Rising Volume & Price for Core Biz.
发布时间:2026-08-16 来源:华泰证券
Yihai Kerry Arawana has reported 1H26 results,beginning with revenue of RMB122,852mn,up 6.20%YoY;attributable net profit of RMB2,294mn,up 30.69%YoY;and recurring net profit of RMB1,481mn,up 6.61%YoY.For 2Q26,revenue of RMB57,320mn was up 1.27%YoY,with attributable net profit of RMB813mn,up 4.97%YoY.We attribute the headline profit beat to aone-off gain from the Kellogg's equity disposal.Excluding this,core earnings grew steadily.Maintain OVERWEIGHT.
Core segments delivered volume and price growth
1)Kitchen food:Revenue reached RMB77,424mn,up 8.21%YoY,with gross margin of 7.15%(down 0.51pp).Sales volume rose 4.79%YoY to 12.44mn tonnes,while ASP increased 3.3%YoY.Volume growth spanned consumer retail,foodservice,food processing,and e-commerce channels,driven by strong product innovation,distribution network expansion,and product mix upgrades.We attribute the slight margin compression to higher raw material costs in 2Q,which also pushed ASP higher.2)Feed ingredients and oilseeds technology:Revenue came in at RMB44,512mn,up 3.09%YoY,with gross margin improving 0.13pp to 4.39%.Sales volume grew 3.05%YoY to 15.13mn tonnes,while ASP edged up 0.04%YoY,supported by rising feed demand from livestock farming and sales volume/price growth in oilseeds technology products.
Kellogg's equity disposal boosts reported profit
The 1H26 expense ratio came in at 4.30%,down 0.25pp YoY,reflecting sustained cost discipline.Selling expenses stood at 2.58%of revenue(down 0.11pp YoY),G&A at 1.51%(down 0.10pp),financial costs at 0.11%(down 0.03pp,with absolute finance costs declining 19.52%YoY),and R&D at 0.10%(broadly flat YoY).All expense ratios edged lower,as scale benefits and leaner management continued to unlock profit headroom.Separately,the company completed the sale of its 50%stakes in Shanghai and Kunshan Kellogg's to Mars Wrigley,booking apre-tax gain of RMB309mn and an attributable net profit contribution of RMB263mn.Excluding this one-off,attributable net profit reached RMB2,031mn,up 15.71%YoY,underscoring steady growth in the core business.
Big Health strategy takes shape,supporting LT brand value
1)Under the"Arawana Fengyitang"brand,the company is rolling out functional health products such as diacylglycerol cooking oil,low-GI rice and flour,and phytosterol protein milk,meeting demand from health-conscious consumers.The product mix continues to shift toward higher-value-added offerings.2)For 1H26,R&D spending reached RMB128mn,up 6.96%YoY,as the company steps up investment to support the iteration of functional new products and category expansion.We believe the Big Health strategy could unlock medium-to-long-term growth potential and strengthen both brand value and pricing power.
Earnings forecasts and valuation
We maintain our 2026/2027/2028 attributable net profit forecasts at RMB4.75/6.88/8.53bn,implying EPS of RMB0.88/1.27/1.57.Comparable peers trade at an average 2026E PE of 29.0x on Wind consensus,while the stock has historically traded at amean PE of 66.5x since listing.Factoring in the company's status as agrain/oil leader,its scale advantage,the recovery trajectory in core earnings,and potential upside from litigation provision reversals,we assign a2026E PE of 35x,yielding atarget price of RMB30.8(prior:RMB35.2,based on 2026E PE of 40x).Maintain OVERWEIGHT.
Risks:sharp raw material price swings,food safety incidents,uncertainty over litigation progress and rulings,and weaker end-demand recovery than we expect.