Zhenjiu Lidu Earnings: Expanding Sales and Mix Upgrade Drive Robust Sales Growth

Despite slower economic growth and still-sluggish consumer sentiment in China, narrow-moat Zhenjiu Lidu, or ZJLD, posted strong first-half results, with revenue and adjusted net profit rising 18% and 27% year over year, respectively. The robust growth was within our expectations, which we think is helped by the expanding sales of its core products into national markets, as well as accelerating product mix upgrade. This, along with improving cost efficiency, has further boosted margins and adjusted net profit growth.