Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company is positioned as a leading brand in the mid-priced tea beverage market, focusing on fresh and high-quality products while expanding its store network in lower-tier cities [8][14] - The company has a robust supply chain and logistics system, which supports its operational efficiency and product freshness, contributing to its competitive advantage [8][39] - The mid-priced tea beverage market is expected to grow significantly, with the company projected to increase its market share and store count in the coming years [8][14] Summary by Sections 1. Company Overview - The company is the largest mid-priced tea beverage brand in China, with a focus on fruit tea, milk tea, and coffee [14] - As of the first half of 2025, the company has 11,179 stores and a terminal GMV of 22.4 billion RMB [14][15] - The company employs a unique regional strategy to optimize its store distribution and supply chain efficiency [14][24] 2. Product Strategy - The company emphasizes a product logic of "fresh and high-quality," with a focus on frequent product updates and maintaining consistent quality [39] - The menu typically features around 30 SKUs, with a pricing strategy that keeps most products under 15 RMB [40][50] - The company has successfully captured consumer trends and adapted its offerings accordingly, leading to strong sales performance [49][51] 3. Market Dynamics - The domestic ready-to-drink tea market is expected to exceed 500 billion RMB during the 14th Five-Year Plan period, with a CAGR of nearly 15% [8][39] - The company is well-positioned to benefit from market consolidation opportunities within the mid-priced segment [8][39] - Consumer repurchase rates are critical for market share, and the company has demonstrated strong performance in this area due to its supply chain and operational management [8][39] 4. Financial Projections - The company is projected to achieve adjusted net profits of 2.19 billion, 2.50 billion, and 2.88 billion RMB for the years 2025 to 2027, representing year-on-year growth rates of 44%, 14%, and 15% respectively [1][8] - The report maintains previous profit forecasts, with corresponding P/E ratios of 24, 21, and 18 times for the same period [1][8]

Core Viewpoint - The Hong Kong stock market has seen a decline in new consumption concept stocks, with several companies experiencing significant drops in their stock prices [1][2]. Group 1: Stock Performance - Wei Long Mei Wei (卫龙美味) fell by 6.72%, with a latest price of 12.220 and a market capitalization of 29.709 billion [2]. - Bluestone (布鲁可) decreased by 5.91%, priced at 97.950, with a total market value of 24.37 billion [2]. - Naixue's Tea (奈雪的茶) dropped by 5.65%, trading at 1.170, and has a market cap of 1.995 billion [2]. - Hu Shang A Yi (沪上阿姨) saw a decline of 5.57%, with a price of 111.900 and a market capitalization of 11.772 billion [2]. - Miniso (名创优品) decreased by 5.51%, priced at 41.880, with a total market value of 51.164 billion [2]. - Pop Mart (泡泡玛特) fell by 5.14%, trading at 273.400, with a market cap of 367.161 billion [2]. - XPeng Motors (小鹏汽车-W) decreased by 4.77%, with a latest price of 78.850 and a market capitalization of 150.328 billion [2]. - Mixue Group (密雪集团) dropped by 4.68%, priced at 423.400, with a market cap of 160.731 billion [2]. - Gu Ming (古茗) saw a decline of 4.66%, trading at 24.120, with a total market value of 57.362 billion [2]. - Shangmei Co., Ltd. (上美股份) decreased by 4.74%, with a price of 95.550 and a market capitalization of 38.039 billion [2].

Core Viewpoint - The new consumption concept stocks in Hong Kong have shown a significant upward trend, indicating positive market sentiment and potential growth in this sector [1]. Group 1: Stock Performance - Shangmei Holdings (02145.HK) increased by 7.43%, reaching HKD 101.2 [1] - Guming (01364.HK) rose by 7.33%, trading at HKD 26.08 [1] - Mixue Group (02097.HK) saw a gain of 6.53%, priced at HKD 443.8 [1] - Miniso (09896.HK) climbed by 5.15%, with a share price of HKD 45.32 [1] - Blukoo (00325.HK) experienced a 4.99% increase, valued at HKD 107.4 [1] - Laopu Gold (06181.HK) grew by 4.04%, trading at HKD 721 [1]

Core Viewpoint - The new consumption concept stocks have generally risen, indicating a positive market sentiment towards consumer-driven sectors amid external economic challenges in China [1] Group 1: Stock Performance - Upme Holdings (02145) increased by 7.43%, trading at 101.2 HKD [1] - Gu Ming (01364) rose by 7.33%, reaching 26.08 HKD [1] - Mixue Group (02097) saw a 6.53% increase, priced at 443.8 HKD [1] - Miniso (09896) gained 5.15%, with a price of 45.32 HKD [1] - Blukoo (00325) went up by 4.99%, trading at 107.4 HKD [1] - Laopu Gold (06181) increased by 4.04%, priced at 721 HKD [1] Group 2: Market Insights - Cathay Securities highlighted the increasing importance of boosting domestic consumption due to greater external disturbances [1] - The firm anticipates that the role of consumption in driving economic growth will strengthen under policy support [1] - Despite a short-term overheating in some areas of the Hong Kong new consumption sector, the macro trend towards personalized and rational consumer behavior remains unchanged [1] - The firm expects continued growth in consumption related to self-indulgence and cost-effectiveness, particularly in sectors like trendy toys, beauty care, and pet products [1]

Core Viewpoint - The new consumption concept stocks in Hong Kong have generally risen, indicating a positive market sentiment towards consumer-related sectors amid external uncertainties in China [1] Group 1: Stock Performance - Upme Holdings (02145) increased by 7.43%, reaching HKD 101.2 [1] - Gu Ming (01364) rose by 7.33%, trading at HKD 26.08 [1] - Mixue Group (02097) saw a 6.53% increase, priced at HKD 443.8 [1] - Miniso (09896) gained 5.15%, with a price of HKD 45.32 [1] - Blukoo (00325) went up by 4.99%, now at HKD 107.4 [1] - Laopu Gold (06181) increased by 4.04%, trading at HKD 721 [1] Group 2: Market Insights - Cathay Securities highlighted the increasing importance of boosting domestic consumption due to greater external disturbances [1] - The firm anticipates that the role of consumption in driving economic growth will strengthen under policy support [1] - Despite a short-term overheating in some areas of Hong Kong's new consumption sector, the macro trend towards personalized and rational consumer behavior remains unchanged [1] - The firm expects continued growth in self-indulgent and cost-effective consumption categories, such as trendy toys, beauty care, and pet products [1]

Core Viewpoint - The Hong Kong stock market is experiencing a surge in new consumption concept stocks, indicating positive investor sentiment in this sector [1] Group 1: Stock Performance - Gu Ming (01364.HK) increased by 6.91% [1] - Blucoco (00325.HK) rose by 5.96% [1] - Mixue Group (02097.HK) saw a gain of 5.38% [1] - Pop Mart (09992.HK) climbed by 3.88% [1] - Laopu Gold (06181.HK) grew by 3.32% [1]

Investment Rating - The industry investment rating is maintained as "Positive" [5] Core Insights - The holiday data continues to validate the resilience of cultural and tourism consumption, with both short-term catalysts and mid-term growth logic present [3] - During the National Day and Mid-Autumn Festival holiday, domestic travel reached 888 million trips, with total spending of 809 billion yuan, indicating stable tourism activity and resilient travel demand [8] - The integration of cultural and tourism consumption is highlighted, with key retail and catering enterprises seeing a sales increase of 2.7% year-on-year during the holiday period [8] Summary by Sections Holiday Data Performance - The holiday period saw 888 million domestic trips, averaging 111 million trips per day, a year-on-year increase of 1.6% [8] - Total domestic travel expenditure was 809 billion yuan, averaging 101.1 billion yuan per day, with a year-on-year increase of 1.0% [8] - Cross-regional personnel flow reached 2.432 billion trips, averaging 304 million trips per day, a historical high with a year-on-year increase of 6.2% [8] Scenic Area Performance - Scenic areas generally experienced increased visitor numbers, with Emei Mountain receiving 371,000 visitors, a 41.3% increase [8] - The overall performance of Xinyuan Cultural Tourism's scenic areas reached a historical high, with 1.655 million visitors and revenue of 98.4 million yuan, marking a 20% increase [8] Duty-Free and Outbound Tourism - Hainan's duty-free shopping amounted to 944 million yuan, a 13.6% increase, with 122,900 shopping trips, indicating a recovery in outbound tourism [8] - Nationally, outbound travel reached 16.34 million trips, an 11.5% increase, with significant growth in foreign visitors [8] Consumer Behavior Trends - The holiday period exhibited three main characteristics: parallel long-distance and nearby travel, expansion of nighttime and experiential consumption, and more efficient transportation operations [8] - The integration of cultural and tourism sectors continues to drive growth, with a focus on enhancing travel experiences and innovative sales strategies [8]

Summary of Gu Ming's Conference Call Company Overview - **Company**: Gu Ming - **Industry**: Beverage (Tea and Coffee) Key Points and Arguments Sales Performance and Growth - Gu Ming expects same-store sales to grow in Q4, driven by reduced delivery subsidies, new product launches, and a low base from last year due to delivery price increases [2][3] - In January to September 2025, actual revenue for franchisees increased year-on-year, but the growth rate was lower than that of GMV [2][5] - The company achieved a 20% growth rate in 2025, with Q3 also showing strong performance [24] Franchisee Profitability - Franchisees' actual revenue has been increasing, but profit margins are under pressure due to high delivery ratios and low actual revenue rates [4][21] - The delivery revenue rate is around 60%, while non-delivery remains stable at 85% [4] - Gu Ming is focusing on improving dine-in sales to enhance franchisee profitability [4][18] Expansion Plans - The company aims to reach 20,000 stores by 2027, with a target of opening approximately 3,000 new stores in 2026 [2][7][11] - Despite the competitive delivery market, franchisee willingness to open new stores has declined since May 2025 [8][9] - Gu Ming plans to expand in existing regions and invest more resources in new areas like Guangdong and Guangxi [9][10] Product Strategy - New product launches, including hot drinks and coffee, are being introduced to adapt to seasonal changes, especially in northern markets [12][17] - The company has over 10,000 coffee outlets and aims to increase user retention and purchase frequency through promotional activities [23] Market Dynamics - The competitive landscape includes ongoing delivery wars among platforms like Ele.me, Taobao, and Meituan, affecting franchisee revenue [4][15] - Gu Ming does not plan to initiate price wars but will respond to competitive pressures as necessary [28] Seasonal Adjustments - The company has introduced seasonal products to address winter demand, such as hot drinks and specific tea varieties [12][17] - Sales of fruit tea are higher in summer, while milk tea sales increase in winter [13] Digital and Supply Chain Developments - There are no significant updates on supply chain upgrades or digital systems; automation is still in the testing phase [35] Breakfast and New Product Initiatives - Gu Ming is testing breakfast products in select locations, with plans to expand offerings in 2026 [32][33] - The pricing strategy for new breakfast items is being developed, with a focus on maintaining profitability for franchisees [33] Financial Outlook - The company is monitoring franchisee profitability closely and may consider price adjustments or other measures if profitability declines significantly [20][21] Conclusion - Gu Ming is positioned for growth with a focus on expanding its store network, enhancing franchisee profitability, and adapting its product offerings to seasonal demands. The company is navigating a competitive landscape while maintaining a strategic approach to market expansion and product innovation.

Group 1: Market Performance - Tea beverage stocks are performing strongly, with notable increases: Gu Ming up 13.51% to HKD 24.36, Nai Xue's Tea up 6.45% to HKD 1.32, and Mi Xue Group up 6.28% to HKD 426.4 [1] - The surge in sales is attributed to the upcoming "Double Festival" in 2025, which is expected to boost foot traffic in tea beverage stores due to the "holiday economy" and travel trends [1] Group 2: Sales Growth - Cha Bai Dao reported a nearly 2800% increase in sales at scenic area stores, with popular "autumn appreciation" cities like Nanjing and Guilin seeing sales growth exceeding 600% [1] - Ba Wang Tea Ji also experienced significant sales increases in transportation hubs and popular tourist cities, with some stores in Shanghai, Sichuan, and Guangzhou averaging over 2500 cups sold daily [1] Group 3: Nai Xue's Expansion - Nai Xue's Tea has seen a surge in domestic orders, with many stores reporting over 700% growth compared to pre-holiday levels, particularly in tourist cities like Chengdu and Dalian [2] - The company has recently opened its first store in the United States, generating nearly USD 87,000 (approximately RMB 620,000) in sales within three days and selling around 13,000 products, setting a record for new store openings [2] - Nai Xue's second U.S. store is confirmed to be located in the core commercial area of Long Island, New York, and is expected to open soon [2]

Core Viewpoint - The Hong Kong stock market is witnessing a strong performance in new consumer stocks, with significant gains observed in several companies [1] Group 1: Company Performance - Mixue Group saw a rise of 9.07%, reaching a latest price of 409.000 and a total market capitalization of 155.264 billion, with a year-to-date increase of 101.98% [2] - Gu Ming experienced a 4.35% increase, with a latest price of 21.600 and a market cap of 51.369 billion, marking a year-to-date rise of 117.30% [2] - Miniso recorded a 3.55% gain, with a latest price of 43.800 and a market cap of 53.51 billion, although it has seen a year-to-date decline of 4.47% [2] - Guoquan increased by 3.24%, with a latest price of 3.190 and a market cap of 8.454 billion, reflecting a year-to-date rise of 79.23% [2] Group 2: Other Notable Companies - NIO-SW rose by 1.50%, with a latest price of 61.000 and a market cap of 150.315 billion, showing a year-to-date increase of 75.29% [2] - Mao Geping saw a 1.18% increase, with a latest price of 102.900 and a market cap of 50.447 billion, reflecting a year-to-date rise of 79.04% [2] - Bubble Mart experienced a slight increase of 0.47%, with a latest price of 256.000 and a market cap of 343.793 billion, showing a significant year-to-date increase of 188.41% [2]