Leading in the brewed milk tea category, the instant drink category showed strong growth, and for the first time, coverage gave it an “increase in weight” rating

Xiangpiaopiao Company is a leading racetrack enterprise in the milk tea brewing industry. After years of accumulated brand and innovative advantages, it has entered the ready-to-drink product circuit, and has successively launched products such as juice tea in cups and frozen lemon tea in bottles. In terms of brands, the company focuses on the three major brands of “Xiangpiaopiao,” “Meco Honey Valley,” and “Lanfangyuan” to build a product matrix. The company emerged from the negative impact of the external environment and began reforms in 2023, formulating a two-wheel drive strategy, adjusting the organizational structure, and introducing professional managers. On the basis of steady growth in the brewing business, the ready-to-drink business is expected to help the company achieve rapid growth. We expect Xiang Piaopiao's revenue for 2024-2026 to be 4.26, 4.92, and 5.67 billion yuan respectively, up 17.6%, 15.4%, and 15.3% year on year; net profit to mother will be 0.33, 0.4, and 0.49 billion yuan respectively, up 19.2%, 20.3% year on year; corresponding EPS will be 0.81, 0.98, and 1.19 yuan respectively. The corresponding PE corresponding to the current stock price will be 15.0, 12.5, and 10.3 times, respectively. grade.

The soft drink market is broad, and the leading position is steady. New entrants are saving energy for growth in the soft drink market through differentiated strategies. It has maintained a high compound growth rate over the past 10 years, and is expected to maintain steady growth in the future. From the perspective of per capita consumption, the increase in domestic per capita soft drink consumption is expected to drive further growth in the industry. There are many industry segments. In recent years, residents' living conditions have improved, demand for health has begun to rise, and low-sugar, sugar-free, and functional products have emerged to promote the development of the industry. In the current industry context, new entrants can extend the life cycle of aging products and cultivate and tap the growth potential of new products through differentiated product strategies such as flavor iteration and product innovation.

Strong two-wheel drive strategy, full potential in the ready-to-drink category

On the revenue side, Xiang Piaopiao Company adheres to the “two-wheel drive” development strategy. While steadily consolidating the brewed milk tea business, it continues to expand the ready-to-drink beverage business, and achieve sustainable and healthy development through the overall growth of the brewing and ready-to-drink two-wheel drive company. On the brewing business side, the company's leading business is stable, and will continue to promote the healthy upgrading of brewing business products, focus on channel cultivation, and develop diversified product consumption scenarios; on the ready-to-drink business side, the company's ready-to-drink business will establish an independent division to continue to develop around core products such as fruit tea and frozen lemon tea, focus on key cities, create model markets, build stronger profit models, expand diversified channels and better dealer customers.

Risk warning: risk of raw material price increase, food safety risk, risk of new product promotion falling short of expectations.