Soochow Securities Co., Ltd.: Maintains "Buy" rating on Chacha Food Co., Ltd., cost pressure drags down profits, focus on marginal improvement

Soochow Securities' research report points out that Chacha Food Co., Ltd. is expected to have a net profit attributable to the parent company of 88.64 million yuan in H1 2025, a year-on-year decrease of 73.68%; and a net profit of 11.39 million yuan in Q2 2025, a year-on-year decrease of 88.17%. Cost pressures are dragging down profits, with a focus on marginal improvements. In H1 2025, revenue from sunflower seeds/nuts/other categories reached 1.77 billion/610 million/300 million yuan, with year-on-year changes of -4.4%/-7.0%/-13.8%; Q1 saw a decline due to the timing of the Spring Festival, while Q2 showed marginal improvement in revenue. Future attention should be paid to cost trends and the progress of new product promotions. Currently, there is significant cost pressure on sunflower seeds and nuts, and the Q3 new procurement season will allow observation of sunflower seed raw material price trends. Attention should also be given to new product developments, including the newly launched honey butter-flavored fresh-cut fries and konjac snacks. The company's profit forecast downgrade has already been reflected in the market, maintaining a "buy" rating