1、Asia Pacific Equity Research07 August 2025J P M O R G A NUni-President China(0220)Beverage 1H25 sales/EBIT up 7.6%/25%yoy with margin a new high since 2022;delivery price war intensified,but unlikely to sustain for longOverweight0220.HK,220 HKPrice(06 Aug 25):HK$9.25Price Target(Dec-26):HK$12.20Prio

2、r(Jun-26):HK$11.50Head of Asia Consumer ResearchKevin Yin AC(852)2800-Yibo Wu(852)2800-J.P.Morgan Securities(Asia Pacific)Limited/J.P.Morgan Broking(Hong Kong)LimitedKey Changes(FYE Dec)PrevCurAdj.EPS-25E(Rmb)0.510.54Adj.EPS-26E(Rmb)0.550.58Style ExposureUPCs 1H25 earnings increased 33%yoy(7%beat)on

3、 sales up 10.6%(2%beat),outpacing Tingyis earnings,which were up 11%on sales down 1.3%(per our preview).Beverage was the major growth driver:Sales/EBIT were up 7.6%/25%yoy,contributing 63%/84%of group sales/EBIT in 1H25.The ongoing platform price war has been intensifying competition,especially for

4、the packaged milk tea category.UPC observed worse supply/demand dynamics in July vs.June and believes the irrational price war is not sustainable.Nevertheless,its multi-brand and multi-product strategy plays out in Chinas competitive beverage industry.Beverage EBIT margin expanded 2ppt yoy,to 14.3%i

5、n 1H25,a new high since 2022.The OEM business(i.e.,for PangDongLai,Sams Club)was another highlight,with sales up 160%yoy and an EBIT margin of 11.5%(vs.3.5%for noodles).We forecast UPCs sales/earnings growth at 6.6%/18%in 2H25(vs.Tingyis 0.5%/8.2%)and a 6%/8%CAGR over 2025-27(vs.Tingyis 3%/8%).Assum

6、ing a 100%payout,UPC offers a 6%div.yield(vs.Tingyis 7%).Remain OW with a new Dec-26 PT of HK$12.20(vs.a Jun-26 PT of HK$11.50 previously).Beverage.Sales/EBIT increased 7.6%/25%yoy in 1H25(vs.-1.2%/13%for Tingyi on JPMe).We estimate that sales growth moderated from the low teens(1Q25)to high single