Core Viewpoint - The baking industry is experiencing significant performance divergence, with some companies like Tao Li Bread facing substantial profit declines while others like Li Gao Food are showing steady growth [1][4][14]. Group 1: Company Performance - In the first half of the year, the total revenue of nine listed baking companies in A-shares was approximately 11.03 billion yuan, with a net profit attributable to shareholders of about 595 million yuan [1][4]. - Tao Li Bread, known as the "first stock of bread" in A-shares, reported a net profit of approximately 204 million yuan, a year-on-year decline of 29.7% [2][6]. - The revenue of Tao Li Bread was about 2.61 billion yuan, down 13.55% year-on-year, with a net profit excluding non-recurring gains and losses of approximately 194 million yuan, a decline of 30.03% [6][7]. Group 2: Industry Challenges - The baking industry is facing severe challenges, with trends moving towards chain operations, segmentation, and health-oriented products, emphasizing high cost-performance and differentiated competition [3][14]. - The competition is intensifying, with new entrants in the short-shelf-life bread and general baking products market, leading to increased promotional costs and pressure on profit margins [9][18]. Group 3: Regional Performance - Tao Li Bread's revenue declined across all regions except for the Central China region, indicating a widespread downturn in sales performance [7]. Group 4: Cost and Pricing Pressures - Companies are experiencing pressure from rising costs and sensitivity to end prices, making it difficult to raise prices without impacting profit margins [18]. - The operational challenges include decreased foot traffic and average transaction value in direct sales channels, contributing to revenue declines [10]. Group 5: Food Safety Concerns - Food safety has become a recurring theme in the financial reports of baking companies, with several firms, including Tao Li Bread, facing scrutiny and complaints related to product quality [19][20][25].