HK Stock Market Move | YIHAI INTL(01579) rises nearly 5% in the morning. Competition in the food supply industry continues to slow down, and the company continues to improve supply chain efficiency.

YIHAI INTL (01579) rose nearly 5% in the morning session, rising 4.19% to HK$14.91 as of the time of publication, with a turnover of 75.0413 million Hong Kong dollars. On the news front, Guotai Haitong's research report pointed out that in recent years, with the weak recovery of the catering industry, the overall demand for the dining supply industry is relatively under pressure, and competition under the demand for market share has intensified. However, the marginal benefits brought by the current price competition have significantly decreased, and leading companies have also been conveying a rational view of competition, while the rebound in the profit margin of the sector in 3Q25 proves this point. As we enter the peak season of 4Q25 and January 26, competition is expected to continue to ease. Looking forward to 2026, the key to a significant improvement in the sector lies in the demand side. If there is not much change in demand, the bottoming period will be prolonged, but if there is a significant improvement, there is hope for a significant optimization. CICC released a research report predicting that YIHAI INTL's revenue/net profit in 2025 will increase by +0.7%/13.9% year-on-year to 6.58 billion yuan/840 million yuan, with a corresponding increase of +1.2%/23.5% in 2H25 revenue/net profit, and profits may outperform market expectations, mainly due to a better-than-expected increase in efficiency benefiting the gross profit margin in 2H25. The bank pointed out that the company has been continuously improving the efficiency of the supply chain since July, with significant results. There have also been adjustments in distributor settlement methods, with an increase in ex-factory prices while providing equal promotional discounts. However, in the actual execution process, the discount intensity is lower than the increase in ex-factory prices, benefiting the gross profit margin. It is expected that the gross profit margin in 2H25 will increase by around 3 percentage points, and both related party and third-party gross profit margins have also improved.