Penetrating into China NFC (not from concentrate) juice market;new product sales revenue of RMB13.3 mn in March – June 2015,and management expected significant growth in the future Tianyi plans to reach 10,000 off-line POS and 50 on-line salesplatforms by June 2016 Current valuation at 10x/8x FY16E/17E (June) P/E, compared to19x/17x FY15E/FY16E P/E of food & beverage sector Transforming from B2B to B2C via new brand launchingLeveraging on the success of supplying orange juice raw materials(concentrated juice and orange sac) to Coca-Cola’s Minute Maid andWahaha for more than 10 years, Tianyi is expanding its business modelto downstream by introducing its own branded NFC (not fromconcentrate) product “Summi”. It is the first NFC product madedomestically, and Tianyi aims to compete with similar imported products(Tropicana and Florida’s Nature) in the NFC (not from concentrate)market of China. Tianyi has launched Summi NFC orange juice inseven pilot cities, and recorded total sales of RMB13.3 mn in the first fourmonths of launching. Expanding plan of distribution networkTianyi is planning to distribute its Summi NFC orange juice through highend supermarkets/hypermarket, convenient stores, e-commerceplatforms, and special channels. It targets to increase off-line POS fromcurrently 615 to around 10,000; and increase on-line sales platforms fromcurrently 27 to 50 by the end of June 2016. Moreover, managementbelieved its advanced frozen warehouse facilities and cold-chain logisticswill also create entry barriers to other rivals. Valuation/ Key risks Tianyi is trading at 10x/8x FY16E/17E P/E, according to Bloombergconsensus. The average valuation of HK, China and global F&Bcompanies are 20x/18x FY15E/16E P/E. Key risks for Tianyi are theexecution risk related to the promotion of new products and therevaluation of biological assets, which may have impact on net profit. Keyrisks: Execution risks and biological assets revaluation may affect itsbottom line.