Uni-President China (0220.HK): 1H Results In Line; Negative Read-Through on Tingyi; Positive Read-Through on Nongfu

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05 Aug 2026 12:18:11 ET │ 17 pages

Uni-President China (0220.HK)

1H Results In Line; Negative Read-Through on Tingyi; Positive ReadThrough on Nongfu

CITI'S TAKE

UPC's core NP grew 2% YoY on 1% YoY group sales growth in 1H26 (food:

+5% YoY, beverage: flat YoY), in line with VA consensus. The industry’s

worse-than-expected sugar tea sales slow-down in 2Q26 (vs

continuously strong non-sugar sales growth) provides negative readthrough on Tingyi (Sell, see Citi’s Jun 24 note) and positive read-through

on Nongfu Spring (Buy, see Citi’s 2Q26 preview note on July 27). Despite

UPC’s likely positive sales growth in July-Aug, we expect challenges to

UPC’s 26E full-year sales target (+6-8% YoY). Given current industry

dynamics, we expect Tingyi’s guide-down upon 1H results in coming

weeks. In hindsight, Eastroc (Buy)’s +16%/+15% of 1H sales/NP growth

were respectable (see Citi’s Jul 30 note). Our pecking order in China F&B

sector: Nongfu (Buy) > Eastroc (Buy) > UPC (Buy) > Tingyi (Sell). Please

register for Citi-hosted UPC CFO Group Call at 2:30pm HKT on Aug 6

(registration).

2H26E outlook — Per mgt, UPC’s beverage sales “substantially improved” in July vs

2Q26. Mgt expects positive group sales growth in July-Aug, given its market share

gains, back-end loaded benefit from its 1H26 investment in consumer activation

and a low comp base. UPC’s channel inventory remained healthy; noodle inventory

days declined 2 days YoY and beverage inventory days fell 1 day YoY at end-1H. Per

mgt, some industry peers’ (Tingyi, in our understanding) aggressive promotions in

2Q started to backlash 3Q sales. UPC has maintained its stance to adhere to

disciplined selling expenses and rebates to distributors, without following suits of

competitors’ aggressive promotions. As such, mgt expect YoY stable opex/sales

ratio YoY in full-year 26E. Mgt also anticipate positive movement of some input cost

to offset the negative impact of other raw material (e.g. PET) in 2H and expect YoY

stable GPM in full-year 26E as well.

Buy

Price (05 Aug 26 16:10)

HK$7.34

Target price

HK$11.18

Expected share price return

52.3%

Expected dividend yield

8.1%

Expected total return

60.4%

Market Cap

HK$31,704M

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