, are entering the konjac snack market, indicating a competitive landscape [6][8]. Group 3: Channel Expansion - The snack industry is witnessing intense competition in the retail channel, with the Mingming Hen Mang Group surpassing 20,000 stores nationwide, prompting companies to focus on snack retail channels [10][12]. - Salted Fish Pouch has shifted its strategy to prioritize channel development, with over 70% of its revenue coming from distribution channels, including snack retail and community group buying [10][12]. - Qiaqia Food reported a significant increase in revenue from snack retail channels, growing from approximately 5 million yuan in January 2023 to around 45 million yuan in April 2024 [11][12].

Investment Rating - The industry investment rating is maintained as "Add" [5] Core Viewpoints - The snack sector is experiencing differentiated growth, with individual companies showing significant highlights. In H1 2025, the overall revenue of the snack sector was 25.51 billion yuan, a year-on-year decrease of 2.2%. The sector's net profit attributable to shareholders was 1.09 billion yuan, down 40.3% year-on-year, primarily due to cost pressures and the weakening of channel dividends [1][10][12] - In Q2 2025, the snack sector's revenue reached 11.09 billion yuan, a year-on-year increase of 2.2%. However, the net profit attributable to shareholders dropped to 250 million yuan, a decrease of 55.1% year-on-year, indicating increased profit pressure due to cost and expense pressures [2][12] - The report highlights three types of companies that are expected to perform well: those that create core blockbuster products, those that rapidly expand channels, and those that continuously innovate [2][20][22] Summary by Sections Industry Overview - In H1 2025, the snack sector's overall revenue was 25.51 billion yuan, down 2.2% year-on-year. The decline is attributed to the timing of the Spring Festival affecting inventory preparation and a return to normal operating rhythms in Q2 [10][12] - The average gross margin for the snack sector in H1 2025 was 28.3%, a decrease of 2.1 percentage points year-on-year, primarily due to rising costs and changes in channel structure [11][18] Q2 Performance - The snack sector's revenue in Q2 2025 was 11.09 billion yuan, up 2.2% year-on-year, indicating a return to positive growth despite seasonal challenges. However, net profit fell to 250 million yuan, down 55.1% year-on-year, reflecting significant profit pressure [2][12] - The average gross margin in Q2 2025 was 28.4%, down 1.7 percentage points year-on-year, influenced by rising costs and changes in channel structure [13][18] Growth Catalysts - The report emphasizes the importance of product innovation and channel expansion as key growth drivers. Companies that can create blockbuster products and effectively expand their channels are expected to outperform [20][21] - The report identifies specific companies with strong growth potential, including Wei Long, Yan Jin Pu Zi, and You You Food, which are leveraging product demand and channel expansion to drive growth [22] Investment Recommendations - The report suggests focusing on companies that can successfully execute growth strategies along two main lines: product innovation and channel expansion. Key companies highlighted include Wei Long, Yan Jin Pu Zi, You You Food, and Wan Chen Group, which are expected to benefit from favorable market conditions [22]

Core Insights - The core viewpoint of the articles is that Wei Long's revenue structure is shifting, with vegetable products, particularly "Konjac Shuang," becoming the main growth driver, while traditional products like spicy strips are experiencing a decline in popularity [1][7][10]. Revenue Growth - In the first half of 2025, Wei Long achieved total revenue of approximately 3.483 billion yuan, a year-on-year increase of 18.5%, and a net profit of 733 million yuan, also up about 18% [1]. - The vegetable products segment's revenue reached 2.109 billion yuan, growing by 44.35% year-on-year, and accounted for 60.5% of total revenue, surpassing the contribution of other segments for the first time [3][11]. Product Segmentation - Wei Long's product lineup includes three main segments: spicy noodle products (spicy strips), vegetable products (Konjac Shuang, Wind Eating Seaweed), and bean products [2]. - The vegetable products segment has become the largest contributor to the company's performance, with its share exceeding that of spicy noodle products for the first time in 2024 [2]. Marketing and Branding - Wei Long has signed popular young actors as brand ambassadors for its key products, indicating a strategic focus on enhancing brand influence and expanding consumer reach [1]. - The marketing strategy emphasizes the low-calorie aspect of "Konjac Shuang," aligning with health trends, which has significantly contributed to its popularity [3]. Channel Strategy - The growth in revenue is primarily driven by offline channels, which contributed 3.147 billion yuan, a 21.5% increase, accounting for 90.4% of total revenue [5]. - Wei Long is actively expanding into emerging channels, such as snack wholesale stores, to meet consumer demand for quality and price [4]. Competitive Landscape - The spicy strip segment is facing challenges, with a decline in revenue and consumer complaints about taste and price [8][9]. - Competitors like Yan Jin Pu Zi are rapidly gaining market share in the vegetable product category, indicating increasing competition in this segment [10][11]. Management Changes - In 2025, Wei Long experienced significant changes in its executive team, with the CEO and CFO positions being filled by family members of the founding Liu brothers, indicating a strong family influence in management [12][13][15]. - The company is focusing on a multi-category product strategy, aiming to replicate the success of "Konjac Shuang" with new products like "Wind Eating Seaweed" [16][17].

Core Viewpoint - The company reported a strong performance in the first half of 2025, with significant revenue and profit growth despite challenges in certain sales channels [1][2]. Financial Performance - For H1 2025, the company achieved revenue of 2.941 billion yuan, a year-on-year increase of 19.58%, and a net profit attributable to shareholders of 373 million yuan, up 16.7% [1]. - In Q2 2025, revenue reached 1.403 billion yuan, reflecting a year-on-year growth of 13.54%, while net profit was 195 million yuan, an increase of 21.75% [1]. - The company's gross profit margin for Q2 2025 was 30.97%, a decrease of 1.98 percentage points year-on-year, attributed to changes in channel structure [3]. Revenue Breakdown - Revenue from direct supermarkets, distribution, and e-commerce channels for H1 2025 was 0.63 billion, 2.303 billion, and 0.574 billion yuan, showing a year-on-year change of -42%, +30.09%, and -0.97% respectively [2]. - The company’s key revenue driver was the konjac product line, which generated 791 million yuan in revenue, a remarkable increase of 155.1% year-on-year [2]. Cost and Expense Management - The company experienced a reduction in sales, management, and R&D expense ratios, with sales expense ratio down by 2.70 percentage points year-on-year [3]. - The net profit margin for Q2 2025 was 13.79%, an increase of 0.79 percentage points year-on-year, indicating improved profitability [3]. Strategic Initiatives - The company is focusing on high-growth product categories and expanding its distribution channels, including new product launches and overseas market penetration [4]. - The introduction of new flavors and products, such as the "Mowon" brand, aims to enhance market presence and drive revenue growth [4]. Investment Outlook - The company maintains strong growth potential, with adjustments in e-commerce strategies and a focus on high-margin products expected to support long-term profitability [5]. - The earnings forecast for 2025-2027 has been slightly adjusted to 800 million, 990 million, and 1.19 billion yuan, reflecting the impact of e-commerce channel adjustments [5].

Investment Rating - The industry investment rating is "Positive" (maintained) [2] Core Viewpoints - The new consumption concept is prominent, with incremental market and "self-satisfaction" consumption providing growth momentum. The food and beverage index fell by 1.1% from June 2 to June 6, ranking 27th among primary sub-industries, underperforming the CSI 300 by approximately 1.9 percentage points. Sub-industries such as snacks (+4.6%), health products (+1.7%), and meat products (+1.1%) performed relatively well. Companies with new consumption concepts in the food and beverage sector showed good growth, particularly those expanding into new channels, new product categories, or new markets [4][11][12]. Summary by Sections Weekly Viewpoints - The food and beverage index experienced a decline of 1.1%, ranking 27th out of 28 industries, and underperformed the CSI 300 by about 1.9 percentage points. The snack, health product, and meat product sectors showed relative strength [11][12]. Market Performance - The food and beverage sector's index fell by 1.1%, with snacks, health products, and meat products leading in performance. Individual stocks such as Junyao Health, *ST Spring, and Huabao shares saw significant gains, while companies like Kuaijishan, ST Jia Jia, and Lihai Food faced declines [12][16]. Upstream Data - Some upstream raw material prices have decreased. For instance, the price of whole milk powder was $4,173 per ton, down 3.7% month-on-month but up 20% year-on-year. The domestic fresh milk price was 3.1 yuan per kilogram, down 0.3% month-on-month and down 8.4% year-on-year [17][21]. Alcohol Industry News - Kuaijishan's "One Day One Smoke" sparkling yellow wine has begun its招商 (investment promotion). The beer production from large-scale enterprises in China for the first four months of 2025 was 11.44 million kiloliters, a year-on-year decrease of 0.6%. However, April's production showed a year-on-year increase of 4.8%, indicating a recovery trend in the sector [40][41]. Memorandum - Attention is drawn to the shareholder meeting of New Dairy Industry scheduled for June 10, 2025. Four companies will hold shareholder meetings, and two companies will have restricted shares released [42][43]. Recommended Portfolio - The recommended stocks include Shanxi Fenjiu, Guizhou Moutai, and Ximai Food. Shanxi Fenjiu faces short-term demand pressure but has high medium-term growth certainty. Guizhou Moutai is focusing on sustainable development and increasing dividend rates. Ximai Food is experiencing steady growth in its oatmeal business and is rapidly expanding new channels [5][44].

Investment Rating - The industry investment rating is "Positive" (maintained) [2] Core Viewpoints - The new consumption concept is prominent, with incremental market growth and "self-satisfaction consumption" providing growth momentum [4][12] - From June 2 to June 6, the food and beverage index declined by 1.1%, ranking 27th among primary sub-industries, underperforming the CSI 300 by approximately 1.9 percentage points [12][13] - Companies with new consumption concepts in the food and beverage sector showed good performance, particularly in snacks, health products, and meat products [12][13] Summary by Sections Weekly Viewpoints - The food and beverage sector is experiencing a decline, but companies with new consumption concepts are performing well, particularly in snacks and small food companies [12] - The expansion of new channels, new product categories, and new market entries is driving growth in the sector [12] Market Performance - The food and beverage index underperformed the market, with snacks (+4.6%), health products (+1.7%), and meat products (+1.1%) leading the sub-industry performance [13][16] - Individual stocks such as Junyao Health and Huasheng Group showed significant gains, while companies like Kuaijishan and ST Jiayi faced declines [13][17] Upstream Data - Some upstream raw material prices have decreased, with the price of whole milk powder at $4,173 per ton, down 3.7% month-on-month but up 20% year-on-year [18][22] - Domestic fresh milk prices are on a downward trend, currently at 3.1 yuan per kilogram, down 8.4% year-on-year [18][22] Alcohol Industry News - Kuaijishan's "One Day One Smoke" sparkling yellow wine has begun its marketing campaign, indicating a focus on enhancing brand recognition and expanding market reach [41] - The beer production volume for large-scale enterprises in China showed a slight decline of 0.6% year-on-year for the first four months of 2025, but April saw a 4.8% increase [41] Recommended Companies - Recommended companies include Shanxi Fenjiu, Guizhou Moutai, and Ximai Food, with a focus on their growth potential and market strategies [5][45]

Core Viewpoint - The snack sector is expected to experience a slight decline in net profit margin in 2024, with a year-on-year decrease of 0.3 percentage points to 6.6%, primarily due to rising costs and increased expenditure by some companies to support market expansion, leading to short-term profit pressure. However, long-term profitability is expected to improve due to production efficiency and management enhancements, as well as the strengthening of major product advantages [1][2]. Group 1: 2024 and Q1 2025 Operational Review - In 2024, the snack sector is projected to achieve revenue of 54.89 billion yuan, a year-on-year increase of 6.9%, with companies embracing new channels and maintaining strong growth momentum. However, Q1 2025 revenue is expected to decline by 5.3% year-on-year to 14.42 billion yuan, primarily due to the timing of the Spring Festival affecting quarterly performance, particularly for companies with significant gift-giving attributes [1][2]. Group 2: Profitability Analysis - The snack sector is anticipated to achieve a net profit of 3.63 billion yuan in 2024, reflecting a year-on-year growth of 3.1%. However, Q4 2024 and Q1 2025 are expected to see significant declines in net profit, with year-on-year decreases of 15.5% and 33.6%, respectively, due to rising costs and limited scale effects from the Spring Festival [2]. Group 3: Growth Drivers - The growth of the snack industry is increasingly driven by channel transformation, with rapid expansion of discount snack stores and the rise of platforms like Douyin. The retail channel is expected to continue evolving in 2025, with discount formats expanding and supermarkets adjusting their operations to enhance efficiency and product differentiation [3]. Group 4: Investment Recommendations - Companies to focus on include: 1) Salted Fish (002847.SZ): Benefiting from the explosive demand for konjac products and strong brand-building capabilities 2) Wei Long Delicious (09985): Leading company in the konjac category with rapid growth 3) Youyou Food (603697.SH): Actively expanding into new channels with member products 4) Three Squirrels (300783.SZ): Opening up offline market space through distribution and expanding beverage categories 5) Good Idea (002582.SZ): Improvement in core business driven by cost advantages [4]. - Short-term focus on undervalued companies with growth potential includes: Ganyuan Food (002991.SZ), Jinzhai Food (003000.SZ), and Qiaqia Food (002557.SZ) [4].