It has high dividend potential, long-term steady operation, and continuous marginal improvement. 1) Marginal restoration of the Hong Kong stock market, and dividend strategy investment preferences bring investment opportunities. 2) The company maintains a high dividend of 100+%, and the dividend ratio is outstanding.

3) The company has built product, brand and channel advantages over many years of operation, and has made continuous efforts in launching new products and improving profits, and has long-term operating strength.

Incremental: Each business is looking for increments, price increases + lower costs, and profits continue to improve. Beverage business:

1) Optimization of the three-yuan price band pattern: The company and Master Kong are leading the 3 yuan tea price band share. According to Euromonitor statistics, the total market share of the two in mainland China exceeds 40%, and it became a consensus to raise prices to improve profitability. 2) Continued exploration of the basic market: beverage industry dividends brought about by the restoration of travel scenes+diversified expansion of channel types (3 new channels: home, catering, gifts), network encryption; 3) Increased search for new products:

Cater to the sugar-free tea trend, launch spring green tea+ explore the launch of Aishang tomato etc. in the direction of health. Food business:

1) Revenue side: Instant noodles continue to launch differentiated new products+ brand “open a small stove” layout of prepared dishes; 2) Profit side: cost improvement of bulk raw materials such as palm oil (2H23 palm oil/PET domestic average price -9.9%/-1.4% quarter-on-quarter) +widespread price increase of instant noodles optimizes profit margins.

Capable: Decades of steady development, creating deep business barriers. On the product side, the company has been in operation for more than 30 years. The current product matrix is rich and diverse, covering more than 10 racetracks, and continuously innovating to meet market needs. On the one hand, it continues to empower large-scale products, and on the other hand, grasp industry trends and continuously develop new current products; on the brand side, it consolidates the national brand image with a variety of 1 billion yuan products and closely connects with Gen Z to achieve brand rejuvenation and optimize sales expenses to support market growth; Channel side, the company has a solid channel base, covering a wide range of online and offline channel types, and continues to explore new scenarios such as home, catering, and gifts , encrypted terminal; team side, management team has rich work experience in the food and beverage field. Many executives have joined the company for more than 20 years, and the business stability is strong.

Investment advice: We expect the company to achieve revenue of 30.85/32.766/34.591 billion yuan in 2024-2026, up 7.90%/6.21%/5.57% year on year, and achieve net profit to mother of 1.846/2.023/2.194 billion yuan, up 10.72%/8.45% year over year, EPS of 0.43/0.47/0.51 yuan respectively, corresponding to PE 15/14/13x. The first coverage gives the company an “gain” rating.

Risk warning: spending power recovery falls short of expectations; food safety risks; industry competition is fierce