Huaxi: Maintaining a "buy" rating on AUSNUTRIA (01717), the interim report shows continued optimization of the practical channel.

Huaxi released a research report stating that it maintains a "buy" rating for AUSNUTRIA (01717), based on the company's interim updated profit forecast. The revenue forecast for 2024-26 has been adjusted from 81/85/88 billion yuan to 79/84/89 billion yuan, and the net profit attributable to shareholders has been adjusted from 2.9/4.1/4.2 billion yuan to 2.8/3.7/4.6 billion yuan. The bank believes that with the gradual landing of new national standard products and industry consolidation, the end retail prices are stable and rising, and the operating environment of the overall infant formula industry in China is improving. Looking ahead to the second half of the year, goat milk powder revenue is expected to continue the double-digit growth trend of the first half of the year; as for cow milk powder, the gradual completion of the switch between new and old national standard products is expected to narrow the decline in annual revenue. The report mentions that the group focuses on the upstream production business of Jin Qi Group, increasing investment in the research and development of proprietary strains, and increasing the output ratio; working with downstream brands to create high-quality probiotic products. After the rapid completion of the internal integration of the two major brands (Aiyisen and NC) in the downstream retail business, the two major brands extend and expand new customer groups and channels, form a "whole-family nutrition and health" map through all channels, and achieve a year-on-year sales growth of 34.7% in the downstream. According to the interim report: 1) Jiabei Aite continues to optimize the channel value chain, steadily increasing the terminal price, and strengthening channel confidence. In advancing the sinking of channels, continue to build benchmark county and township markets, and continue to promote the Thousand Counties and Ten Thousand Towns Plan; 2) Facing industry challenges, brands and channels join forces to shape a deeper "systemic competitiveness", such as the 23 Group's establishment of the Haipunuo Kai 1897 "Heavenly Mother and Baby Alliance", and in June held the Haipunuo Kai Heavenly Mother and Baby Alliance Summit in Dunhuang, Gansu, China, reaching a deep consensus with channel partners on strategy and increasing the stickiness of key customers; 3) The two major brands NC and Aiyisen continue to exert efforts on new media platforms such as Xiaohongshu and Douyin, with high-quality, valuable content that resonates with users, reaching the decision-making path of users and seizing traffic. Through strong exposure and precise positioning, consumers can see and search, helping channel conversion.