Core Viewpoint - CICC maintains a "outperform" rating for Uni-President China (00220) with a target price of HKD 11.5, reflecting a 24% upside potential based on projected P/E ratios for 2025 and 2026 [1] Financial Performance - For 1H25, the company reported revenue of CNY 17.087 billion, a year-on-year increase of 10.6%, and a net profit attributable to shareholders of CNY 1.287 billion, up 33.2% year-on-year [2] - In Q2 2025, the net profit attributable to shareholders was CNY 685 million, representing a year-on-year growth of 34.6% [2] Beverage and Food Business Performance - The beverage segment showed resilient performance in a competitive environment, with revenue growth of 7.6% year-on-year in 1H25, despite expected single-digit growth in Q2 due to external factors [3] - Tea beverage revenue increased by 9.1% in 1H25, with double-digit growth for products like "Shuang Cui" and "Chun Fu Green Tea" [3] - The food segment also performed well, with revenue growth of 8.8% year-on-year in 1H25, driven by strong sales of "Qie Huang" and "Lao Tan Sauerkraut" [3] - The company's other business revenue surged by 91.8% year-on-year, primarily due to a significant increase in its OEM business, which doubled in size [3] Margin and Cost Management - The gross margin improved by 0.5 percentage points year-on-year in 1H25, with beverage gross margin up by 1.4 percentage points due to cost reductions and enhanced capacity utilization [4] - The net profit margin increased by 1.3 percentage points to 7.5%, supported by effective cost control measures and a decrease in sales expense ratio by 1.2 percentage points [4] Future Outlook - The company anticipates slight pressure on beverage revenue growth in Q3 due to intensified competition, but expects overall revenue to maintain a steady growth trend for the year [5] - Profitability is expected to remain stable in the second half of the year, benefiting from declining raw material prices and improved capacity utilization [5]