Effective cost control boost earnings – Tingyi, more commonly known for its Master Kong brand, is a leading producer of instant noodles and beverages in China. The company continued to deliver improving profit despite moderate topline growth. Revenue in 1H26 edged up only 1.1% YoY to RMB40.5bn in a competitive retail environment. However, gross profit rose 5% YoY to RMB14.5bn, and EBITDA grew 3.6% YoY to RMB5.65bn. Adjusted attributable profit, surged 15.2% YoY to RMB2.43bn excluding a RMB160mn one‑off disposal gain. GPM expanded by 130bps YoY to 35.8%, thanks to effective cost‑saving measures while NPM edged up 30bps YoY to 6.0%. The new CEO Mr. Wei Hongcheng, who took office in January 2026 and has since accelerated the “Back to Day 1” transformation, seems to be effective.

Instant noodles business remains resilient – The instant noodles segment, which accounts for 33.9% of total revenue, saw better performance than the beverages segment (65.5% of revenue) in both revenue and margins. Noodles revenue advanced 2.0% YoY to RMB13.7bn, while GPM expanded by 250bps to 30.3%. All major noodle categories contributed positively, with high‑priced packets growing 3.3% YoY and mid‑priced packets growing 2.8% YoY, lifting segment profit by 5.5% YoY to RMB1.0bn. In contrast, the beverages business managed only 0.7% YoY revenue growth despite a 9.1% growth in tea drinks which was largely offset by declines in water (-4.9%), juice (-13%), and carbonates (-2.8%).

Our view: Tingyi’s 1H26 results demonstrated a sustainable trend of profitability enhancement. Looking ahead, Mgt guides FY26 revenue growth at a LSD rate, with better visibility for noodles than for beverages in the second half. The main headwind is PET costs, as the PET price index rose significantly in 1H26, which is likely to compress beverage GPM in 3Q. That said, July and August remain peak seasons for beverage sales and could provide some support to 3Q topline. The stock currently trades at 14x FY26E P/E. (Amelia Deng)