Investment Rating - Buy (Maintained) [2] Core Views - Yihai International achieved revenue of RMB 2.927 billion in H1 2024, a YoY increase of 11.9%, with net profit attributable to shareholders of RMB 308 million, a YoY decrease of 13.8%, and adjusted net profit (excluding exchange gains/losses and government subsidies) of RMB 299 million, a YoY increase of 4.5%, meeting market expectations [2] - The company plans to distribute dividends of RMB 293 million for H1 2024, with a dividend payout ratio of 95.1% [2] - Revenue from third-party customers improved YoY, with significant growth in online and overseas markets expected in 2024 [3] - The company's profitability is expected to improve in H2 2024, driven by better performance in hotpot seasoning and new product launches [4] Revenue Breakdown by Product - Hotpot seasoning revenue reached RMB 1.747 billion, a YoY increase of 5.6%, with third-party and related-party revenue growing by 5.6% and 5.7% respectively [3] - Chinese-style compound seasoning revenue was RMB 454 million, a YoY increase of 24.4%, with third-party and related-party revenue growing by 24.1% and 29.9% respectively [3] - Instant food revenue reached RMB 700 million, a YoY increase of 22.2%, with third-party and related-party revenue growing by 14.5% and 167.7% respectively [3] Revenue Breakdown by Channel - Related-party revenue was RMB 989 million, a YoY increase of 11.5%, while third-party revenue was RMB 1.938 billion, a YoY increase of 12.1% [3] - Within third-party revenue, distributors (including catering and food companies) contributed RMB 1.758 billion, a YoY increase of 12.0%, while e-commerce (flagship stores) contributed RMB 175 million, a YoY increase of 12.4% [3] Profitability and Costs - Gross margin was 30.0% in H1 2024, a YoY decrease of 0.5 percentage points, mainly due to price adjustments for related-party sales [4] - Sales expense ratio was 12.0%, a YoY increase of 2.9 percentage points, driven by increased marketing expenses (advertising expenses increased by 140% YoY) and higher logistics costs [4] - Management expense ratio was 4.8%, a YoY decrease of 0.6 percentage points [4] Future Outlook - The company is expected to see improved performance in hotpot seasoning in H2 2024, with new product launches such as Yunnan wild mushroom base and seafood dipping sauce [4] - Overseas market expansion is a key focus, with the company targeting halal and Middle Eastern markets, supported by production centers in Southeast Asia and a new factory in Thailand [4] - The company has adjusted its "partner" incentive mechanism, which is expected to drive performance in H2 2024 [4] Financial Forecasts - Revenue is expected to grow to RMB 6.841 billion in 2024, RMB 7.702 billion in 2025, and RMB 8.498 billion in 2026, with YoY growth rates of 11.3%, 12.6%, and 10.3% respectively [6] - Net profit attributable to shareholders is forecasted to be RMB 863 million in 2024, RMB 1.007 billion in 2025, and RMB 1.115 billion in 2026 [6] - EPS is expected to be RMB 0.71 in 2024, RMB 0.82 in 2025, and RMB 0.83 in 2026 [6] Valuation - The current stock price implies a 2024 PE ratio of 12x [5] - The company's long-term growth potential is supported by brand building, product matrix expansion, and market and channel development [5]
颐海国际：2024年中报点评：第三方营收同比改善，高分红提升股东回报