Company Reports

Tingyi is a leading packaged food and beverage producer in China, with the number-one market share in instant noodles and ready-to-drink tea. Apart from its own Master Kong brand, the company sells and distributes PepsiCo’s carbonated soft drinks and Gatorade in China. Tingyi’s portfolio primarily targets the mass market of convenience food and RTD beverages. Through its widespread point-of-sale coverage in the country, the company profits from economies of scale enabled by its nationwide distributors (80% of total sales).

Tingyi's first-half revenue rose 1% year over year, while net profit grew 7%, supported by a 1.3-percentage-point expansion in gross margin to 35.8%.

We review our 2026 forecasts for Tingyi and Nongfu Spring ahead of their interim results in August.

Tingyi is a leading packaged food and beverage producer in China, with the number-one market share in instant noodles and ready-to-drink tea. Apart from its own Master Kong brand, the company sells and distributes PepsiCo’s carbonated soft drinks and Gatorade in China. Tingyi’s portfolio primarily targets the mass market of convenience food and RTD beverages. Through its widespread point-of-sale coverage in the country, the company profits from economies of scale enabled by its nationwide distributors (80% of total sales).

Tingyi's 2025 net profit increased 21% year on year thanks to favorable input costs. However, revenue fell 2%, dragged by the beverage segment, as the company's ready-to-drink beverage sales were pressured by subsidies for fresh tea products on e-commerce platforms.

Tingyi is a leading packaged food and beverage producer in China, with the number-one market share in instant noodles and ready-to-drink tea. Apart from its own Master Kong brand, the company sells and distributes PepsiCo’s carbonated soft drinks and Gatorade in China. Tingyi’s portfolio primarily targets the mass market of convenience food and RTD beverages. Through its widespread point-of-sale coverage in the country, the company profits from economies of scale enabled by its nationwide distributors (80% of total sales).

Demand in the ready-to-drink tea sector during the summer peak season was impaired by aggressive subsidies on fresh tea offered by delivery platforms, pressuring the results of industry leaders, including Tingyi.

Tingyi reported its first-half 2025 results, with revenue declining 2% year on year, but net income rose 20%.

Tingyi is a leading packaged food and beverage producer in China, with the number-one market share in instant noodles and ready-to-drink tea. Apart from its own Master Kong brand, the company sells and distributes PepsiCo’s carbonated soft drinks and Gatorade in China. Tingyi’s portfolio primarily targets the mass market of convenience food and RTD beverages. Through its widespread point-of-sale coverage in the country, the company profits from economies of scale enabled by its nationwide distributors (80% of total sales).

Tingyi is a leading packaged-food and beverage producer in China, with the number-one market share in instant noodles and ready-to-drink tea. Apart from its own Master Kong brand, the company sells and distributes PepsiCo’s carbonated soft drinks and Gatorade in China. Tingyi’s portfolio primarily targets the mass market of convenience food and RTD beverages. Through its widespread point-of-sale coverage in the country, the company profits from economies of scale enabled by its nationwide distributors (80% of total sales).

We review our 2025 earnings forecasts for Tingyi ahead of the release of its interim results.

Narrow-moat Tingyi’s 2024 net income grew 20% year on year to CNY 3.73 billion, exceeding our forecast despite revenue coming in below expectation. Price hikes and reduced promotions resulted in better selling prices to distributors, driving stronger gross margin. After revisiting our assumptions, we keep our fair value estimate unchanged at HKD 12.70 per share. We raised our 2025 net profit forecast by 5% but lowered 2026-28 estimates by 2% to 8% due to higher tax rates and lower nonoperating income. We view shares as fairly valued, underpinned by a solid 5.9% 2025 dividend yield.

Tingyi is a leading packaged-food and beverage producer in China, with the number-one market share in instant noodles and ready-to-drink tea. Apart from its own Master Kong brand, the company sells and distributes PepsiCo’s carbonated soft drinks and Gatorade in China. Tingyi’s portfolio primarily targets the mass market of convenience food and RTD beverages. Through its widespread point-of-sale coverage in the country, the company profits from economies of scale enabled by its nationwide distributors (80% of total sales).

We reviewed our earnings forecasts for narrow-moat Tingyi ahead of its results announcement in late March. We slightly raised our 2024 net income estimate by 2% to CNY 3.54 billion, reflecting benefits from lower input costs. Our longer-term earnings forecasts remain largely unchanged. Hence, we maintain our fair value estimate for Tingyi at HKD 12.70 per share, which implies 18 times 2025 price/earnings and 8 times enterprise value/EBITDA. We see shares as fairly valued with a decent 2025 dividend yield of 5.6%.

We moderately lower narrow-moat Tingyi’s 2024 revenue and net income forecasts by 1% and 4% respectively, to factor in a softer sales volume expectation and a higher selling expenses ratio. We still expect a 12% year-on-year increase in net profit for 2024, which is within management’s guidance range of 10%-15%. The company is focusing on price hikes for its instant noodle products and we think more marketing expenses are needed in 2024 to offset the adverse impact on demand. We also lift our 2025 selling expenses ratio to account for the additional channel expenditures associated with price hikes, which leads to a 6% cut to our net profit forecast. However, we retain our fair value estimate at HKD 12.70 per share, as longer-term earnings forecasts are largely unchanged. We view shares as undervalued now, supported by a 2025 dividend yield of over 7%.

Tingyi is a leading packaged-food and beverage producer in China, with the number-one market share in instant noodles and ready-to-drink tea. Apart from its own Master Kong brand, the company sells and distributes PepsiCo’s carbonated soft drinks and Gatorade in China. Tingyi’s portfolio primarily targets the mass market of convenience food and RTD beverages. Through its widespread point-of-sale coverage in the country, the company profits from economies of scale enabled by its nationwide distributors (80% of total sales).

While narrow-moat Tingyi’s first-half 2024 revenue trailed our estimate, net profit exceeded our forecast thanks to better-than-expected gross margin and lower-than-expected operating expenses. An input cost tailwind and positive mix shift were major drivers of gross margin expansion across food and beverage segments. We lifted our 2024-25 net income estimates by 6%-7% to account for better gross margin but left our longer-term forecasts largely unchanged. We retain our fair value estimate at HKD 12.70 per share, which implies 19 times 2024 price/earnings, 8 times enterprise value/EBITDA, and a 5.3% dividend yield. Although management lowered its 2024 revenue growth guidance to low single digits, this is consistent with our estimate. Positively, Tingyi reiterated its 2024 dividend payout ratio target of 100%, which implies a 7% dividend yield based on the current share price. We continue to see the shares as undervalued.

Tingyi is a leading packaged-food and beverage producer in China, with the number-one market share in instant noodles and ready-to-drink tea. Apart from its own Master Kong brand, the company sells and distributes PepsiCo’s carbonated soft drinks and Gatorade in China. Tingyi’s portfolio primarily targets the mass market of convenience food and RTD beverages. Through its widespread point-of-sale coverage in the country, the company profits from economies of scale enabled by its nationwide distributors (80% of total sales).

We reviewed our 2024 estimates for narrow-moat Tingyi ahead of the release of its interim results. We think the company would still face headwinds in instant noodles sales due to sluggish consumer sentiment and reduced consumption by migrant workers. However, we expect these to be offset by stronger growth in the beverage segment. As such, our 2024 revenue and profit projections are unchanged. We retain our fair value estimate at HKD 12.70 per share, which implies 20 times 2024 price/earnings, 9 times enterprise value/EBITDA, and 4.9% dividend yield. We think the current share price is undervalued, supported by an attractive dividend yield of 6.5%.

Tingyi is a leading packaged food and beverage producer in China, with the number-one market share in instant noodles and ready-to-drink tea. Apart from its own "Master Kong" brand, the company also sells and distributes PepsiCo’s carbonated soft drinks and Gatorade in China. Tingyi’s portfolio primarily targets the mass market of convenience food and RTD beverages. Through its widespread point-of-sale coverage in the country, the company profits from economies of scale enabled by its nationwide distributors (80% of total sales).