UNI-PRESIDENT CHINA(220.HK):3Q24 NET PROFIT WAS UP 13% YOY SLIGHTLY MISSING EXPECTATION;PROFIT MARGIN EXPANSION IN 2025 LOOKS A BIT UNCERTAIN
UNI-PRESIDENT CHINA(220.HK):3Q24 NET PROFIT WAS UP 13% YOY SLIGHTLY MISSING EXPECTATION;PROFIT MARGIN EXPANSION IN 2025 LOOKS A BIT UNCERTAIN
3Q24 profit update. On 12 November 2024, UPC released its 3Q24 unaudited net profit, which came in at RMB670m (+13% YoY), slightly below expectation. 1-9M24 net profit thus reached RMB1,636m (+35% YoY). 3Q24 net profit was up 13% YoY to RMB670m. GPM expansion (+2ppts YoY; mostly from beverage segment) was partially offset by higher S&D expenses ratio. Going forward, UPC will continue to cut promotions but is less likely to adopt price hikes. Recurring channel investments may help UPC consolidate market share in such a competitive environment.
3季度24淨利潤同比增長13%，達到67000萬人民幣。從商品板塊中（主要是飲料板塊）的GPm擴張(+2個百分點同比)得到部分抵消，但受較高的S&D費用比率影響。展望未來，康師傅控股將繼續削減促銷活動，但不太可能提價。在如此競爭激烈的環境中，持續進行渠道投資可能有助於幫助康師傅控股鞏固市場份額。
However, coupled with the recent rally of palm oil price, its profitability improvement trend is not so clear in the coming quarters.
然而，隨着棕櫚油價格近期上漲，未來幾個季度其盈利改善趨勢並不明確。
Key Factors for Rating
評級的關鍵因素
3Q24 profit update. On 12 November 2024, UPC released its 3Q24 unaudited net profit, which came in at RMB670m (+13% YoY), slightly below expectation. 1-9M24 net profit thus reached RMB1,636m (+35% YoY).
3季度24利潤更新。2024年11月12日，康師傅控股發佈了其未經審計的3季度24淨利潤，達到67000萬人民幣（+13%同比），略低於預期。1-9月24淨利潤因此達到了163600萬人民幣（+35%同比）。
Beverage segment maintained strong growth momentum. According to management, UPC's beverage sales delivered low-teen% YoY growth in 3Q24, mainly driven by accelerated POS expansion (incl. higher penetration of display refrigerators) and well-established product mix. UPC saw sequentially recovering demand for beverages from June to October 2024. By product, sugar-free RTD tea (e.g. "Spring Breeze Green Tea") sustained solid growth, despite intensified industry competition during 3Q24.
飲料板塊保持強勁增長勢頭。據管理層介紹，康師傅控股的飲料銷售在3季度24實現了低個位數同比增長，主要受加速的pos擴張（包括顯示冰箱的普及率提高）和成熟的產品組合推動。康師傅控股看到2024年6月至10月飲料需求逐漸恢復。就產品而言，無糖即飲茶（例如「春風綠茶」）保持了穩健增長，儘管在3季度24期間面臨加劇的行業競爭。
UPC looks for gaining share in the instant noodle market. In 3Q24, UPC's food segment saw LSD% YoY growth. By product, sales of instant noodles saw MSD%-to-HSD% YoY growth, while sales of other convenience foods (e.g. "Kai Xiao Zao") declined YoY.
康師傅控股力爭在方便麪市場佔有份額。在3季度24，康師傅控股的食品板塊看到了低個位數同比增長。就產品而言，方便麪銷售實現了中單位數至高單位數增長，而其他便利食品銷售（例如「開小竈」）同比下滑。
We are more cautious about UPC's margin expansion trend. According to management, 3Q24 GPM enhancement was equally attributable to 1) fewer price-based promotions on average, instead of following Tingyi's (322 HK/ TP: HK$12.20, BUY) price hikes, 2) cost tailwind, and 3) efficiency. However, looking ahead, we expect UPC's profit margin expansion logic to be less visible.
我們對康師傅控股的利潤率擴張趨勢更爲謹慎。根據管理層的說法，3季度24的GPm增強主要歸因於以下三點：1）平均較少基於價格的促銷，而不是跟隨康師傅控股（322 HK/ TP: HK$12.20, 買入）的漲價，2）成本助推因素，3）效率提升。然而，展望未來，我們預計康師傅控股的利潤率擴張邏輯可能不太明顯。
On the one hand, raw material cost would be marginally unfavourable from 4Q24. The QTD average price of palm oil surged 18% vs. the 3Q24 average price, weighing on UPC's instant noodle GPM. On the other hand, management now strategically prioritises the importance of top-line growth (along with its market share gains) over that of profitability in the coming years in such a competitive environment, so S&D expenses ratio could stand higher due to recurring investments in brand building, advertising and POS expansion.
一方面，從2024年第4季度開始，原材料成本可能略爲不利。棕櫚油的QTD平均價格較3季度24平均價格上漲了18%，對康師傅控股的方便麪GPm產生負面影響。另一方面，管理層目前戰略性地將重點放在未來幾年的營業額增長（以及市場份額增長）的重要性上，超過了對盈利能力的重視，因此在如此競爭激烈的環境中，S&D費用比率可能較高，這是由於對品牌建設、廣告和pos拓展的重複投資。
Notably, UPC so far has covered nearly 3m POS for beverage segment, and now controls display refrigerators in 1/3 of all the POS (long-term target: 1/2 of all the POS), which we think will be helpful for speeding up sales turnover in on-the-go consumption scenarios.
值得注意的是，UPC迄今爲止已經爲飲料行業板塊覆蓋了近300萬 pos，現在控制着所有 pos 的三分之一的蘋果-顯示屏 (長期目標：所有 pos 的一半)，我們認爲這將有助於加快在外出消費場景中的銷售週轉。
譯文內容由第三人軟體翻譯。
