Konjac resilience and cost tailwinds support China snack stocks; maintain Buy on Yankershop Food and Weilong

Overview

This report is Goldman Sachs' company research commentary on early operating conditions in China's snack sector for 2Q26 and 1H26, with core coverage on Yankershop Food and Weilong Delicious Global Holdings. The report notes that industry performance has diverged during the traditional off-season in 2Q, with traditional channels, e-commerce, and some older product categories showing short-term weakness, while the konjac category, value retail channels, and falling raw material costs are the main positive drivers.

Core views

The core view is that Yankershop Food and Weilong still face pressure in their short-term revenue mix, but a stronger recovery is expected in 2H26. Yankershop Food benefits from value retail, the high-growth konjac category, and full-year price locks for major raw materials, but its e-commerce business is expected to decline about 30% year on year in 2Q and traditional bulk products remain weak. Weilong's offline share in konjac continues to rise, e-commerce is expected to accelerate in 1H26 versus 2H25, but traditional channels and seasoned flour products are temporarily soft due to organizational reform. The report slightly cuts earnings forecasts for both companies by 0% to 2%, but still expects 2H26 net profit to grow about 27% and 12% year on year, respectively.

Analysis framework

The report assesses operating resilience through three main lines: channels, products, and raw materials. First, it tracks value retail store openings and company channel exposure to judge the extent of benefits during the summer peak season. Second, it compares konjac category growth, changes in offline market share, and the degree of weakness in traditional categories. Third, it evaluates the support to margins from declining konjac raw material prices and Yankershop Food's price locks. The valuation section uses a target price framework based on 2027E P/E discounted back to 2026E.

Methodology notes

• Valuation methodP/E target price method

  Determine the target price using a forward price-to-earnings multiple and discount it back to the target year by the cost of equity.

  Yankershop Food's target price of Rmb87 is based on 24x 2027E P/E discounted to end-2026 at a 7.0% cost of equity; Weilong's 12-month target price of HK$14.0 is based on 19x 2027E P/E discounted to 2026 at an 8.6% cost of equity.

• Fundamental frameworkThree-factor analysis of channels, products, and costs

  Assess revenue and profit resilience through growth channels, core products, and input costs.

  The report focuses on value retail store openings, konjac category growth and share changes, weakness in traditional channels, and falling konjac raw material prices to judge the sustainability of earnings recovery in 2H26.

• Disclosure frameworkGS Factor Profile

  Goldman Sachs' internal framework for comparing stocks on growth, financial returns, valuation multiples, and composite attributes.

  The report discloses that this framework uses standardized rankings of indicators including sales, EBITDA, EPS, ROE, ROCE, CROCI, and P/E to evaluate covered stocks, but the main investment conclusions in this report are primarily centered on channels, categories, costs, and target prices.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Yankershop Food (002847.SZ)

  Covered company; Buy rating

  Strengths

  High-30% exposure to value retail, konjac growth expected to exceed 30%, most major raw materials locked in for the full year, and target price of Rmb87 maintained.

  Weaknesses

  2Q e-commerce is expected to decline about 30% year on year, traditional bulk products remain weak, and the short-term revenue mix is under pressure.

  Comparison

  Currently at about 18x 2026E P/E, higher than Weilong's 11x, but the report expects 2H26 net profit to grow about 27% year on year.

  Risks

  Intensifying competition in the snack industry, slower-than-expected store openings at value discount stores, and higher-than-expected raw material costs.

• Weilong Delicious Global Holdings (9985.HK)

  Covered company; Buy rating

  Strengths

  Mid-30% exposure to value retail, offline konjac share reaching 52.9%, e-commerce expected to accelerate in 1H26 versus 2H25, and benefits from lower konjac costs.

  Weaknesses

  Soft sales in traditional channels, year-on-year decline in seasoned flour products, and short-term disruption to sales from organizational reform.

  Comparison

  Currently at about 11x 2026E P/E with about a 5% dividend yield; target price of HK$14.0 maintained.

  Risks

  Competition above expectations, elevated channel development expenses, slower-than-expected expansion in discount stores and convenience mom-and-pop stores, and unfavorable raw material costs.

Key data

• Quarter-to-date share price performance of covered snack stocksDown by as much as about 9%As of the report date, 2Q is the industry's traditional off-season.
• Progress of value retail store openingsGross store openings across systems exceeded about 2,500 year to dateAhead of Goldman Sachs' full-year target of 4,000 to 5,000 store openings, implying about 34% to 41% year-on-year average store count growth.
• Sales exposure to value retailYankershop Food at high-30%; Weilong at mid-30%The report believes both companies are well positioned for the summer peak season.
• Expected growth in the konjac categoryYankershop Food above 30%; Weilong about 20% year-on-year growthThis reflects an early judgment for 2Q or 1H26.
• Offline konjac market shareWeilong/Yankershop Food at 52.9%/11.0%As of April 2026, higher than 51.9%/8.3% in the prior year.
• Konjac raw material costDown about 25% from the peakThe report expects the downtrend may continue into 2H26, improving margins.
• Earnings revisionsYankershop Food/Weilong earnings slightly cut by 0% to 2%Weilong was cut by about 2%, mainly reflecting softer sales in traditional channels.
• 2H26 net profit expectationYankershop Food about 27% year on year; Weilong about 12% year on yearBenefiting from growth in emerging channels, reduced disruption from business adjustments, and cost tailwinds.
• ValuationYankershop Food at 18x 2026E P/E; Weilong at 11x 2026E P/EWeilong also offers about a 5% dividend yield, based on a 60% payout ratio.
• Target priceYankershop Food Rmb87; Weilong HK$14.0Both companies maintain Buy ratings.

Impact & implications

The investment implication is that short-term 2Q data may still be mixed, but market concerns over weakness in traditional channels and some products may be offset by konjac growth, expansion of value retail, and falling costs. If value retail channels maintain their store opening pace in 2H26, konjac demand and share gains continue, and raw material prices keep declining, there remains meaningful room for earnings recovery and valuation re-rating for both companies.

Risks

• Competition in the snack industry intensifies, especially from private-label and direct-to-consumer retail competitors.
• Value discount retail store openings are slower than expected, weakening growth momentum in emerging channels.
• Traditional channels, bulk products, or seasoned flour products remain weak, dragging on revenue recovery.
• Raw material costs are higher than expected or the downtrend in konjac costs reverses, compressing margins.
• Weilong's channel reform and channel development expenses come in above expectations, affecting short-term earnings delivery.

What to watch

• Whether value retail store openings in 2H26 can continue at a pace ahead of the full-year target.
• Whether Yankershop Food's e-commerce business can shift from an about 30% year-on-year decline in 2Q to year-on-year growth in 2H26.
• The recovery pace of Weilong's traditional channels and seasoned flour products after organizational reform.
• Whether the revenue contribution, offline share, and competitive intensity of konjac products continue to improve.
• Whether konjac raw material prices continue to fall from their peak and are actually reflected in gross margin.