农夫山泉：H1业绩符合预期，包装水市场份额有望逐步回补

Investment Rating - Buy/Initiate coverage with a target price of HKD 34.7 [1] Core Views - H1 2024 performance met expectations, with revenue reaching RMB 22.17 billion, up 8.4% YoY, and net profit attributable to shareholders of RMB 6.24 billion, up 8.1% YoY [2] - Green bottle purified water performed well, compensating for the decline in packaged water market share, while sugar-free tea continued to grow rapidly [2] - The company's gross margin decreased by 1.38 percentage points to 58.78% due to increased promotional efforts and lower capacity utilization in the packaged water segment [2] - The company is expected to recover its packaged water market share gradually, with a stable overall operation aiming for high-quality development [2] Product Performance - Packaged water revenue decreased by 18.3% YoY to RMB 8.53 billion, while tea beverage revenue increased by 59.5% YoY to RMB 8.43 billion [2] - Functional beverage revenue grew by 3.8% YoY to RMB 2.55 billion, and juice revenue increased by 25.4% YoY to RMB 2.11 billion [2] - The operating profit margin for packaged water decreased by 4.2 percentage points, while tea beverages saw an increase of 1.0 percentage point [2] Future Outlook - The company expects revenue to grow by 8%, 12%, and 13% in 2024, 2025, and 2026, respectively, reaching RMB 46.21 billion, RMB 51.85 billion, and RMB 58.33 billion [2] - Net profit is projected to grow by 6%, 12%, and 13% over the same period, reaching RMB 12.83 billion, RMB 14.32 billion, and RMB 16.23 billion, respectively [2] - The company's PE ratio is expected to be 19X, 15X, and 13X for 2024, 2025, and 2026, respectively [2] Financial Metrics - The company's net profit margin remained stable at 28.14% in H1 2024, down only 0.08 percentage points YoY [2] - Sales expenses decreased by 0.53 percentage points to 22.42%, while management expenses decreased by 0.56 percentage points to 4.12% [2] - The company's ROE is expected to be 42.28%, 38.93%, 30.28%, and 25.55% for 2023A, 2024E, 2025E, and 2026E, respectively [6]