Sinolink Securities has reiterated its "Buy" recommendation for ZJLD (06979), citing first-half 2026 performance that surpassed expectations. The brokerage projects the company's revenue to reach RMB 4.33 billion, RMB 4.80 billion, and RMB 5.34 billion for 2026 through 2028, representing year-on-year growth of 18.6%, 11.0%, and 11.2%, respectively. Net profit attributable to shareholders is forecast at RMB 820 million, RMB 1.01 billion, and RMB 1.21 billion for the same period, with corresponding year-on-year increases of 52.6%, 22.8%, and 20.0%. Earnings per share are estimated at RMB 0.24, RMB 0.30, and RMB 0.36 across the three years.
On August 19, 2026, the company disclosed its interim results for the first half of the year. During the period, revenue reached RMB 2.546 billion, up 2.0% year-on-year, while net profit attributable to shareholders rose 1.0% to RMB 581 million. Adjusted net profit grew 2.1% to RMB 626 million. The better-than-expected first-half performance was primarily driven by adjustments related to share-based compensation expenses and payments associated with alliance partner equity interests.
Breaking down performance by product segment in the first half of 2026, ZJLD's core brands delivered mixed results. Zhenjiu generated revenue of RMB 1.34 billion, down 10% year-on-year; Lidu achieved RMB 790 million, up 29%; Xiangjiao posted RMB 280 million, up 2%; and Kaikouxiao contributed RMB 80 million, up 1%. Sales volumes changed by -12%, +48%, +19%, and +24% respectively, while average selling prices shifted by +2%, -13%, -15%, and -18%. Gross margins moved by +1.4 percentage points, -1.8 percentage points, +0.7 percentage points, and -4.6 percentage points across the four brands.
For Zhenjiu, internal product mix optimization drove improvements in both average selling price and gross margin. This was supported by incremental contributions from the Da Zhen series launched in June 2025, alongside controlled supply ahead of the Zhen Fifteen product upgrade. Lidu saw strong volume growth from mid-tier and upper-mid-tier products, such as the Lidu Wang series, though a weaker internal mix led to some pullback in average selling price and gross margin. Nationwide expansion for Lidu continued to gain traction, with particularly strong performance in Shandong, Henan, Hebei, and Jiangsu provinces.
Since the launch of Da Zhen, cumulative payments received have exceeded RMB 1.4 billion. The company has further extended its alliance partner equity payment program to cover Zhen Fifteen. In the first half of 2026, the company granted 22.777 million units to 1,524 qualified alliance partners and reserved 17.223 million units for 1,214 qualified partners still completing required procedures. As of the end of the first half, a total of 2,755 qualified alliance partners held economic benefit units.
From a financial statement perspective, the company's overall gross margin improved by 0.7 percentage points year-on-year to 59.7% in the first half of 2026. Net margin eased 0.2 percentage points to 22.8%, while the adjusted net margin remained flat at 24.6%. At the end of the first half, accrued sales returns and rebates stood at RMB 670 million, while customer advance payments totaled RMB 1.28 billion, representing changes of +RMB 70 million and -RMB 440 million, respectively, compared to the end of 2025.
Key risks include policy changes, slower-than-expected industry demand recovery, underperformance in the alliance partner model, and food safety concerns.