Core Viewpoint - The company reported stable revenue and slight profit growth in the first half of 2025, driven by strong performance in third-party B-end and overseas markets, despite challenges in related party sales [1][2]. Revenue Performance - The company achieved a main revenue of 2.927 billion yuan in H1 2025, remaining flat year-on-year, and a net profit attributable to shareholders of 310 million yuan, up 0.4% year-on-year [1]. - Third-party revenue reached 2.064 billion yuan, marking a 6.5% increase year-on-year [1]. - Breakdown by product category shows: - Third-party hot pot condiments revenue of 925 million yuan, up 7.5% (volume +13.3%, price -5.1%, gross margin -2.9pct) [1]. - Chinese mixed condiments revenue of 451 million yuan, up 4.8% (volume +10.6%, price -5.3%, gross margin -0.1pct) [1]. - Instant food revenue of 645 million yuan, up 3.5% (volume +15.1%, price -10.1%, gross margin -0.9pct) [1]. Product and Channel Insights - Key product growth includes: - Beef oil hot pot base increased by 20.5% to 226 million yuan [1]. - Dipping sauce grew by 12.6% to 186 million yuan [1]. - Fish seasoning rose by 15.1% to 59 million yuan [1]. - Revenue by channel in H1 2025: - Third-party distributors: 1.727 billion yuan, up 2.1% [1]. - E-commerce: 176 million yuan, up 0.4% [1]. - B-end customers: 156 million yuan, up 131.8% [1]. Regional Performance - Revenue by region in H1 2025: - North China: 1.199 billion yuan, down 2.8% [2]. - South China: 1.463 billion yuan, down 2.2% [2]. - Overseas: 266 million yuan, up 34.4% [2]. Related Party Performance - Revenue from related parties was 864 million yuan, down 12.7% year-on-year, with hot pot condiment revenue declining by 14.6% [2]. Cost and Profitability - The company's gross margin decreased by 0.5 percentage points to 29.5% [3]. - Selling expense ratio increased by 0.6 percentage points to 12.6% due to rising freight costs [3]. - Management expense ratio also rose by 0.6 percentage points to 5.3% due to increased personnel and office costs [3]. - Net profit margin remained stable at 10.6% year-on-year [3]. Profit Forecast - The company is adjusting its revenue forecasts for 2025-2027 to 6.879 billion, 7.428 billion, and 8.029 billion yuan, reflecting a growth of 5%, 8%, and 8% respectively [4]. - Net profit forecasts for the same period are adjusted to 818 million, 911 million, and 1.026 billion yuan, with growth rates of 11% for each year [4]. - Earnings per share (EPS) are projected at 0.79, 0.88, and 0.99 yuan, with corresponding price-to-earnings (PE) ratios of 17.1, 15.3, and 13.6 times [4].

Investment Rating - The report maintains a "Buy" rating for the company [7][5] Core Views - The company reported a stable performance in 1H25 with revenue of 2.927 billion RMB, a year-on-year increase of 0.02%, and a net profit attributable to shareholders of 309 million RMB, up 0.39% year-on-year, resulting in a net profit margin of 10.6% [2] - The company is focusing on enhancing its product development capabilities and expanding its B-end and overseas markets, with a significant increase in third-party business revenue [4][2] - The company is expected to benefit from improved supply chain management and a growing share in the B-end market, which is anticipated to drive future revenue growth [4][5] Summary by Sections Financial Performance - In 1H25, the company declared a dividend of 0.3107 HKD per share, corresponding to a payout ratio of 95% [2] - Third-party business revenue reached 2.064 billion RMB, a year-on-year increase of 6.5%, accounting for 70.5% of total revenue [2] - The company’s gross profit margins for various product categories showed slight declines, with hot pot seasoning at 31.2%, compound seasoning at 33.6%, and convenient fast food at 24.0% [3] Product Development and Market Expansion - The company has established a factory in Southeast Asia, which is expected to gradually release production capacity, enhancing its overseas B-end market share [4] - The sales revenue from third-party B-end products grew by 131.7% year-on-year, indicating strong demand and market potential [4] Profitability Forecast and Valuation - The company’s net profit forecasts for 2025-2027 have been adjusted downwards by 8%, 9%, and 11% to 783 million, 860 million, and 959 million RMB respectively, with corresponding EPS of 0.76, 0.83, and 0.92 RMB [5] - The target price has been adjusted to 18.17 HKD, reflecting a 22x PE valuation for 2025 [5][8]

Core Viewpoint - The company reported stable revenue and net profit for the six months ending June 30, 2025, indicating resilience in its financial performance despite market challenges [1]. Financial Performance - Revenue for the six months was 2.927 billion RMB, maintaining stability year-on-year [1]. - Net profit attributable to shareholders was 309.5 million RMB, slightly up from 308 million RMB in the same period last year, also showing stability [1]. Product Development and Sales Strategy - The company focuses on product development driven by market demand, utilizing multi-dimensional analysis of regional consumer characteristics and competitive market performance [1]. - Continuous improvement in product quality and optimization of R&D efficiency are emphasized to enhance overall R&D capabilities [1]. Product Performance Highlights - In the hot pot seasoning category, the beef tallow hot pot base and dipping sauce showed significant growth, with revenues of 225.5 million RMB (up 20.5%) and 186 million RMB (up 12.6%) respectively [1]. - In the compound seasoning category, fish seasoning and the 24-dish series also performed well, with revenues of 59 million RMB (up 15.1%) and 32 million RMB (up 17.5%) respectively [1]. - The home-cooked series in the convenience food segment saw a substantial increase in sales from 7.9 million RMB to 37.4 million RMB [1].

Group 1 - The core revenue for the first half of 2025 is RMB 2.9274 billion, showing stability compared to RMB 2.9269 billion in the same period last year [1] - Gross profit decreased by 1.4% to RMB 865 million [1] - Net profit attributable to shareholders remained stable at RMB 309.5 million, compared to RMB 308.3 million in the previous year [1] - Basic earnings per share remained stable at RMB 0.319 [1] - The company plans to declare an interim dividend of HKD 0.3107 per share, equivalent to RMB 0.2836 [1] Group 2 - The group achieved revenue of RMB 2.0637 billion in third-party business, representing a year-on-year growth of 6.5% [2] - The growth is attributed to improved product development mechanisms and refined channel management, along with an optimized supply chain supporting B-end and overseas business expansion [2] - In product development, the company focuses on meeting market demand, with sales teams analyzing regional consumption characteristics and competitor performance [2] - The company emphasizes continuous improvement in product quality and R&D efficiency, enhancing overall R&D capabilities [2] - Notable performance in various product categories includes: - Beef hot pot base revenue of RMB 225.5 million, up 20.5% [2] - Dipping sauce revenue of RMB 185.9 million, up 12.6% [2] - Fish seasoning revenue of RMB 58.8 million, up 15.1% [2] - 24 dishes series revenue of RMB 31.7 million, up 17.5% [2] - Home-cooked series revenue increased from RMB 7.9 million to RMB 37.4 million [2]

Core Insights - The company reported a revenue of 2.927 billion RMB for the six months ending June 30, 2025, representing a year-on-year increase of 0.02% [1] - The profit attributable to the company's owners was 309 million RMB, an increase of 0.39% year-on-year, with basic earnings per share at 31.9 cents [1] Revenue Breakdown - Revenue from hot pot seasoning products decreased by 3.7% to 1.683 billion RMB, accounting for 57.5% of total revenue. Sales to related parties dropped by 14.6% due to reduced sales volume, while sales to third parties increased by 7.5% due to new product launches [1] - Revenue from compound seasonings increased by 8.2% to 492 million RMB, making up 16.8% of total revenue. Sales to related parties surged by 69.8% driven by demand for new products, while sales to third parties grew by 4.7% due to increased demand from B-end customers [1] Instant Food Products - Revenue from instant food products rose by 1.2% to 709 million RMB, representing 24.2% of total revenue. Sales to related parties decreased by 17.0% due to reduced demand for marinated foods, while sales to third parties increased by 3.5% due to the introduction of new home-cooking products [2]

Summary of Key Points Core Viewpoint The report from the Jixian County Market Supervision Administration highlights the results of the fourth round of food safety inspections in 2025, indicating a high compliance rate for ordinary food products and a notable number of non-compliant agricultural products. Group 1: Inspection Results - A total of 213 batches of ordinary food were tested, with all 213 batches passing the inspection [2] - For agricultural products, 45 batches were tested, of which 42 passed and 3 were found to be non-compliant [2] Group 2: Non-compliant Products - The non-compliant agricultural products included: - Bananas from He Sheng Trading Company, with a pesticide residue of 0.086 mg/kg, exceeding the standard limit of 0.02 mg/kg [3] - Ginger from a local market, with a pesticide residue of 0.60 mg/kg, also above the acceptable limit of 0.2 mg/kg [3] - Another batch of bananas from a different vendor, showing a residue of 0.10 mg/kg, again exceeding the standard [3] Group 3: Compliance Standards - The inspections were conducted in accordance with the GB 2763-2021 national food safety standards, which set maximum residue limits for pesticides in food products [3][4] - The report emphasizes the importance of adhering to these standards to ensure food safety for consumers [2][3]

Core Insights - The company reported a net profit attributable to shareholders of approximately RMB 739 million for 2024, a decrease of 13.28% year-on-year [1] - Revenue reached approximately RMB 6.54 billion, reflecting a year-on-year increase of 6.4% [1] - Gross profit was around RMB 2.046 billion, which is a 5.4% increase compared to the previous year [1] Revenue Breakdown - The group achieved revenue of RMB 4.566 billion from third-party businesses, marking a year-on-year growth of 10.4%, driven by refined channel management and improved product development mechanisms [1] - In the hot pot base category, the beef tallow hot pot base generated RMB 584 million in revenue, up 12.1%, while the tomato hot pot base reached RMB 424.3 million, increasing by 8.6% [2] - The compound seasoning category saw the crawfish seasoning perform exceptionally well, with revenue of RMB 222.8 million, a growth of 31.5% [2] - Instant food products, particularly the spicy sour noodles, were popular among consumers, generating RMB 135.6 million in revenue, a significant increase of 56.7% [2] Channel Management - The company emphasizes refined and standardized management strategies in channel construction, adapting to market changes through in-depth market research and regional layout [3] - E-commerce channels achieved revenue of RMB 398.7 million, reflecting a year-on-year growth of 30.9% [3] - The company implements differentiated management based on channel and regional characteristics, optimizing the "partner" assessment system with an incentive mechanism focused on "incremental" growth [3]