Core Points - The newly revised Anti-Unfair Competition Law of the People's Republic of China officially took effect on October 15, addressing challenges in the digital economy and providing stronger legal protections for both operators and consumers [1] - The law specifically targets "involution" in the market, prohibiting platform operators from forcing or indirectly compelling sellers to sell products below cost, with regulatory authorities empowered to investigate such practices [1][5] - The law aims to reshape market competition logic, emphasizing value competition based on quality, technology, service, brand, and innovation rather than destructive price wars [5][6] Summary by Sections Legal Framework - The revised Anti-Unfair Competition Law has undergone three amendments to better address the issues arising in the digital economy and to safeguard consumer rights [1] - It establishes a dual defense mechanism of "self-inspection by platforms + regulatory oversight" to ensure compliance with the law [1] Market Dynamics - "Involution" refers to irrational and destructive competition, where market players engage in price wars rather than improving quality or services, leading to negative externalities [3] - Examples of extreme low-price promotions, such as "2,000 mAh for 14.5 yuan," highlight the risks to product safety and public welfare [3][4] Long-term Implications - The law is seen as a necessary measure to combat the systemic damage caused by involution, which can lead to market monopolization and ultimately higher prices and fewer choices for consumers [4][5] - By defining below-cost sales that disrupt market order as illegal, the law provides clear guidelines for market participants and enforcement agencies [5] Economic Development - The legal provisions are intended not only to address current market order issues but also to support the long-term high-quality development of the Chinese economy [6]

Core Viewpoint - Citigroup's report indicates that Anjoy Foods' Q2 revenue grew by 6% year-on-year, meeting expectations, while net profit fell by 23% year-on-year, missing expectations due to rising raw material and manufacturing costs, as well as increased discounting leading to lower gross margins [1] Financial Performance - Q2 revenue increased by 6% year-on-year, aligning with market expectations [1] - Net profit decreased by 23% year-on-year, falling short of expectations [1] - Gross margin was negatively impacted by rising costs and increased discounting [1] Product Performance - Sales of meat, fish paste products, and noodle and rice products declined [1] - Sales of vegetable dishes increased, particularly for crayfish, which saw double-digit growth due to price recovery [1] Dividend Policy - Dividend payout ratio increased to 70% [1] Future Outlook - Citigroup has lowered its net profit forecasts for 2025 to 2027 by 10% to 14% to reflect reduced gross margin expectations [1] - Despite ongoing headwinds in the restaurant industry, Anjoy Foods remains attractive due to its strong product portfolio and channel expansion initiatives [1] - Citigroup maintains a "Buy" rating on Anjoy Foods, with a slight decrease in target price from HKD 75 to HKD 74.8 [1]