Guojin Securities: Maintaining Zhenjiu Li Du (06979) “Buy” Rating 26H1 Performance Better Than Expected

The Zhitong Finance App learned that Guojin Securities released a research report stating that maintaining the “buy” rating of Zhenjiu Li Du (06979), the company's revenue is expected to be 43.3/48.0/ 5.34 billion yuan from 2026 to 2028, respectively, +18.6%/+11.0%/+11.2% year-on-year; net profit to mother was 8.2/10.1/1.21 billion yuan, respectively, +52.6%/+22.8%/+20.0%, corresponding EPS was 0.24/0.30/0.36 yuan respectively. The company's 26H1 performance was better than expected. The adjustments were mainly equity incentive fees and expenses related to affiliate equity payments.

Guojin Securities's main views are as follows:

Brief performance review

On August 19, 2026, the company disclosed the 2026 interim results. During the period, we achieved revenue of 2,546 billion yuan, +2.0% year on year; net profit to mother of 581 million yuan, +1.0% year on year; adjusted net profit of 626 million yuan, +2.1% year on year. 26H1's performance was better than expected. The adjustments were mainly equity incentive fees and expenses related to affiliate equity payments.

View by product

26H1 Zhenjiu/ Li Du/ Xiangjiao/ Kai Kou Xiao achieved revenue of 13.4/7.9/2.8/0.8 billion yuan respectively, -10%/+29%/+2%/+1%, with sales volume of -12%/+48%/+19%/+24%, tonnage ratio +2%/-13%/-15%/-18%, gross margin +1.4/-1.8/+0.7/-4.6pct, respectively.

The optimization of Zhenjiu's internal structure led to an increase in ASP/gross margin, that is, Dazhen's incremental contribution (launched in June '25) and maintained control of goods before the 15th replacement; Li Du contributed a high increase in the volume of mid-range and sub-high-end products (such as the Li Duwang series, etc.), and the weakening of the internal structure caused the ASP/gross margin to decline. At the same time, Li Du's nationalization went further. The Shandong, Henan, Hebei and Jiangsu regions performed relatively well.

Since the launch of Dazhen, the current payment has exceeded 1.4 billion. The company has further extended the affiliate equity payment plan to Zhen 15; 26H1 disclosed that 2,277.8w shares were awarded to 1,524 eligible affiliates and 1722.3w shares were reserved for 1,214 eligible affiliates that are completing the required procedures; and 2,755 eligible affiliates holding economically beneficial units as of the end of 26H1.

Report structure

1) 26H1's overall gross margin was +0.7 pct to 59.7% year on year, net margin -0.2 pct year on year, and the adjusted net interest rate remained flat at 24.6% year on year; 2) The balance of accrued sales returns and rebate/advance customer payments at the end of 26H1 was 6.7/1.28 billion yuan, respectively, compared to +0.7/-440 million yuan at the end of '25.

Risk Alerts

Policy risks, industry demand recovery falls short of expectations, affiliate model operation falls short of expectations, food safety risks.