Investment Rating - The report assigns a "Buy-A/Buy-H" rating for the company [4] Core Views - The report indicates that the company is experiencing marginal improvement and a clear operational turning point [1] - The company achieved a revenue of RMB 16.19 billion in 2025, reflecting a year-on-year growth of 7.0%, while the net profit attributable to shareholders was RMB 1.36 billion, down 8.5% year-on-year [8] - The fourth quarter of 2025 showed significant operational improvement, with revenue reaching RMB 4.82 billion, a year-on-year increase of 19.1% [8] Financial Forecast - Revenue projections for the company are as follows: - 2024A: RMB 15.13 billion - 2025A: RMB 16.19 billion - 2026E: RMB 18.28 billion - 2027E: RMB 20.32 billion - 2028E: RMB 22.38 billion - The expected growth rates are 7.7% for 2024, 7.0% for 2025, 12.9% for 2026, 11.1% for 2027, and 10.2% for 2028 [2] - EBITDA is forecasted to grow from RMB 2.36 billion in 2024 to RMB 3.68 billion in 2028 [2] - The report anticipates net profit attributable to shareholders to increase from RMB 1.49 billion in 2024 to RMB 2.22 billion in 2028, with growth rates of 0.5% in 2024, -8.5% in 2025, 25.5% in 2026, 15.5% in 2027, and 12.5% in 2028 [2] Revenue Breakdown - In Q4 2025, the company reported revenue from various product categories: - Frozen prepared products: RMB 8.45 billion, up 7.8% year-on-year - Dishes: RMB 4.82 billion, up 10.8% year-on-year - Noodles and rice products: RMB 2.40 billion, down 2.6% year-on-year [8] - The company also generated RMB 0.07 billion in revenue from newly acquired bakery products [8] Channel Performance - Revenue growth by channel in 2025: - Distribution: +4.5% - Specialty stores: +18.6% - Supermarkets: +6.4% - New retail and e-commerce: +31.8% [8] - In Q4 2025, the revenue growth rates for these channels were 19.2%, 1.2%, 5.3%, and 50.1% respectively, indicating a significant improvement driven by the distributor base [8] Profitability Metrics - The report notes a decrease in gross margin to 21.6% in 2025, down 1.7 percentage points year-on-year, primarily due to rising raw material costs [8] - The company has begun to implement cost control measures, resulting in a reduction of sales and management expense ratios [8] Valuation - The report suggests a target price of RMB 112.59 per share for A-shares and HKD 93.54 per share for H-shares, based on a 22x PE valuation for 2026 [8]