Core Viewpoint - Goldman Sachs has issued a "Buy" rating for Weilong Delicious (09985) with a 12-month target price of HKD 13.9, based on a 19x expected P/E ratio for 2027 and an 8.6% cost of equity discounting back to 2026. Despite fierce competition in the snack industry, the company is expected to achieve growth due to its first-mover advantage, brand image, and insights into konjac products and market dynamics [1] Group 1 - The company reaffirms its annual guidance with a projected sales growth of 15-20%, gross margin of 46-48%, and net profit margin of 17-20%. The company anticipates higher sales, general, and administrative expense ratios in the second half of the year due to increased online and offline marketing efforts, particularly for konjac and kelp products [1] - In Q3 2025, despite a high base, the company's performance remains robust, with monthly sales of the sesame konjac product reaching RMB 60-70 million in August and September, and seasoning noodle products showing signs of stabilization [2] - Discount stores are the fastest-growing channel, expected to contribute 25-30% of annual sales, with a long-term target of 30-35%. Traditional distributors are the most profitable channel, followed by discount stores, KA channels, and e-commerce [2] Group 2 - The company maintains an optimistic outlook on raw material costs, expecting prices of konjac flour to normalize by 2026-2027 as planting areas expand, despite previous high prices due to supply-demand imbalances [2] - The management has reiterated a sales target of approximately RMB 100 million for the year and is actively seeking partners in other Southeast Asian countries, with progress in product listings at major retailers like 7-11 and Lotus's [3]

Core Viewpoint - Goldman Sachs has issued a "Buy" rating for Weidong Meishi (09985) with a 12-month target price of HKD 13.9, based on a 19x expected P/E ratio for 2027 and an 8.6% cost of equity discounted back to 2026 [1] Group 1: Company Growth Potential - Despite fierce competition in the snack industry, the company is expected to achieve growth due to its first-mover advantage, national coverage, and resources to adapt to increasing competition [1] - Smaller competitors are likely to be more affected by rising costs and price pressures due to their scale disadvantages [1] - The company's strong brand image and insights into konjac products and the market provide potential for multiple enhancements in consumer penetration, channel expansion, SKU, and flavor variety [1] Group 2: Financial Guidance - The company reaffirms its annual guidance with a sales growth of 15-20% year-on-year, a gross margin of 46-48%, and a net profit margin of 17-20% [1] - The company anticipates higher sales, general, and administrative expense ratios in the second half of the year due to increased online and offline marketing activities aimed at supporting konjac and kelp product categories [1] - The long-term goals include maintaining a gross margin above 45% and a net profit margin exceeding 15% [1] Group 3: Sales Trends and Channel Insights - In Q3 2025, despite a high base, the company's performance remains robust, with monthly sales of the konjac sesame product reaching RMB 60-70 million in August and September [2] - Discount stores are the fastest-growing channel, expected to contribute 25-30% of annual sales, with a long-term target of 30-35% [2] - Traditional distributors are the most profitable channel, followed by discount stores, KA channels, and e-commerce [2] Group 4: Raw Material Cost Outlook - Supply-demand imbalance has kept konjac powder prices high, but the company is optimistic that prices will normalize in 2026-2027 as planting areas expand [2] Group 5: International Expansion - The management has reiterated a sales target of approximately RMB 100 million for the year and is actively seeking partners in other Southeast Asian countries [3] - Progress has been made in getting konjac and kelp products listed in major Southeast Asian retailers such as 7-11 and Lotus's [3]

Core Viewpoint - Goldman Sachs initiates coverage of Weilong Delicious (09985) with a "Buy" rating, citing a favorable risk-reward profile after a 30% price correction since April [1] Group 1: Company Overview - Weilong Delicious is a well-known Chinese snack company with a strong national presence in the seasoning noodle and konjac product sectors [1] - The company holds a dominant market position in the konjac food segment, expected to contribute over 60% of sales by 2025, with a current market share of 42% [1] Group 2: Financial Projections - Goldman Sachs forecasts a compound annual growth rate (CAGR) of 13% for Weilong's earnings from 2025 to 2027, compared to 3% for its closest global peer, Calbee [1] - The projected sales and net profit CAGR for Weilong from 2025 to 2027 is estimated at 11% and 13%, respectively [2] Group 3: Market Dynamics - The report acknowledges increasing competition in the konjac product market but highlights several factors supporting Weilong's growth: 1. Smaller competitors are more vulnerable to cost increases and pricing pressures [2] 2. Weilong's first-mover advantage allows it to adapt to competitive pressures due to its national coverage and resources [2] 3. The company's brand image and market insights provide opportunities for consumer penetration, channel expansion, and product variety [2] Group 4: Profitability Outlook - Efforts to optimize automation, increase capacity utilization, and leverage operational efficiencies are expected to enhance Weilong's net profit margin from 18.9% in 2025 to 19.5% in 2027 [2]

Core Viewpoint - Goldman Sachs initiates coverage of Wei Long Delicious (09985) with a buy rating, citing a favorable risk-reward profile after a 30% price correction since April [1] Group 1: Company Overview - Wei Long Delicious is a well-known Chinese snack company with a strong national presence in the seasoning noodle and konjac product sectors [1] - The company holds a dominant market position in the konjac food segment, expected to contribute over 60% of sales by 2025, with a current market share of 42% [1] Group 2: Financial Projections - Goldman Sachs forecasts a compound annual growth rate (CAGR) of 13% for the company's earnings from 2025 to 2027, compared to 3% for its closest global peer, Calbee [1] - The expected CAGR for sales and net profit is projected at 11% and 13%, respectively, for the same period [2] Group 3: Market Dynamics - The report acknowledges increasing competition in the konjac product market but highlights several factors supporting Wei Long's growth: 1. Smaller competitors are more vulnerable to cost increases and pricing pressures due to scale disadvantages [2] 2. Wei Long's first-mover advantage allows it to adapt to competitive pressures through national coverage and resources [2] 3. The company's brand image and market insights provide opportunities for consumer penetration, channel expansion, and product variety [2] Group 4: Profitability Outlook - The company is expected to improve its net profit margin from 18.9% in 2025 to 19.5% in 2027, driven by automation, increased capacity utilization, operational leverage, and favorable raw material costs [2]

Group 1: Monetary Policy and Market Trends - The second quarter monetary policy report emphasizes a focus on domestic demand, with a shift towards supporting technology innovation and consumption [3] - The bond market is expected to remain volatile in the short term due to cautious monetary policy and a relatively active fiscal policy [3][4] Group 2: Company Performance and Industry Insights - Today International's H1 2025 revenue decreased by 14.36% to 1.412 billion yuan, with a net profit decline of 22.53% [6][7] - The company signed new orders worth 2.14 billion yuan, a year-on-year increase of 101.2%, driven by the renewable energy sector [7] - Wei Long's H1 2025 revenue increased by 18.5% to 3.483 billion yuan, with a net profit growth of 18% [10][11] - The company’s gross margin decreased to 47.2% due to rising raw material costs, but internal cost reduction measures helped maintain profitability [13] - Shenhuo Co. reported a 12.1% increase in revenue to 20.43 billion yuan in H1 2025, despite a 16.6% decline in net profit [15][16] - The company’s aluminum production increased by 16.2% to 871,000 tons, benefiting from lower alumina prices [16] - Yanghe Co. experienced a significant revenue drop of 35.32% to 14.796 billion yuan in H1 2025, attributed to industry-wide challenges [19][20] - The company’s sales expenses increased, impacting profitability, with a net profit margin of 18.84% [21] - Dongfang Cable's H1 2025 revenue grew by 9.0% to 4.432 billion yuan, but net profit fell by 26.6% [23][24] - The company has a record high backlog of orders, indicating strong future revenue potential [25] - Weilon Co. announced a stock incentive plan to boost long-term growth, with a target revenue increase of 11%-14% from 2025 to 2027 [28][29] - Haichuang Pharmaceutical's first product, Deuteroenzalutamide, has been commercialized, contributing 13.07 million yuan in revenue in Q2 2025 [32][33]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][12] Core Insights - The company continues to experience high demand for konjac products, while the revenue from flavored noodle products has slightly declined. In H1 2025, the company achieved a revenue of 3.483 billion yuan, representing a year-on-year increase of 18.5%, and a net profit attributable to shareholders of 733 million yuan, also up by 18% [7][8][11] Summary by Sections Recent Performance - In H1 2025, the revenue breakdown was as follows: flavored noodle products at 1.31 billion yuan (down 3.24%), vegetable products at 2.109 billion yuan (up 44.31%), and other products at 64 million yuan (down 48.06%) [8] - The company’s revenue from China and overseas markets was 3.429 billion yuan (up 18.09%) and 53 million yuan (up 54.43%), respectively [8] Financial Metrics - The company proposed an interim dividend of 0.18 yuan per share, totaling 438 million yuan, which accounts for approximately 60% of the net profit [7] - The gross profit margin for H1 2025 was 47.2%, a decrease of 2.6 percentage points year-on-year, primarily due to rising raw material costs [9] Cost Management and Efficiency - The company has effectively reduced management and sales expense ratios, with management expenses at 5.8% and sales expenses at 15.1%, down 2.4 and 1.1 percentage points year-on-year, respectively [9] - The utilization rates for production lines were 80.8% for spicy strips and 77.5% for konjac products, with overall capacity utilization increasing from 66.5% in H1 2024 to 79.0% in H1 2025 [9] Future Projections - The company’s revenue forecasts for 2025 to 2027 are 7.473 billion yuan, 8.751 billion yuan, and 10.110 billion yuan, respectively, with net profits projected at 1.430 billion yuan, 1.737 billion yuan, and 2.035 billion yuan [10][11] - The expected EPS for the same period is 0.59 yuan, 0.71 yuan, and 0.84 yuan, with corresponding P/E ratios of 20, 17, and 14 times [10][11]

Market Strategy - The Shanghai Composite Index has broken through previous highs, indicating potential upward space for A-shares [4][12] - The overall performance of innovative small and medium enterprises is leading, while blue-chip stocks are lagging behind [6][12] Economic Data - In July, the industrial added value of large-scale enterprises in China grew by 6.3% year-on-year, with a monthly growth of 5.7% [7][24] - The total retail sales of consumer goods in July reached 38,780 billion yuan, with a year-on-year growth of 3.7% [24] - The fixed asset investment from January to July increased by 1.6% year-on-year, with private investment declining by 1.5% [24] Industry Dynamics - The widespread application of AI large models has significantly increased computing power demand, leading to a substantial rise in server production [34] - In Q2 2025, smartphone shipments in the Middle East grew by 15% year-on-year, reaching 13.2 million units, driven by consumer demand and economic momentum [35][36] - The high-tech manufacturing industry saw a year-on-year increase of 9.5% in added value from January to July [34] Company Updates - Wei Long Delicious (9985.HK) reported a revenue increase of 18.5% and profit growth of 18.5% in the first half of 2025 [38] - Chongqing Beer (600132.SH) experienced a revenue decline of 0.24% and a profit drop of 4.03% in the first half of 2025 [39] - Huagong Technology (000988.SZ) reported a 124% year-on-year increase in revenue from its connection business, reaching 3.744 billion yuan [41] - Angel Yeast (600298.SH) achieved a revenue growth of 10.10% and a net profit increase of 15.66% in the first half of 2025 [43][45] - Biological Shares (600201.SH) announced that its subsidiary received a new veterinary drug registration certificate, enhancing its market position [46] Regional Economic Dynamics - In Hunan Province, fireworks and firecrackers exports increased by 23.5% in the first seven months of the year, totaling 2.96 billion yuan [51][52]

Investment Rating - The report assigns a rating of "Outperform" for WEILONG Delicious Global Holdings, indicating an expected total return over the next 12-18 months that exceeds the relevant market benchmark [20]. Core Insights - WEILONG Delicious reported a revenue of RMB 3.48 billion for the first half of 2025, reflecting an 18.5% year-on-year increase, with a net profit of RMB 0.74 billion, also up 18.5% year-on-year, maintaining a net profit margin of 21.1% [1][7]. - The vegetable products segment showed remarkable growth, with a 44% year-on-year increase in revenue, driven by innovative product offerings and a strong focus on consumer demand [2][9]. - The offline channel structure has been optimized, with a 66% year-on-year increase in the number of stores, and East China remains a key revenue-generating region [3][10]. Revenue Breakdown - Revenue from seasoned flour products, vegetable products, and bean-based products was RMB 1.31 billion, RMB 2.11 billion, and RMB 0.06 billion respectively, with year-on-year changes of -3.2%, +44.3%, and -48.1% [2][8]. - The contribution of vegetable products to total revenue increased to 60.5%, while seasoned flour products accounted for 37.6% [2][8]. Profitability Analysis - The gross profit reached RMB 1.64 billion, a 12.3% increase year-on-year, but the gross profit margin decreased to 47.2%, down 2.6 percentage points due to rising raw material costs [4][11]. - Despite the decline in gross profit margin, the company managed to stabilize its net profit margin at 21.1% through effective cost management, with administrative expenses decreasing by 17.0% [4][12]. Dividend Policy - The company declared an interim dividend of RMB 0.18 per share, maintaining a high dividend payout ratio of 60% [5][13].

Investment Rating - The report maintains a "Buy" investment rating for the company [1][10]. Core Insights - The company demonstrated strong earnings performance with a total revenue of 3.483 billion yuan in H1 2025, representing a 19% year-on-year increase, and a net profit of 733 million yuan, up 18% year-on-year [5][10]. - The growth in performance is attributed to the company's continuous enhancement of its omnichannel strategy and brand building, along with optimization of its channel structure [5][10]. - The report highlights the company's focus on cost control, which has helped mitigate cost pressures, resulting in a stable net profit margin of 21.05% despite a slight decrease in gross margin [6][10]. Summary by Sections Financial Performance - In H1 2025, the company's gross margin decreased by 3 percentage points to 47.16% due to rising prices of konjac powder affecting the profitability of konjac products [6]. - The sales and management expense ratios decreased by 1 percentage point and 2 percentage points to 15.14% and 5.77%, respectively [6]. Product and Channel Strategy - The revenue from seasoning noodle products declined by 3% to 1.31 billion yuan, while vegetable products saw a 44% increase to 2.109 billion yuan [7]. - The company is focusing on optimizing its product offerings and enhancing channel display quality, with expectations for sales stabilization in the second half of the year [7]. - The offline channel revenue increased by 22% to 3.147 billion yuan, benefiting from the company's omnichannel strategy, while online channel revenue decreased by 4% to 336 million yuan [8]. Earnings Forecast - The report adjusts the earnings per share (EPS) forecasts for 2025-2027 to 0.57, 0.68, and 0.78 yuan, respectively, with corresponding price-to-earnings (PE) ratios of 22, 18, and 16 times [10][12]. - The company is expected to continue benefiting from the high demand in the konjac market, with projections for steady growth in the second half of the year [10].

Core Viewpoint - The company reported strong revenue and profit growth for the first half of 2025, exceeding market expectations, driven by strategic product innovation and channel expansion [4][5]. Product Performance - Revenue from seasoning noodle products decreased by 3.2% to 1.31 billion yuan, while vegetable products surged by 44.3% to 2.11 billion yuan, becoming the largest product category, accounting for 60.5% of total revenue [5]. - The company introduced new products like spicy beef-flavored snacks to expand its product matrix [5]. Channel Performance - Offline revenue grew by 21.5% to 3.147 billion yuan, while online revenue declined by 3.8% to 336 million yuan, attributed to traffic differentiation on online platforms [5]. - As of June 2025, the number of offline distributors decreased by 102 to 1,777 [5]. Regional Performance - Revenue growth by region showed significant increases: East China +22.9%, Central China +14.7%, North China +13.5%, South China +34.6%, Southwest +17.3%, Northwest +18.9%, and overseas markets +54.4% [5]. Financial Metrics - The gross margin for the first half of 2025 was 47.2%, down 2.6 percentage points due to rising raw material costs, but partially offset by improved supply chain efficiency [6]. - The sales expense ratio decreased by 1.1 percentage points to 15.1%, and the management expense ratio fell by 2.4 percentage points to 5.8%, leading to a stable net profit margin of 21.1% [6]. Marketing and Brand Strategy - The company is actively pursuing a multi-channel strategy, including new retail formats like bulk stores and warehouse membership supermarkets, and has seen success in channels like Sam's Club [7]. - Initiatives to engage younger consumers include collaborations with KFC and celebrity endorsements, enhancing brand appeal [7]. Future Outlook - The company plans to continue its multi-category development strategy and strengthen brand marketing, with expectations for sustained rapid growth driven by the "konjac" product line and recovery in spicy snack sales [8]. - Despite short-term pressures from rising raw material prices, the company aims for stable profit growth through supply chain efficiency and cost control [8].