TINGYI(00322) 国联证券·2024-08-02 10:01Investment Rating - The investment rating for the company is "Buy (Initiation)" [3] Core Insights - The company, Master Kong, is a leading player in both the instant noodle and beverage industries in China, holding market shares of 45.7% and 43.4% respectively in 2021. The company has a robust product matrix and a strong distribution network, along with notable performance in R&D, pricing strategies, marketing, and cost control. It has maintained a high dividend payout ratio of no less than 98% from 2018 to 2023, indicating a commitment to returning value to shareholders. In the short term, the company has raised prices for its instant noodles and beverages while raw material costs remain stable, suggesting promising performance ahead [1][4][6]. Summary by Sections Company Overview - Master Kong is a leading enterprise in the instant noodle and beverage sectors, also serving as the exclusive manufacturer and distributor for brands like Pepsi and Starbucks in China. The company has established a strong brand presence since its inception in the 1990s and has a diverse product range including container noodles, bagged noodles, ready-to-drink tea, and carbonated beverages. Its extensive sales channels effectively cover lower-tier markets, ensuring high product circulation and turnover efficiency [4][13]. Industry Situation - The instant noodle industry in China is undergoing a transformation characterized by premiumization and a shift towards sugar-free products. The market has seen growth driven by urbanization and the pandemic, although health consciousness and the rise of food delivery services have posed challenges. The beverage sector, particularly ready-to-drink tea, is experiencing a surge in demand for sugar-free options, with significant growth potential compared to Japan's market [4][24]. Core Value - Master Kong demonstrates strong operational management across various dimensions, maintaining a stable high market share in both instant noodles and beverages with continuous revenue growth over the past seven years. The company employs flexible pricing strategies and effective cost management to sustain profit levels. Its net profit and operating cash flow are stable, with substantial cash reserves supporting its high dividend payouts, reinforcing its leadership position [4][8][9]. Earnings Forecast, Valuation, and Rating - The company is projected to achieve revenues of 850.82 billion, 889.70 billion, and 924.85 billion yuan for the years 2024 to 2026, with year-on-year growth rates of 5.80%, 4.57%, and 3.95% respectively. The net profit attributable to shareholders is expected to be 34.71 billion, 36.41 billion, and 37.76 billion yuan, with growth rates of 11.33%, 4.92%, and 3.70%. The earnings per share (EPS) are forecasted to be 0.62, 0.65, and 0.67 yuan per share, with a three-year compound annual growth rate (CAGR) of 6.60%. Given the company's solid market position and consistent high dividends, it is rated as "Buy" [8][9].