Goldman Sachs: Jonjee Hi-Tech: Slower organic growth and cost pressure accompany third-quarter revenue growth

Where did third-quarter growth come from?

In the third quarter of 2026, the company’s revenue rose 14.8% year on year. Meiweixian sales rose 7% year on year and were broadly flat quarter on quarter, with the year-earlier comparison base still low. Weizimei also continued to contribute inorganic growth from the acquisition.
The company stepped up efforts to restore distributor coverage and optimize its product mix, supporting soy sauce sales. The channel inventory ratio was 2.3 times in the third quarter, up slightly from 2.2 times in the second quarter and still below the company’s threshold of 2.6 times.
Goldman Sachs believes organic growth in core basic condiments was slower than previously expected and therefore cut its 2026–2028 revenue forecasts by 1%–2%.

The company targets double-digit revenue growth in 2027–2029, focusing on compound condiments and strengthening offline channels by bringing in higher-quality distributors, deepening cooperation with key accounts and expanding its foodservice customer base.
In the fourth quarter, the company plans to integrate the distribution networks for basic and compound condiments, coordinate online and offline channels, and manage expenses more precisely, without relying on short-term promotional spending to drive substantial growth in compound condiments.
Management said revenue for the first three quarters of 2026 had reached 97.3% of the full-year budget target, while profit was slightly ahead of the budgeted pace. The company will strive to meet its full-year expectations in the fourth quarter.

Management expects rising soybean costs, implementation of the new national standards, and higher commodity and energy costs to create cost pressure in 2027. Supply-chain integration and upgrades are expected to save approximately 50 million yuan in 2027, partially offsetting that pressure.
The company is evaluating selective price increases in 2027 by region, category and channel. Goldman Sachs noted that the company’s standalone attempt in September 2024 to raise prices on selected soy sauce and chicken bouillon products was unsuccessful, and that it subsequently provided additional subsidies to its distribution channels.

Goldman Sachs raised its 2026–2028 net profit forecasts by 2%–4%: first, it incorporated the benefit of supply-chain cost savings to gross margins in 2027–2028; second, spending on new businesses in 2026 was lower than expected.
The bank nevertheless expects gross margin to decline year on year in 2027: the benefits from locking in costs will expire in the fourth quarter of 2026, while raw material costs face uncertainty over potential increases; some spending on new businesses may also be deferred to 2027 and beyond.
Goldman Sachs expects the expense ratio to rise slightly year on year in the fourth quarter of 2026, reflecting factors including an expanded compound-condiment sales team, promotions for Lunar New Year stocking and the launch of new soy sauce products under the new national standards. The bank raised its 12-month target price from 16.0 yuan to 16.6 yuan and maintained its Sell rating; the share price cited in the report was 18.77 yuan.