Tingyi (0322.HK) 1H26 Review Upgrade to Buy on enhanced core category position, improved operation efficiency amid cost vol...

Equity Research 13 August 2026 | 6:13AM HKT

Tingyi (0322.HK) 1H26 Review: Upgrade to Buy on enhanced core category position, improved operation efficiency amid cost volatility, while noodles segment as backbone for product upgrade/profitability resilience

0322.HK 12m Price Target: HK$14.80 Price: HK$12.29 Upside: 20.4% BUY Leaf Liu We upgrade Tingyi to Buy (from Neutral) following its 1H26 results | Goldman Sachs (Asia) L.L.C. with a margin beat. Our increased confidence is supported by Christina Liu better-than-feared cost management, proven strengthening in core | Goldman Sachs (Asia) L.L.C. SKUs and product innovation to reinforce its market position amid intense competition, and a more attractive valuation with high Valerie Zhou | Goldman Sachs (Asia) L.L.C. dividend yields. Following our downgrade to Neutral on 23 May, Tingyi’s share price declined by as much as 23% at the recent trough level while share price recovered recently on easing PET cost. After Key Data _____________________________________ Market cap: HK$69.2bn / $8.8bn the 1H26 print, we have turned more constructive on the potential Enterprise value: HK$77.9bn / $9.9bn 3m ADTV: HK$225.8mn / $28.8mn for further re-rating, underpinned by the company’s improving China long-term margin expansion visibility (enhanced automation, China Consumer Staples M&A Rank: 3 utilization rate improvement and stronger than expected efficiency Leases incl. in net debt & EV?: Yes

gains amid PET cost pressure) as well as promising growth in new GS Forecast __________________________________ 12/25 12/26E 12/27E 12/28E SKUs with resilient performance from its core noodles and Revenue (Rmb mn) New 79,068.0 80,221.7 81,842.7 83,287.7 sweetened tea businesses despite rising competition. We revise up Revenue (Rmb mn) Old 79,068.0 80,370.5 81,998.2 83,331.2 EBITDA (Rmb mn) 10,606.5 10,867.3 11,352.6 12,049.5 our NP estimates by 7~9% in 2026-28E post results. The stock’s EPS (Rmb) New total return potential is above 20% (our TP upside at c.20% + div EPS (Rmb) Old P/E (X) yield at 8%), while the stock is trading at 13x 2026 P/E on revised P/B (X) 4.1 4.0 3.9 3.8

earnings. Dividend yield (%) 7.3 7.7 8.1 8.8 CROCI (%)

1) Strengthened competitive positioning increases our 12/25 6/26 12/26E --

confidence in sustainable share gains in core categories (esp EPS (Rmb) --

sweetened tea and noodles) with more active new-product GS Factor Profile ______________________________ Growth roll-out: For beverages which was our major concern before the summer season, despite intensified competition in 1H26, Tingyi has Financial Returns

further reinforced its leadership in sweetened tea with 9% sales Multiple

growth (vs. sweentened tea industry growth at MSD% per Kanta) Integrated and even faster scaling in legacy blockbuster Iced Black Tea/Jasmine tea series (both up DD%). We believe the company’s core sweetened Percentile 20th 40th 60th 80th 100th

tea portfolio will continue to gain share in 2H26 and turn more 0322.HK relative to Asia ex. Japan Coverage positive on tea’s growth visibility, based on: i) resilient brand equity 0322.HK relative to China Consumer Staples

that remains largely intact despite a more crowded competitive Source: Company data, Goldman Sachs Research estimates. backdrop; ii) stronger product innovation and See disclosures for details.

category-extension capability in the fast-growing sugar-free tea

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs Tingyi (0322.HK)

Tingyi (0322.HK) Income Statement (Rmb mn) ________________________________ BUY Rating since Aug 13, 2026 12/25 12/26E 12/27E 12/28E Total revenue 79,068.0 80,221.7 81,842.7 83,287.7 Cost of goods sold (51,536.3) (52,067.8) (52,967.4) (53,368.4)…