Huatai Securities | Master Kong Holdings (00322 HK): 1H26 Revenue and Core Profit Both Remained Resilient
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Master Kong Holdings (00322 HK) showed resilience in 1H26: revenue of RMB 40.54 billion, up 1.1% year on year, and attributable net profit of RMB 2.43 billion, up 7.1%, in line on revenue and slightly ahead on profit. Beverage revenue edged up 0.7% to RMB 26.54 billion, with tea drinks up 9.1% offsetting pressure on juices and packaged water; instant-foods revenue rose 2.0% to RMB 13.73 billion on steady core items such as container noodles and premium bag noodles. Gross margin improved 1.3pct to 35.8% on cheaper raw materials, better mix and higher capacity utilization, while the selling expense ratio held at 22.8% and the admin expense ratio rose 0.2pct to 3.8%. Huatai Securities lifts 2026-28 EPS forecasts by 5%/4%/4% to RMB 0.80/0.86/0.89, sees overall manageable cost pressure in 2026, stable margins via mix and efficiency, and a payout ratio near 100% over the next two to three years—an attractive yield. Buy maintained; target price HKD 14.71 (previously HKD 15.03) on lower peer multiples. Risks: competition, new-product misses, food safety.
Key exhibits
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