China Foods (00506) jumped over 7% in morning trading, rising 7.16% to HK$4.34 with trading volume of HK$43.02 million as of press time.

On the news front, the Shenzhen Stock Exchange announced that China Foods has been added to the Stock Connect eligible list, effective September 8. The company recently released its interim results, reporting first-half revenue of RMB 12.278 billion, up 8.3% year-on-year, and net profit attributable to shareholders of RMB 578 million, up 2.2% year-on-year. The company believes that improvements in resource allocation efficiency have been largely completed and will continue market investment intensity in the second half to promote business expansion.

UBS issued a research report stating that China Foods' first-half revenue growth accelerated, primarily driven by strong performance in soft drinks and energy beverages, as well as recovery in the water category business. Net profit grew only 2% during the period, believed to be affected by intensified industry competition and a weak macroeconomic environment.

UBS noted that China Foods' proprietary vending machines, e-commerce, discount snack stores, and quick commerce emerging channels have contributed approximately 20% of revenue. These new channels provide new revenue sources with profitability comparable to traditional channels, and the firm believes that through channel innovation, the company can support market share growth. UBS maintains a "Buy" rating and raised its target price from HK$4.86 to HK$5.07.