Summary of China Beverages Conference Call Industry Overview - The report focuses on the **China Beverages** industry, particularly the **ready-to-drink (RTD)** segment and competition from **freshly-made drinks (FMD)**. - The covered China Beverages names have outperformed the MSCI China Staples Index, with an average increase of approximately **20% YTD** compared to **17% YTD** for the index [1][4]. Key Insights and Arguments - **Cautious Outlook**: The company adopts a more selective stance in the beverage sector due to rising competition and cautious pricing trends expected into **2026**. Increased promotions and a shift towards larger pack sizes are anticipated by the end of **2025** [1][4]. - **Top Picks**: **Eastroc** is highlighted as a top pick due to its potential for market share gain and portfolio expansion, supported by strong channel execution and resilience against FMD competition [1][4]. - **Nongfu's Performance**: Nongfu is expected to recover market share in packaged water, with an estimated **80%+** market share in the sugar-free tea segment by the end of this year, up from **65%-70%** in **2024** [1][4]. - **Earnings Adjustments**: Earnings for **UPC** and **Tingyi** have been adjusted down by **3%-8%** and **1%-3%** respectively for **2025E-27E** due to slower sales growth trends. Conversely, Nongfu's earnings have been revised up by **0.2%-1.7%** for the same period [1][4]. Competitive Landscape - **FMD Competition**: The competition from FMD brands is intensifying, particularly in **3Q**. The impact on RTD beverages is more pronounced than previously expected, with a projected **3%** volume hit to bottled beverages for the full year **2025** [1][6]. - **Promotional Pressure**: Increased promotions have led to weakened pricing for RTD drinks, with a narrowing price gap between RTD and mass-market FMD [1][8]. - **Market Dynamics**: Historical brand disputes in the beverage industry have shown long-lasting negative impacts on sales and market share dynamics, providing opportunities for competitors to gain market share [1][7][13]. Financial Projections - **Earnings Growth Expectations**: Expected year-over-year earnings growth for **Nongfu/Eastroc/Tingyi/UPC** in **2H25** is **29%/35%/7%/17%** respectively, while **CR Beverage** is projected to see a **49%** earnings decline [1][4]. - **Cost Trends**: Anticipated **3%-6%** unit cost deflation in **2025** is expected to lead to **2.0-3.3ppt** gross profit margin (GPM) expansion. However, cost benefits are moderating, particularly in **PET/sugar** [1][24][25]. Additional Insights - **Wahaha Brand Dynamics**: The potential launch of a new brand "Wa Xiao Zong" by Hongsheng Group in **2026** could shift market dynamics in the bottled water segment, particularly affecting Wahaha's market share [1][16][17]. - **Scenario Analysis**: The report includes scenario analyses predicting potential market share movements for **Nongfu** and **CR Beverage** based on the dynamics surrounding the Wahaha brand dispute [1][20][21]. Conclusion - The China Beverages industry is facing heightened competition and changing market dynamics, particularly from FMD brands. Companies like Eastroc and Nongfu are positioned to capitalize on these changes, while others like UPC and Tingyi may face challenges. The financial outlook remains cautiously optimistic, with adjustments made to earnings forecasts reflecting the competitive landscape.

Core Insights - EngageLab has partnered with a prominent Chinese tea beverage brand to support its global expansion through enhanced AppPush notification capabilities [1][2] - The tea brand has successfully established thousands of stores in over 100 countries, positioning itself as a leading player in the fresh-made tea beverage sector [1][2] Group 1: Partnership and Expansion - EngageLab's AppPush solution has significantly improved the tea brand's overseas notification services, addressing challenges such as unstable channel quality and unreliable message delivery [2] - The brand's global expansion strategy includes presenting Eastern tea culture through a modern lens, leveraging premium original leaf tea [1][2] Group 2: Improvements Achieved - Message delivery rates improved by approximately 40% due to EngageLab's integration of international mainstream system channels and major smartphone manufacturer push channels [2] - EngageLab's dynamic AppKey switching function allows the brand to implement independent push strategies and marketing campaigns tailored to different markets, reducing development costs [2] - EngageLab has established distributed data centers in strategic locations worldwide to ensure compliance with local privacy regulations, enhancing data handling for the brand [2] Group 3: EngageLab Overview - EngageLab is a leading AI-powered omnichannel customer engagement solution provider, delivering over 1 million messages every second across various channels [3] - The company supports businesses in over 220 countries and regions, focusing on innovation and performance to enhance customer interactions [3]