Summary of Jin Zai Food's Conference Call Company Overview - **Company**: Jin Zai Food - **Industry**: Food Production, specifically focusing on snacks and processed food products Key Points and Arguments Financial Performance - In the first half of 2025, Jin Zai Food reported revenue of **1.124 billion** yuan, a slight decrease of **0.5%** year-on-year, and a net profit of **112 million** yuan, down **21.86%** year-on-year, due to industry demand fluctuations, seasonal shifts, and rising raw material costs [3][4][5] - Direct sales channels grew by over **29%**, and overseas revenue increased by **40%**, indicating strong performance in these areas despite overall revenue challenges [2][3] Product Development and R&D - The company invested **25.8 million** yuan in R&D in the first half of 2025, an increase of approximately **18%** year-on-year, launching new products such as sesame-flavored tripe and various tofu products [2][4] - The company is focusing on health-oriented product upgrades, including a sodium reduction process to meet food safety standards, which has led to some cost increases [10][11][16] Brand Promotion and Marketing - Jin Zai Food increased brand promotion efforts, including sponsorship of popular shows like "New Rap" and other marketing activities, which slightly raised brand expenses [2][5] - The company declared a cash dividend of **1 yuan** per **10 shares**, totaling **44.72 million** yuan, enhancing investor confidence [2][5] Channel Performance - Retail channels showed strong growth, with an increase of over **50%** in the first half of 2025, while international trade markets also grew by **40%** [2][6] - Online channels experienced a slight decline, primarily due to a pullback in community group buying, although shelf e-commerce remained stable [3][6] - The company faced challenges in traditional distribution channels due to competition from snack channels and delays in membership supermarket entry plans [6][8] Strategic Adjustments - Jin Zai Food is adjusting its strategy for konjac products, launching new flavors to enhance consumer feedback and market positioning [7][9][20] - The company is focusing on channel construction and efficiency improvements, with a strategic shift towards existing channel development rather than solely brand upgrades [22][23] Competitive Landscape - The quail egg segment faces intense price competition, particularly from industry giants offering lower-priced products, impacting overall category growth [12][14] - Despite challenges, the company remains optimistic about the long-term potential of quail eggs as a healthy snack option [15][33] Cost Structure and Management - Raw material costs remained stable, with slight increases in manufacturing and transportation costs by approximately **10%** due to scale effects and changes in channel structure [25][26] - The company is optimizing its organizational structure to improve operational efficiency and manage rising employee compensation costs [17][21] Future Outlook - Jin Zai Food anticipates a return to positive sales growth in the second half of 2025, driven by strategic adjustments and channel development [34] - The company is actively exploring the emerging field of instant retail, aiming to capture market share and adapt to changing consumer purchasing habits [30][35] Additional Important Insights - The company is committed to upgrading all products to antibiotic-free versions, which is expected to benefit consumer health without significant cost pressures [18][16] - Jin Zai Food's strategic focus on konjac products is seen as a key area for future growth, with plans to expand market share and improve product offerings [19][20]

Core Insights - Salted Fish Shop (002847) reported its 2025 semi-annual results, showing revenue of 2.941 billion yuan, a year-on-year increase of 19.58%, and a net profit attributable to shareholders of 373 million yuan, up 16.7% [1] - This performance marks the slowest growth in revenue and profit for the company in the past three years, with previous year-on-year growth rates of 56.54% and 90.69% respectively in 2023 and 2024 [1] Revenue Breakdown - The main revenue driver, spicy marinated snacks, contributed 1.32 billion yuan, approximately 45% of total revenue, with a year-on-year growth of 47.05% [1] - The growth in spicy marinated snacks heavily relied on the success of the leisure konjac products, which generated 790 million yuan, a significant increase of 155.1% [1] - Other categories such as dried fruits and jellies generated 428 million yuan, deep-sea snacks 363 million yuan, and egg snacks 309 million yuan, all showing varying degrees of growth, while baked potato products saw a decline of 18.42% to 459 million yuan [3] Channel Performance - The company's strategic focus on channels includes direct KA supermarkets, distribution and emerging channels, and e-commerce, with significant growth disparities [4] - Direct KA supermarket channel revenue fell sharply by 42% to 63 million yuan, accounting for only 2.14% of total revenue [4] - E-commerce contributed 19.54% of revenue with 574 million yuan, a slight decrease of 1%, while distribution and other new channels performed well, generating 2.303 billion yuan, a growth of 30%, making up 78.32% of total revenue [4] International Expansion - The company’s international strategy is beginning to show results, with plans to invest 30 million USD in a new konjac production base in Thailand by 2025, focusing on local flavors and expanding into Southeast Asia, Japan, South Korea, and Europe [4] - Revenue from overseas markets reached 96.35 million yuan, a significant increase from 141,700 yuan in the previous period [4] Profitability and Cost Pressure - Despite a revenue increase of 19.58%, the company's operating costs rose by 24.67% to 2.068 billion yuan, primarily due to a more than 30% increase in the average purchase price of key raw materials [5] - The gross profit margin decreased from 32.53% to 29.66%, marking a continuous decline over five years, reflecting challenges in cost control and pricing strategies [5] - The company managed to reduce selling and administrative expenses by 4.74% and 5.94% respectively, leading to a slight decrease in net profit margin from 13.03% to 12.57% [5] Market Reaction - Following the earnings announcement on August 21, the company's stock opened high but subsequently declined, closing at 72.33 yuan, down 2.2%, with a total market capitalization of 19.7 billion yuan [6]

Core Insights - The company reported revenue of 2.941 billion yuan, a year-on-year increase of 19.58%, and a net profit attributable to shareholders of 373 million yuan, up 16.7% [1] - This represents the slowest growth in revenue and profit metrics for the company in the past three years, indicating a potential slowdown in growth momentum [1] - The company focuses on six major product categories, including spicy snacks, baked potato products, deep-sea snacks, egg snacks, dried fruits and nuts, and konjac jelly pudding [1] Revenue Performance - The main revenue driver, spicy snacks, contributed 1.32 billion yuan, approximately 45% of total revenue, with a year-on-year growth of 47.05% [1] - The growth in spicy snacks heavily relied on konjac products, which generated 790 million yuan, a significant increase of 155.1% [1] - Other categories such as dried fruit jelly, deep-sea snacks, and egg snacks also saw revenue growth, while baked potato products experienced a notable decline, with revenue of 459 million yuan, down 18.42% [2] Channel Strategy - The company's strategic focus is on distribution channels, which include direct sales to key account supermarkets, distribution and emerging channels, and e-commerce [2] - Direct sales to key account supermarkets saw a significant decline, with revenue of 63 million yuan, down 42% year-on-year, accounting for only 2.14% of total revenue [2] - E-commerce contributed 19.54% of revenue, with a slight decrease of 1%, while distribution and other new channels performed well, generating 2.303 billion yuan, a year-on-year increase of 30%, making up 78.32% of total revenue [2] International Expansion - The company's international strategy is beginning to show results, with plans to invest 30 million USD to establish a konjac production base in Thailand by 2025 [2] - The company aims to launch localized konjac products under the Mowon brand, focusing on Southeast Asia and expanding into Japan, South Korea, and Europe and the United States [2] - Revenue from overseas markets reached 96.35 million yuan, a significant increase from 141,700 yuan in the previous period [2] Profitability and Cost Management - The company's operating costs rose by 24.67% to 2.068 billion yuan, driven by a more than 30% increase in the average procurement price of key raw materials [3] - The gross profit margin decreased to 29.66%, down 2.87 percentage points, marking the fifth consecutive year of mid-year decline [5] - Despite rising costs, the company managed to reduce selling and administrative expenses, leading to a slight decrease in net profit margin from 13.03% to 12.57% [5] Market Reaction - Following the earnings announcement, the company's stock opened higher but later declined, closing at 72.33 yuan, down 2.2%, with a total market capitalization of 19.7 billion yuan [5]

Core Insights - The company reported a total revenue of 3.48 billion yuan for the first half of 2025, representing a year-on-year increase of 18.5% [1] - The net profit attributable to shareholders reached 740 million yuan, also reflecting a year-on-year growth of 18.5% [1] - A mid-term dividend of 0.18 yuan per share was announced, with a payout ratio of approximately 60% [1] Revenue Breakdown - Vegetable products continued to show high growth, while online channel revenue experienced a slight decline [1] - Revenue from noodle products decreased by 3.2% year-on-year, primarily due to the company's proactive SKU adjustments and intensified competition in the noodle product sector [1] - Revenue from vegetable products surged by 44.3% year-on-year, driven by enhanced market penetration, optimized terminal displays, and the introduction of new products [1] - Revenue from bean products and others plummeted by 48.1% due to the company's decision to withdraw certain products from the market [1] - Offline channel revenue increased by 21.5% year-on-year, while online channel revenue decreased by 3.8% due to adjustments in the e-commerce team's personnel and strategy [1] Gross Margin and Profitability - The gross margin for the first half of 2025 was 47.2%, a decrease of 2.6 percentage points year-on-year [2] - Gross margins for different product categories were as follows: noodle products +0.5%, vegetable products -6.0%, and bean products +5.0 percentage points [2] - The decline in vegetable product gross margin was mainly due to a significant increase in the procurement price of konjac powder, although supply chain efficiencies partially offset cost pressures [2] - Despite the pressure on gross margins, the company achieved a net profit margin of 21.1%, significantly better than previous guidance [2] Profit Forecast and Investment Recommendations - Due to accelerated new product launches in the konjac category and successful internal cost reduction measures, the company has raised its profit forecasts for 2025-2027 [3] - Projected revenues for 2025-2027 are 7.53 billion, 9.06 billion, and 10.78 billion yuan, with year-on-year growth rates of 20.1%, 20.4%, and 18.9% respectively [3] - Projected net profits for the same period are 1.47 billion, 1.80 billion, and 2.18 billion yuan, with year-on-year growth rates of 38.0%, 22.2%, and 20.9% respectively [3] - The company is expected to maintain a price-to-earnings ratio of 20, 17, and 14 times for the respective years [3] - The company has established a certain level of competitive barriers through its brand and product categories, benefiting from the current konjac market trends [3]

Key Insights - The report highlights the growth potential of the Chinese casual dining sector, with a market size projected to reach approximately 3.9 trillion yuan by 2025, growing at a CAGR of 8.9% from 2023 to 2028 [9] - The company "小菜园" (Little Garden) is identified as a leading player in the casual dining space, with a focus on cost-effectiveness and a successful expansion strategy across China [8][11] - In 2024, Little Garden achieved revenue of 5.21 billion yuan, representing a year-on-year increase of 14.5%, and a net profit of 580 million yuan, up 9.1% [8] - The company plans to continue its expansion, with projections to increase its store count significantly from 667 in 2024 to 1,809 by 2030 [10] Company Overview - Little Garden operates a direct sales model and emphasizes value for money, with an average dining price of 59.2 yuan in 2024 [8] - The company has a strong presence in the East China region, with over 80% of its stores located there, and aims to penetrate deeper into this market while exploring new regions [10] - The report anticipates that the company's net profit will grow to 770 million yuan, 940 million yuan, and 1.12 billion yuan in 2025, 2026, and 2027 respectively, reflecting growth rates of 32%, 22%, and 19% [11] Industry Analysis - The casual dining market is characterized by a fragmented landscape, with the top five companies holding less than 1% market share, indicating significant opportunities for brands that can capture the lower-tier markets and enhance online presence [9] - The report draws parallels with Japan's dining sector, noting that leading companies can thrive even during economic downturns, suggesting a resilient growth trajectory for Little Garden [9] - The report emphasizes the importance of supply chain efficiency and operational improvements as key drivers for profitability in the casual dining sector [10] Investment Recommendations - The report suggests a target stock price range for Little Garden of 13.4 to 14.3 HKD, indicating a potential upside of 32.3% from the current price [11] - The company is rated "outperform" based on its strong market position, effective expansion strategy, and improving operational efficiency [11]

Investment Rating - The investment rating for the company is "Outperform the Market" [5][9][23] Core Views - The company reported a total revenue of 3.48 billion yuan for the first half of 2025, representing a year-on-year increase of 18.5%, with a net profit attributable to shareholders of 740 million yuan, also up 18.5% year-on-year [1][7] - The growth in revenue is primarily driven by the vegetable products segment, which saw a year-on-year increase of 44.3%, while the noodle products segment experienced a decline of 3.2% due to competitive pressures and SKU adjustments [1][9] - The company has effectively managed cost pressures through supply chain improvements, resulting in a gross margin of 47.2%, despite a year-on-year decrease of 2.6 percentage points [2][8] Revenue and Profitability - The company expects to achieve total revenues of 7.53 billion yuan, 9.06 billion yuan, and 10.78 billion yuan for the years 2025, 2026, and 2027, respectively, with year-on-year growth rates of 20.1%, 20.4%, and 18.9% [3][9] - The net profit attributable to shareholders is projected to be 1.47 billion yuan, 1.80 billion yuan, and 2.18 billion yuan for the same years, reflecting year-on-year growth rates of 38.0%, 22.2%, and 20.9% [3][9] - The earnings per share (EPS) are expected to be 0.61 yuan, 0.74 yuan, and 0.90 yuan for 2025, 2026, and 2027, respectively [3][9] Financial Metrics - The company has maintained a net profit margin of 21.1% for the first half of 2025, which is significantly better than previous guidance [2][8] - The price-to-earnings (PE) ratios for the years 2025, 2026, and 2027 are projected to be 20, 17, and 14 times, respectively [3][9] - The company has a dividend payout ratio of approximately 60%, with an interim dividend of 0.18 yuan per share announced [1][7]

Investment Rating - The report maintains a "Buy" rating for the company [12] Core Views - The company is expected to sustain its growth momentum due to its competitive supply chain advantages and a multi-channel, multi-category strategy, which is likely to enhance profitability [2][12] - The company has achieved significant sales milestones with its differentiated konjac product, indicating strong market potential [12] - The company is expanding its overseas market presence with localized products under its own brand, "Mowon," which is expected to contribute to revenue growth [12] Financial Summary - Total revenue is projected to grow from 4,115 million RMB in 2023 to 9,694 million RMB in 2027, reflecting a compound annual growth rate (CAGR) of 26.3% [4] - Net profit attributable to the parent company is expected to increase from 506 million RMB in 2023 to 1,264 million RMB in 2027, with a CAGR of 24.3% [4] - Earnings per share (EPS) is forecasted to rise from 1.85 RMB in 2023 to 4.63 RMB in 2027 [4] Market Position and Strategy - The company has established a comprehensive multi-channel matrix in the domestic market, enhancing brand strength for its "Big Demon King" konjac products [12] - The company is focusing on optimizing its product mix and channel structure, which is anticipated to improve profitability [12] - The company is leveraging its efficient organizational management and supply chain capabilities to capture market trends effectively [12]

Core Viewpoint - The rising popularity of konjac snacks, particularly "konjac shuang," has significantly impacted the stock prices of several listed companies, driven by consumer demand for low-calorie food options [1][8]. Group 1: Market Dynamics - The price of konjac has surged dramatically, with raw material prices increasing more than gold, leading to a supply-demand imbalance [1][7]. - The price of white konjac rose from 6000 yuan/ton to 9500 yuan/ton, a 58% increase, indicating a strong demand in the market [3][7]. - The overall retail sales of konjac snacks in China exceeded 12 billion yuan in 2024, marking a growth of over 20% [21]. Group 2: Company Performance - Weitong's stock price increased from 7 HKD/share in January 2025 to 17 HKD/share by May, a rise of 142% [1]. - Yanjinpuzi's stock price rose from 64 yuan/share to 89 yuan/share, reflecting a 39% increase [1]. - Yizhi Konjac, a konjac processing company, saw its stock price soar from 7 yuan/share to 59 yuan/share, a staggering 742% increase [1]. Group 3: Consumer Trends - The demand for konjac snacks has been fueled by health-conscious consumers seeking low-calorie alternatives, with brands like Weitong successfully marketing "konjac shuang" [8][10]. - Other snack brands, such as Yanjinpuzi and Liangpinpuzi, have also capitalized on the konjac trend, with significant revenue growth attributed to konjac products [10][14]. - The tea beverage industry has adopted konjac as an ingredient, further driving its popularity [14]. Group 4: Industry Challenges - The konjac planting area has shrunk by 23% over the past three years, compounded by a 15% reduction in yield due to drought, leading to raw material shortages [7][22]. - The industry faces challenges related to quality control and consumer perception, as some products may not meet the expected taste and quality standards due to cost-cutting measures [22][24]. - There is a concern about the "bad money driving out good," where lower-quality products could harm the overall market perception of konjac snacks [22][24].

Core Insights - The company reported a revenue of 5.304 billion yuan for 2024, a year-on-year increase of 28.89%, and a net profit of 640 million yuan, up 26.53% year-on-year [1] - In Q1 2025, the company achieved a revenue of 1.537 billion yuan, reflecting a year-on-year growth of 25.69%, with a net profit of 178 million yuan, an increase of 11.64% year-on-year [1] Group 1: Product Performance - The company experienced rapid growth in konjac products, with significant revenue contributions from various snack categories in 2024, including spicy snacks (1.962 billion yuan, +32.36%), baked potato snacks (1.158 billion yuan, +17.31%), and egg snacks (580 million yuan, +81.87%) [1] - The company launched a brand strategy in 2024, promoting "Big Demon King" and "Egg Emperor," which quickly gained popularity, with a specific product breaking the record for the fastest snack to reach 100 million yuan in sales [1] Group 2: Channel Performance - Direct sales in supermarkets saw a decline of 43.72% to 188 million yuan, while distribution and e-commerce channels grew by 34.01% and 39.95%, respectively, indicating a shift in the company's channel strategy [2] - The company is expanding its presence in Southeast Asia with its konjac products under the brand "Mowon," achieving breakthroughs in the Thai market and planning to extend globally [2] Group 3: Financial Metrics - The company's gross margin for 2024 was 30.69%, a decrease of 2.85 percentage points year-on-year, attributed to changes in channel structure with increased sales through e-commerce and bulk snack channels [3] - The company maintained good expense control, with selling and administrative expense ratios of 12.5% and 4.13% for 2024, and 11.24% and 3.44% for Q1 2025, respectively [3] Group 4: Investment Outlook - The company anticipates continued high growth in its core categories, including konjac and quail eggs, and is adjusting profit forecasts for 2025-2027, expecting net profits of 847 million, 1.046 billion, and 1.271 billion yuan, respectively [4] - The projected earnings per share (EPS) for 2025-2027 are 3.1, 3.83, and 4.66 yuan, corresponding to price-to-earnings (PE) ratios of 28, 23, and 19 times, respectively, maintaining a "buy" rating [4]

Core Viewpoint - The company aims to replicate its domestic success in overseas markets within 3-5 years, targeting an overseas revenue of 5.304 billion yuan by 2024, which would require a compound annual growth rate of approximately 142.85% [1][2]. Group 1: Overseas Market Strategy - The company plans to solidify its overseas market strategy, with a goal to achieve overseas revenue of over 600 million yuan in 2024, indicating a strong start in international expansion [1]. - The company’s overseas sales currently account for only 1.18% of total revenue, highlighting the challenges ahead in reaching its ambitious targets [1]. - The company has identified key products, such as konjac and quail eggs, to focus on in Southeast Asia, with over 80% of current overseas sales coming from Thailand [5][6]. Group 2: Product Performance - The konjac product line has shown significant growth, achieving 838 million yuan in revenue in 2024, a 76.09% increase from 2023, contributing 15.81% to total revenue [5]. - Quail egg snacks also demonstrated strong performance, generating 580 million yuan in revenue in 2024, up 81.87% year-on-year, contributing 10.93% to total revenue [5]. - The company believes that these products have a competitive edge in overseas markets due to their health attributes and alignment with local consumer trends [6]. Group 3: Operational Strategy - The company is investing 220 million yuan to establish a wholly-owned subsidiary and production base in Thailand, focusing on local production to reduce costs [7]. - The company has previously established fruit processing facilities in Cambodia and Thailand, indicating a strategy of localizing supply chains to enhance operational efficiency [7]. - The company is adopting a strategic partnership approach for distribution in overseas markets, focusing on quality over quantity in selecting distributors [8]. Group 4: Market Comparison - The company’s ambitious overseas revenue target contrasts sharply with competitors like Qiaqia Foods, which reported overseas revenue of 569 million yuan in 2024, reflecting a more modest growth trajectory [9]. - The comparison with Qiaqia Foods highlights the high stakes and challenges the company faces in achieving its overseas ambitions within the set timeframe [9].