HK Stock Market Move | Master Kang (00322) rose more than 4%, with institutions predicting that the company's profit margin in the second half of 2024 may exceed expectations.

Master Kang (00322) rose more than 4%, as of the deadline for submission, it rose by 3.61%, closing at 10.34 Hong Kong dollars, with a turnover of 180.347 million Hong Kong dollars. China International Capital Corporation released a research report stating that, based on their grassroots research, the company's instant noodle business is expected to remain flat year-on-year in the second half of 2024. In July, the company completed the upgrade and price increase of its classic series products. As a result, instant noodle sales volume and market share declined in the third quarter, but are expected to recover year-on-year in the fourth quarter due to a low base. Beverage revenue performed weakly due to weather and competition in the third quarter, but is expected to recover year-on-year in the fourth quarter. Overall, beverage revenue in the second half of 2024 may still see a small decline year-on-year, with tea drinks maintaining good growth while water and juice may see a slight decline. Carbonated drinks are expected to recover from the fourth quarter of 2024 onwards due to a low base. The company is expected to maintain its revenue year-on-year for the full year, slightly weaker than the company's mid-year guidance, but considering the price increase in the company's instant noodles and beverage businesses, as well as intensifying competition in the beverage industry, the overall revenue performance is expected to be relatively stable. The report continues to state that, benefiting from price increases, favorable cost factors, and product structure improvements, the company's gross profit margin in the second half of 2024 is expected to increase year-on-year by a greater margin than expected. The report expects the gross profit margins for instant noodles and beverages in the second half of 2024 to increase by 2.1/2.6 percentage points year-on-year, both of which are expected to be better than the first half of the year. In order to maintain market share, the selling expenses ratio in the second half of 2024 may see a slight increase year-on-year, while the management expenses ratio is expected to remain stable year-on-year. At the financial statement level, the company's net profit margin in the second half of 2024 is expected to increase by around 0.4 percentage points year-on-year, considering the one-time gain of approximately 400 million from the sale of assets in 2023, the core net profit margin for the full year is expected to increase by nearly 1 percentage point, with a projected profit of 3.6 billion, better than the mid-year guidance and market expectations.