Incident: On December 20, the company held the 4th Extraordinary General Meeting of Shareholders in 2024 to vote and review proposals such as the “Proposal on the Company's Issuance of H Shares to be Listed on the Stock Exchange of Hong Kong Limited”.

Develop internationalization and overseas business layout to enhance overall competitiveness. At present, domestic enterprises have relatively sufficient production capacity, and the quick-freezing industry is fiercely competitive. The company has reached a mature stage, regardless of its business model, business philosophy, product development, production management, and comprehensive competitiveness, and opening up the international market will also be a good direction for expansion. As China's influence expands, not only are there overseas Chinese, but there are more and more audiences for Chinese food overseas. The company actively lays out overseas business. While leveraging its advantages, the company actively expands overseas brands and territorial products. The funds raised are intended to be used for global sales network construction, global supply chain system construction, industrial investment and mergers and acquisitions, product development and technology upgrading, improving the level of automation and digitalization, and supplementing working capital. The issuance of H shares is a trumpet for the company's internationalization. It is also a way to enhance brand influence, establish influence in the capital market, and attract more international talents and investors.

The company confronts competition in the domestic market head-on, while actively innovating misplaced competition. The company will further upgrade its products and expand its consumption scenarios. 1) It is expected to further upgrade its fresh-packed products and packaging, and is expected to launch small packages and single-stick fresh-pack series in the future; 2) in the future, on the basis of continuing to expand its market share, make differentiated adjustments in consumption scenarios, such as scenarios such as breakfast; 3) rice and noodle products will gradually be upgraded; 4) shrimp paste products will also launch new plans for crayfish and shrimp paste with different flavors. The channel aspect continues to expand, actively embraces the Big B channel. Recently, new products have been launched to enter Big B customers, and are currently undergoing pilot sales in some regions.

The company actively responds to changes in the market environment and steadily promotes nationalization+internationalization. In line with the “real estate sales” production base construction model, the “origin research” + “origin sales” new product development and promotion model has been upgraded, actively embracing the trend of channel fragmentation and differentiation, while also accelerating the development of import and export business and the territorial development of overseas products, and actively going global on the basis of steady operation in the domestic market.

Profit forecast: We expect the company to achieve operating income of 15.591/17.614/19.946 billion yuan in 24-26, up 11.01%/12.98%/13.24% year on year; achieve net profit of 1.497/1.678/1.919 billion yuan, up 1.29%/12.07%/14.40% year on year. PE was 16.77/14.96/13.08x, respectively, maintaining the “Highly Recommended” rating.

Risk warning: macroeconomic downside risk, industry demand falling short of expectations, rising costs exceeding expectations