The Zhitong Finance App learned that Goldman Sachs released a research report stating that it raised the sales forecast of Yihai International (01579) by 5% to 10% from 2026 to 2028, reflecting the acceleration of related party business and third-party hot pot seasonings/convenience foods, which was partially offset by the slowdown in Chinese compound seasonings; the profit forecast was raised by 4% to 9%. The bank predicts year-on-year sales and net profit increases of 14% and 15%, respectively, in 2026, and is expected to increase 9% and 15%, respectively, in 2027. The target price for 12 months was raised from HK$19 to HK$21.5, attracting risk and return, maintaining a “buy” rating.
Goldman Sachs pointed out that Yihai International's performance in the first half of the year beat expectations. At the performance briefing, management shared encouraging overseas progress, improving 2C operating performance through direct channel reform, and detailed B2B product/customer development strategies, supporting the bank's views on long-term growth visibility and room for upward profit margins. The management reiterated its confidence in the hot pot seasoning product/brand/executive advantage, continued to gain market share on an established scale, and viewed B2B as a long-term compound growth opportunity. Standardized products represent broad long-term growth opportunities for small B customers, and management is also positive about expanding customized business for large B-side customers. In terms of Chinese compound seasonings, the company is strengthening regional/channel-specific product innovation to drive growth again.
Management pointed out that sales from related parties should continue to benefit from the expansion of related parties' takeout business, but competition is still significant. Raw material costs remained generally stable in the second half of the year, and competition and promotion intensity were key variables in gross margin. Management also mentioned that a higher share of direct sales reduces channel discounts and requires higher cost investment, but the efficiency of direct operations has already benefited the sales system. The dividend payout ratio should remain high (94% in the first half of the year). The only major capital allocation priority is overseas mergers and acquisitions, but there are no specific plans yet.