<Research>JPM: TINGYI (00322.HK) Interim Results Broadly In Line; Rating Overweight

The analyst rating for U-PRESID CHINA is currently set at Neutral due to several challenges highlighted in their 3Q25 results. Although the net profit grew by 8% year-over-year, it fell short of market expectations for double-digit growth. Revenue remained flat year-over-year, with mixed performance across segments—low- to mid-single-digit growth in the food segment was offset by a decline in the beverage segment. Additionally, persistent headwinds such as competition from freshly made beverages and execution risks related to the company's growth strategy were noted. While the company's dividend yield of 6.5% is attractive and there is potential for an upgrade to Overweight if the competitive landscape stabilizes, the current challenges have led to a cautious outlook, prompting the rating to remain at Neutral and a reduction in the target price from $9.9 to $8.4.

The analyst rating for U-PRESID CHINA was adjusted to Neutral by Goldman Sachs due to a combination of factors. While the company reported stable revenue with growth in the food and OEM businesses, the decline in the beverage business and ongoing intense competition led to a cautious outlook for 2026. Additionally, operational deleveraging prompted a reduction in the net profit forecast by 3-4%, resulting in a 1% adjustment in the sales forecast. Consequently, Goldman Sachs lowered its target price from $9.3 to $9, reflecting these concerns.

The analyst rating for U-PRESID CHINA remains at "Outperform" despite a cut in the target price from HKD10.5 to HKD10. This decision is based on the company's management maintaining its full-year sales growth target of 6-8%, even in the face of rising pressure on the beverage business and a slowdown in sales growth in 3Q25. The sales growth was roughly flat year-over-year, aligning with market expectations, which suggests that the company is managing to meet its targets despite intensified competition and the impact of subsidies from food delivery platforms.