Core Viewpoint - UBS has raised the target price for Gu Ming (01364.HK) to HKD 31.15 while maintaining a "Buy" rating, citing strong same-store sales growth and an aggressive store opening plan as key factors for the positive outlook [1] Group 1: Company Performance - Gu Ming has achieved approximately 10% same-store sales growth this year, exceeding UBS's previous estimates [1] - The company's store opening plan is set to reach between 1,500 to 2,000 locations, which is also better than prior expectations [1] - The strong performance is attributed to product innovation and subsidies from JD.com in food delivery [1] Group 2: Valuation and Forecast - UBS has increased its earnings forecast for Gu Ming, projecting it to be 4% to 14% higher than market peers [1] - The target price adjustment from HKD 19.28 to HKD 31.15 is based on a discounted cash flow (DCF) valuation method [1] - The new target price corresponds to forecasted price-to-earnings ratios of 34 times and 27 times for 2025 and 2026, respectively, with a dynamic P/E ratio of 1.4 times for 2025, which is lower than the average P/E ratios of 43 times and 35 times for new consumption peers [1]

Investment Rating - The report gives a "Buy" rating for the company, Guming (1364.HK) [5][13]. Core Viewpoints - Guming is a leading affordable fresh tea beverage brand with multiple advantages, having expanded from Zhejiang to nationwide coverage with over 9,914 stores across 200 cities by the end of 2024 [1][25]. - The company has a strong supply chain and unique channel strategies that support rapid growth, particularly in lower-tier cities, where the market potential is significant [2][11]. - Guming's average quarterly repurchase rate reached 53% in 2023, significantly higher than the industry average of less than 30% [25][60]. Summary by Relevant Sections Company Overview - Guming has been deeply involved in the fresh tea beverage market for over a decade, establishing a strong presence in lower-tier cities and towns, which are expected to see a CAGR of over 20% from 2024 to 2028 [1][2]. - The company operates a franchise model that has attracted many franchisees due to high single-store profitability, facilitating rapid store expansion [2][11]. Market Potential - The fresh beverage market in China is projected to exceed 600 billion yuan in 2024, with the fresh tea beverage segment being the largest, estimated at over 300 billion yuan [1][52]. - The report highlights that the affordable price segment is expected to grow at a CAGR of 20.8% from 2024 to 2028, indicating strong demand for Guming's offerings [1][55]. Financial Projections - The company is expected to achieve net profits of 1.96 billion yuan, 2.36 billion yuan, and 2.76 billion yuan for the years 2025, 2026, and 2027, respectively, with corresponding EPS of 0.82, 0.99, and 1.16 yuan [3][4]. - Guming's revenue is projected to grow from 7.68 billion yuan in 2023 to 15.26 billion yuan by 2027, reflecting a robust growth trajectory [4][8]. Competitive Advantages - Guming's supply chain is identified as a core competitive advantage, enabling the company to offer high-quality products at competitive prices while quickly responding to market demands [2][11]. - The company has implemented a regional density strategy that enhances brand recognition and customer loyalty, further driving sales growth [25][60]. Expansion Plans - Guming plans to increase its store count by 2,000 in 2025, focusing on regions such as Anhui, Hubei, Hunan, Guangdong, and Guangxi, with a long-term goal of reaching 20,000 stores [2][11]. - The introduction of coffee products is expected to contribute positively to store revenues, with sales growth of approximately 10% per store [2][11].

Group 1 - Non-alcoholic beverage stocks in Hong Kong showed strong performance in the afternoon session [1] - Cha Bai Dao (02555.HK) and Gu Ming (01364.HK) both increased by over 7% [1] - Mi Xue Group (02097.HK) rose by more than 4%, while Uni-President China (00220.HK) gained over 2% [1]

Group 1 - Goldman Sachs reported that since JD Group announced a 10 billion RMB takeaway subsidy plan on April 11, the average stock price of the covered ready-to-drink beverage companies has increased by 39% [1] - The takeaway orders from JD are significantly directed towards ready-to-drink brands, with Luckin Coffee and Kudi Coffee leading in order volume, followed by major ready-to-drink tea brands [1] - Channel surveys indicate that participating stores in promotional activities may see their order volume more than double, with the impact varying based on brand participation strategies, pricing, and delivery proportions [1] Group 2 - Goldman Sachs raised the earnings forecasts for Gu Ming and Mi Xue Bing Cheng for 2025 to 2027 by 5% to 9%, reflecting faster store expansion and stronger merchandise transaction growth [1] - The expected price-to-earnings ratio for Gu Ming in 2026 has been adjusted from 20 times to 26 times, still about 20% lower than the industry leader Mi Xue Bing Cheng [1] - The target price for Gu Ming has been increased from 21 HKD to 29.2 HKD, maintaining a "Buy" rating [1] Group 3 - Goldman Sachs also raised the earnings forecasts for Mi Xue Bing Cheng for 2025 to 2027 by 2% to 3%, reflecting faster store expansion and steady growth in merchandise transaction value in the Chinese market [2] - The expected price-to-earnings ratio for Mi Xue Bing Cheng in 2026 has been adjusted from 26 times to 32 times, with the target price increased from 484 HKD to 597 HKD, maintaining a "Buy" rating [2]

Core Insights - The article highlights the contrasting business models of tea beverage brands in China, with a focus on the shift from self-operated models to asset-light franchise operations, exemplified by brands like Mixue and Bawang Chaji [1][29]. Business Models - Mixue and other emerging brands like Gu Ming, Hu Shang A Yi, and Cha Bai Dao primarily adopt a franchise model for rapid expansion, generating revenue mainly from supplying products and equipment to franchisees rather than from franchise fees [1][2]. - In contrast, traditional franchise models, such as McDonald's, rely heavily on rental income and franchise fees, providing a safety net even if franchisees perform poorly [2]. Marketing Strategies - Mixue employs social media and various offline activities to engage consumers, with a marketing expenditure of 1.599 billion RMB in 2024, representing 6.44% of total revenue [3][4]. - Gu Ming's marketing spending surged by 42.43% to 479 million RMB, accounting for 5.45% of its revenue [5][6]. - Hu Shang A Yi focuses on a multi-channel marketing approach, with a marketing budget of 394 million RMB, which is 12.0% of its revenue [7][9]. - Cha Bai Dao's marketing expenses increased by 201.64% to 395 million RMB, making up 8.03% of its revenue, reflecting the competitive landscape [10][11]. - Bawang Chaji's marketing costs skyrocketed by 323.96% to 1.109 billion RMB, constituting 8.94% of its revenue, indicating aggressive promotional efforts [12]. Store Expansion - Mixue has expanded to 46,500 stores globally, with a significant presence in lower-tier cities, where 51.33% of its stores are located [13][14]. - Gu Ming has established a presence in 17 provinces, with 80% of its stores in second-tier and below cities, indicating a focus on untapped markets [15][16]. - Hu Shang A Yi operates 9,176 stores across various regions, with 50.4% in lower-tier cities, and has begun international expansion [18][19]. - Cha Bai Dao has increased its store count in lower-tier cities, with plans for further expansion and improved logistics [22]. - Bawang Chaji has rapidly expanded to 6,440 stores, with a notable presence in East China, but faces challenges in maintaining growth [23][24]. Franchisee Retention - The article discusses the importance of franchisee retention rates as a measure of brand attractiveness, with Mixue showing a lower franchisee turnover rate compared to its competitors [26][28]. - Mixue's franchisee turnover rate is approximately 6.97%, while Gu Ming, Hu Shang A Yi, and Cha Bai Dao report significantly higher rates of 18.88%, 19.47%, and 20.66%, respectively [28]. Conclusion - The article concludes that the new tea beverage brands are reshaping the industry with a franchise ecosystem that emphasizes supply chain efficiency over traditional rental models [29]. - Mixue stands out for its effective low-cost marketing strategy, while Bawang Chaji's aggressive expansion raises questions about sustainable growth [29].

Group 1 - The Hang Seng Index fell by 0.55%, down 131 points, closing at 23,695 points, while the Hang Seng Tech Index decreased by 0.66% [1] - The early trading volume in Hong Kong stocks reached HKD 1,076 million [1] - Robot-related stocks were active, with DCH Holdings (00179) rising nearly 6% and SUTENG (02498) increasing over 2% due to the upcoming CMG World Robot Competition [1] Group 2 - Eucan Vision Bio-B (01477) surged over 18% after OT-703 was approved for real-world research in Boao, Hainan [2] Group 3 - Smoore International (06969) rose over 5% as Glo Hilo is set to launch in Japan, with positive feedback from the trial market for heated non-combustible products [3] - Youjia Innovation (02431) increased over 5% after its L4 autonomous driving minibus received project designation, following a series of product showcases at the Shanghai Auto Show [3] Group 4 - Maanshan Iron & Steel (00323) saw a rise of over 7% as the steel industry showed improving performance in Q1, with institutions noting a marginal improvement in the sector's fundamentals [4] - InnoCare Pharma (02577) surged over 15% due to a partnership with NVIDIA for the next-generation 800V power architecture, drawing attention to third-generation semiconductors [4] Group 5 - Gu Ming (01364) increased by 4.5%, reaching a new high, with expectations of being included in the Hong Kong Stock Connect next month and a projected net increase of over 2,000 stores for the year [5] Group 6 - Dekang Agriculture and Animal Husbandry (02419) rose over 7%, with stock prices hitting a new high as institutions are optimistic about the company's valuation recovery potential [6] Group 7 - Gome Retail (06808) saw an early rise of nearly 7%, reporting a turnaround with a profit of RMB 410 million for the year, while Dehong Capital will promote the development of various store formats [7] - New Town Development (01030) fell over 3% amid reports of plans to issue guaranteed bonds domestically, aiming to raise RMB 1.5 to 2 billion [7] - Alibaba Health (00241) dropped over 4%, despite a year-on-year profit increase of over 62%, with analysts stating that profits did not meet expectations [7]

Group 1 - The HuRun Research Institute released the "2025 HuRun China New Tea Beverage Brand TOP 20," featuring brands like Mixue Ice City, Gu Ming, and Heytea [1] - Chinese companies account for over half of the 47 food and beverage enterprises on the global unicorn and future unicorn list, with 26 brands, including new tea beverage brands [1] - The new tea beverage industry has deeply integrated into the Chinese tea industry chain, with the tea used by these brands accounting for nearly 10% of China's total tea production [1] Group 2 - The global ready-to-drink beverage market is expected to grow at a compound annual growth rate (CAGR) of 7.2% from 2023 to 2028, reaching a market size of $1,103.9 billion by 2028 [1] - China and Southeast Asia are projected to be the fastest-growing markets during 2023-2028, with respective CAGRs of 17.6% and 19.8%, contributing nearly 40% of the global market growth [1] - On May 8, Heytea successfully listed on the Hong Kong Stock Exchange, while Green Tea Group initiated its IPO on the same day, indicating a trend of mainland restaurant companies pursuing dual strategies of opening stores and listing in Hong Kong [1] Group 3 - Notable brands like Mixue Group, Haidilao, and Green Tea Group are among those aiming for IPOs in Hong Kong, leveraging the market for international experience and capital [2] - Mixue Ice City has established its leading position in the competitive ready-to-drink beverage market through supply chain scale effects and a strong brand image [2] Group 4 - Relevant companies in the tea beverage industry listed on the Hong Kong Stock Exchange include Mixue Group (02097), Cha Bai Dao (02555), Heytea (02589), Gu Ming (01364), Nai Xue's Tea (02150), and Green Tea Group (06831) [3]

Group 1 - The Hang Seng Composite Index will include companies Bruker (00325.HK), Gu Ming (01364.HK), and Mixue Ice City (02097.HK) [1]

Group 1 - Non-alcoholic beverage stocks in Hong Kong experienced a significant upward trend, with Andeli Juice (02218.HK) rising over 47% [1] - Unified Enterprises China (00220.HK) saw an increase of nearly 9.5% [1] - Tea Baidao (02555.HK) rose by nearly 9% [1] - Juxing Legend (06683.HK) increased by over 4% [1] - Both Guming (01364.HK) and Mixue Group (02097.HK) saw a rise of 2% [1]

Group 1 - Non-alcoholic beverage stocks in Hong Kong experienced a significant rally in the afternoon session [1] - Andeli Juice (02218.HK) surged over 75%, indicating strong market interest [1] - Cha Bai Dao (02555.HK) rose more than 20%, reflecting positive investor sentiment [1] Group 2 - Nongfu Spring (09633.HK) increased nearly 8%, contributing to the overall sector growth [1] - China Resources Beverage (02460.HK), Gu Ming (01364.HK), and Mixue Group (02097.HK) all saw gains exceeding 3.5% [1]