Summary of Weilong Delicious Global Conference Call Company Overview - **Company**: Weilong Delicious Global - **Industry**: Food Products, specifically spicy snack foods - **Market Position**: Leading company in the spicy snack food sector in China with a market share of 6.2% in retail sales value as of 2021, significantly ahead of competitors [doc id='13']. Key Financial Results - **1H25 Performance**: - Revenue increased by 18.5% YoY to Rmb3,483 million - Net Profit (NP) rose by 18.0% YoY to Rmb733 million, exceeding market expectations [doc id='2']. - Interim dividend announced at Rmb0.18 per share, maintaining a 60% payout ratio [doc id='2']. Sales Performance by Category - **Sales Breakdown**: - Seasoned flour products: -3% YoY - Vegetable products: +44% YoY - Bean-based products: -48% YoY - Contribution to total sales: Seasoned flour (38%), Vegetable (60%), Bean-based (2%) [doc id='3']. - **Vegetable Products**: Strong growth attributed to demand for Konjac Shuang and ongoing product upgrades [doc id='3']. Sales Performance by Channel - **Channel Contribution**: - Offline sales: 90% - Online sales: 10% - Emerging channels (O2O, snack specialty retailers, content e-commerce) showed strong momentum [doc id='4']. Margin Analysis - **Net Profit Margin (NPM)**: Decreased by 0.1 percentage points YoY to 21.0%, higher than market expectations. - **Gross Profit Margin (GPM)**: Decreased by 2.6 percentage points YoY to 47.2% due to rising raw material costs. - **Cost Savings**: Significant reductions in Selling & Distribution expense ratio (-1.0pp to 15.1%) and Administrative expense ratio (-2.5pp to 5.8%) [doc id='5']. Future Outlook - **Management Guidance**: Further details on the outlook for 2H25 will be provided in an investor presentation scheduled for August 15 [doc id='6']. - **Valuation**: Reiterated "Buy" rating with a price target of HK$16.50, reflecting a potential upside based on revised NP estimates for 2025 and 2026 [doc id='7']. Valuation Metrics - **Projected Financials**: - Revenue and NP growth estimates for 2025: 18% and 31% YoY respectively. - Key metrics for 2025E include: - Revenues: Rmb7,413 million - Net Earnings: Rmb1,400 million - EPS: Rmb0.59 [doc id='7']. Risks and Opportunities - **Downside Risks**: - Shrinking demand, economic slowdown, regulatory challenges, increased competition, and changing consumer preferences [doc id='15']. - **Upside Opportunities**: - Rising disposable income and stabilizing raw material prices [doc id='16']. Market Data - **Current Price**: HK$12.11 as of August 14, 2025 - **Market Capitalization**: HK$29.4 billion (approximately US$3.75 billion) [doc id='8']. This summary encapsulates the key points from the conference call regarding Weilong Delicious Global, highlighting its financial performance, market position, and future outlook.