2025-08-29 02:19Summary of Foshan Haitian Flavouring & Food (603288.SS, 3288.HK) Conference Call Company Overview - Company: Foshan Haitian Flavouring & Food - Ticker: 603288.SS (A-share), 3288.HK (H-share) Key Financial Highlights - 1H25 Results: Reported sales of Rmb15.2 billion, net profit of Rmb3.9 billion, representing growth of 7.6% and 13.3% year-over-year respectively [1] - 2Q25 Performance: Sales and net profit reached Rmb6.9 billion and Rmb1.7 billion, growing 7.0% and 11.6% year-over-year [1] - Net Profit Margin: Improved to 24.8%, up 1 percentage point year-over-year, driven by better gross profit margin (GPM) expansion [1] - GPM Expansion: Increased by 3.9 percentage points year-over-year, attributed to cost tailwinds and efficiency gains [1] Product Performance - Condiments Sales: Grew by 10.5% in 1H25 and 10.6% in 2Q25 [1] - Soy Sauce Sales: Increased by 10.3% in 2Q25, contributing to overall condiment growth of 9.6% for other sauces, 9.8% for oyster sauce, and 12.7% for other condiments [2] - Online Sales Growth: Achieved 35% year-over-year growth in 2Q25, totaling Rmb425 million, while offline sales grew by 9% to Rmb6.155 billion [5] Geographic and Channel Performance - Geographic Sales Growth: North, South, East, Central, and West regions grew by 10.8%, 11.3%, 12.8%, 10.5%, and 6.0% respectively [5] - Sales Contribution from Online: Increased to 6.5% in 2Q25 compared to 5.3% in 2Q24 [5] Dividend and Future Outlook - Interim Dividend: Announced for the first time with a cash payout of Rmb1.5 billion, representing a payout ratio of approximately 39% [1] - 2025 ESOP KPI: Net profit target set at no less than 10.8% year-over-year growth [1] - Sustainability Concerns: Monitoring the sustainability of performance amid policy impacts starting from late May, with catering retail sales slowing down [1] Risks and Considerations - Downside Risks: Include slower-than-expected recovery in catering sales, increased industry competition, fluctuations in raw material costs, and potential food quality issues [10] - Upside Risks: Faster-than-expected business reforms, stronger growth in B2B sales, and benefits from cost deflation [10] Investment Recommendation - Rating: Reiterated Buy rating on H-share, trading at 23x 2026 P/E, approximately 22% discount to A-share [1]