Company Overview - Shenzhen Baiguoyuan Industrial (Group) Co., Ltd. was established in 2001 and is a large chain enterprise integrating fruit procurement, planting support, post-harvest preservation, logistics and warehousing, standard grading, marketing expansion, brand operation, retail, information technology, financial capital, and research education [2]. Financial Performance - As of December 31, 2024, Baiguoyuan Group reported total operating revenue of 10.273 billion yuan, a year-on-year decrease of 9.81% [1] - The company recorded a net profit attributable to shareholders of -386 million yuan, a year-on-year decrease of 206.72% [1] - The gross profit margin stood at 7.44%, while the asset-liability ratio was 64.06% [1] Stock Performance - As of July 7, the stock price of Baiguoyuan Group closed at 2.32 HKD per share, an increase of 13.73% with a trading volume of 19.5035 million shares and a turnover of 44.7158 million HKD, showing a volatility of 19.61% [1] - Over the past month, the cumulative increase in Baiguoyuan Group's stock price was 2.87%, and since the beginning of the year, it has risen by 45.18%, outperforming the Hang Seng Index by 19.22% [1] Valuation Metrics - Currently, there are no institutional investment rating recommendations for Baiguoyuan Group [1] - The average price-to-earnings (P/E) ratio for the food and beverage industry is 23.8 times, with a median of 9.43 times [1] - Baiguoyuan Group's P/E ratio is -7.53 times, ranking 74th in the industry [1]

在中国，卖水果是一门好生意，也是一门难生意。 好，是因为刚需，市场足够大；难点，全在于水果产品易损耗的特性上，同时，面临激烈的行业竞争。 公司附近有一家百果园，每天都会从它门口路过，店里的水果总是满满当当，但很少见到顾客盈门的盛 况，我也从来没有光顾过。 最近，再次路过，发现它已关门歇业了。百果园的招牌还在，门头上多了一张小广告"商铺出售"。 这只是，我对身边的一家百果园，所见所感的简单描述，说明不了什么。 但是，百果园集团披露的那份惨降的半年度业绩预警，则包含了很多信息。 另一边，公司创下新低的股价，是投资者对中国最大水果零售经销商的明确态度。 股价创新低 为了改造水果生意，多少创业者前赴后继，赛道上白骨累累。 江西农科院前研究人员余惠勇，经过20多年的坚持，以传统的连锁模式，将百果园做成了全国第一。 2023年1月16日，深港两地同时锣响，百果园集团（02411.HK）正式在港交所主板挂牌上市，公司市值 一度破百亿。 整个2023年，百果园在港股市场的表现跌宕起伏，既有破发的失落，也有冲高的辉煌，但波动都在可接 受的范围之内。 然而，上市一周年之际，市场给了百果园一个迎头暴击。今年1月16日，公司股价突然 ...

Company Overview - The company is the largest fruit retail operator in China, ranking No. 1 in sales of fruit chain stores for eleven consecutive years (2014-2024) [6]. - The company operates primarily from its headquarters located in Shenzhen, Guangdong Province, China [29]. - The company has a stock code of 2411 and its website is www.pagoda.com.cn [31]. - The company has established several wholly-owned subsidiaries, including Baiguo Technology and Baixin Investment [36]. - The principal banks associated with the company include Shanghai Pudong Development Bank and China CITIC Bank [31]. Financial Performance - The Group recorded a loss of RMB 399,788,000 for the year ended December 31, 2024, compared to a profit of RMB 339,992,000 in 2023 [200]. - The Group's total revenue decreased by approximately 9.8% from RMB 11,390.6 million in 2023 to RMB 10,273.3 million in 2024 [151]. - The Group's gross profit decreased by approximately 41.9% from RMB 1,314.8 million for the year ended December 31, 2023, to RMB 764.4 million for the year ended December 31, 2024 [164]. - The net loss for the year ended December 31, 2024, was approximately RMB 399.8 million, compared to a net profit of approximately RMB 340.0 million for the year ended December 31, 2023 [190]. - The Group's operating loss increased from RMB 341.5 million in 2023 to RMB 391.5 million in 2024 [146]. - Revenue from sales of fruits and other food products accounted for approximately 97.2% and 97.5% of total revenue for the years ended December 31, 2023 and 2024, respectively [151]. - The Group's finance income increased from RMB 40.9 million in 2023 to RMB 44.1 million in 2024 [146]. - The Group's finance costs rose by approximately 31.9% from RMB 75.8 million in 2023 to RMB 100.0 million in 2024, primarily due to increased bank borrowings [182]. Market Expansion and Strategy - The company aims to build a nationwide community-based fruit specialty retail network with store-as-warehouse and OMO features [8]. - The company plans to continue diversifying product categories and expanding customer channels both domestically and internationally [10]. - The company is expanding its market presence by entering three new provinces in China, aiming to increase its market share by 10% in these regions [44]. - The Group plans to build a diversified business system with retail as the core, 2B business as a growth engine, and category brands as a long-term moat [60]. - The Group aims to enhance store profitability by optimizing the retail network layout, resulting in a decrease in the number of retail stores [58]. Product Development and Innovation - The company introduced 46 self-owned Excellent fruit brands, with their sales accounting for 14.7% of total retail sales in 2024 [10]. - New product development includes the introduction of a line of organic food products, expected to contribute an additional HK$300 million in revenue [46]. - The company plans to create a cost-effective product matrix centered around the "best fruit for you" series, aiming to attract more customers and meet diverse consumer needs [135][138]. - The introduction of a simplified grading system for fruits enhances consumer recognition of high-quality products while offering more cost-effective options [113]. - The focus on product innovation will include introducing unique products and ensuring compliance with the highest food safety standards in the fruit industry [139][142]. Operational Efficiency and Cost Management - The company focused on optimizing store layout and enhancing franchisee support systems to improve operational efficiency and profitability [9]. - The Group's strategy focuses on optimizing cost structure and improving operational efficiency through digital intelligence applications [75]. - A strategic acquisition of a local supply chain company is underway, which is anticipated to enhance operational efficiency and reduce costs by 15% [43]. - The company plans to invest HK$50 million in technology upgrades to improve its online and offline integration model, enhancing customer experience [45]. Consumer Trends and Marketing - The company has captured the trend of healthier gift consumption, focusing on major festivals for sales growth [9]. - The consumption scenarios for fruit gift-giving are expanding rapidly, providing stable growth momentum for fruit consumption [70]. - User data indicates a growth in active users, reaching 2 million, which is a 25% increase compared to the previous year [43]. - The cumulative number of live streaming views on Douyin reached 190 million, representing a year-on-year growth of approximately 449.0% compared to 2023 [99]. Challenges and Future Outlook - The national fresh fruit consumer price index (CPI) for 2024 decreased by approximately 3.5% compared to 2023, indicating weak end-consumer demand [69]. - The Group's new strategy for 2024 focuses on becoming an "Expert and Leader in High-quality and Cost-effective Fruit Industry," which includes store refurbishments and marketing campaigns [188]. - The Group's expenses increased in 2024 due to the implementation of the new strategy and related activities [188]. - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 20% driven by new product launches and market expansion strategies [45].

Core Insights - The fruit industry in 2024 is experiencing a dual trend of consumption downgrade and upgrade, with domestic demand softening while the imported fruit market expands [1] - The leading fruit retailer, Baiguoyuan, reported a GMV of 12.71 billion yuan and revenue of 10.27 billion yuan in 2024, reflecting a year-on-year decline of 9.8% [1] - The company is transitioning towards high-quality development amidst a challenging macroeconomic environment, focusing on strategic store closures and channel optimization [1][2] Revenue Performance - Revenue decline is attributed to a weak macro consumption environment and strategic store closures aimed at optimizing high-rent locations [1] - In H1 2024, revenue fell by 11%, while H2 showed a reduced decline of 8%, indicating the effectiveness of the company's strategic adjustments [1][2] Profitability Analysis - The profit decline is a result of short-term discounts aimed at enhancing long-term customer loyalty, with gross margin decreasing from 11.5% in 2023 to 7.4% in 2024 [2] - Sales expenses increased by 1.2 billion yuan (+26%), reflecting the company's investment in brand building and customer retention [2] Business Segments - The To B segment (direct sales of fruits and other foods) achieved a revenue of 1.256 billion yuan, a year-on-year increase of 22%, while the To C segment saw a revenue decline of 12.95% [4] - The company launched a dual strategy of "high quality and high cost performance," successfully introducing 46 proprietary fruit brands, with significant sales growth in specific products [5] Membership and Online Growth - Membership numbers exceeded 9.074 million, a year-on-year increase of approximately 8.1%, with strong online growth reflected in the usage of WeChat mini-programs [6] - Online orders accounted for about 25.2% of total orders, showcasing the company's robust online sales capabilities [6] Cash Flow and Financial Health - As of December 31, 2024, Baiguoyuan held cash and cash equivalents totaling 2.34 billion yuan, with a healthy operating cash flow of 160 million yuan [8] - The company has maintained stable inventory turnover days, indicating effective management of receivables and payables [8][9] Operational Efficiency - The company closed underperforming stores, focusing resources on high-performing locations, which improved overall operational efficiency [9] - The introduction of the "1212" category operation strategy enhanced product turnover and reduced inventory backlog, further improving cash flow [9][10] Future Outlook - Despite short-term performance pressures, Baiguoyuan's core operational metrics indicate resilience, with expectations for gradual performance recovery and long-term value enhancement [10]

Core Insights - The article emphasizes the strategic transformation of companies like Luckin Coffee and Baiguoyuan, focusing on the importance of "shrinking to grow" and enhancing core business profitability [1][2] Financial Performance - Baiguoyuan reported a GMV of 12.7 billion yuan and total revenue of 10.27 billion yuan for 2024, with a gross profit of 760 million yuan and a net loss of 386 million yuan [1] - The decline in revenue was primarily due to a reduction in store numbers, with same-store sales experiencing a double-digit decline in the first half of the year, but stabilizing in the second half [1][2] Strategic Focus - Baiguoyuan is implementing a "1212" category operation strategy starting August 2024, focusing on high-quality and cost-effective products to enhance customer retention and brand perception [3] - The strategy includes a unified pricing model for essential products, promotion of high-value seasonal fruits, and the introduction of a monthly featured product to attract customers [3] Product and Market Expansion - The company is diversifying its product offerings by introducing creative fruit gift packages, which led to a 21% increase in same-store sales during the 2025 Spring Festival [4] - The "Good Fruit Reward" initiative saw a significant increase in customer visits and sales, with total customer visits up by 534.1% and sales up by 388.4% [5] Operational Efficiency - Baiguoyuan is optimizing its store structure by closing underperforming locations and focusing on enhancing the efficiency of high-performing stores [6] - The company is leveraging technology to improve operational efficiency, including the implementation of digital systems for inventory and sales processes [6][7] Business Development - The To B segment of Baiguoyuan's business grew from 1.03 billion yuan to 1.25 billion yuan, reflecting a 22% year-on-year increase despite market challenges [8] - The company is also exploring international markets, establishing partnerships with suppliers in Thailand and New Zealand, and expanding its product offerings for export [8] Future Outlook - Baiguoyuan aims to continue its focus on single product strategies, brand development, and global supply chain expansion to unlock further growth opportunities [9] - The company's business model, centered around community stores and quality products, is expected to sustain its long-term value despite short-term challenges [10][11] Strategic Combination - The combination of focusing on high-quality products, optimizing store operations, and expanding into B2B and international markets is expected to drive Baiguoyuan's high-quality development and enhance its performance and valuation in the long run [12]

Financial Performance - Revenue decreased by approximately 9.8% from RMB 11,390.6 million in 2023 to RMB 10,273.3 million in 2024[13] - Gross profit fell by about 41.9% from RMB 1,314.8 million in 2023 to RMB 764.4 million in 2024[13] - The company recorded a loss attributable to owners of RMB 386.0 million in 2024, compared to a profit of RMB 361.7 million in 2023, representing a change of 206.7%[13] - Total retail sales amounted to RMB 12,703.3 million in 2024, down from RMB 14,171.3 million in 2023[6] - Revenue from franchise stores decreased from RMB 8,499.8 million in 2023 to RMB 7,396.3 million in 2024, representing a decline of approximately 12.9%[38] - The company reported a pre-tax loss of RMB 391.5 million for the year ending December 31, 2024, compared to a pre-tax profit of RMB 381.0 million for the year ending December 31, 2023[50] - The net loss for the year ending December 31, 2024, was approximately RMB 399.8 million, compared to a net profit of approximately RMB 340.0 million for the year ending December 31, 2023, resulting in a net loss margin of 3.89%[52] Membership and Customer Metrics - Membership increased to 90,743 thousand in 2024, up from 83,905 thousand in 2023[6] - The number of paid members decreased from 1,171 thousand in 2023 to 854 thousand in 2024[6] - The total number of members across all distribution channels exceeded 90.74 million, representing an 8.1% year-on-year growth, while paid membership decreased by approximately 27.1% to about 850,000[21] Store Operations - The company managed 4,039 franchise stores in 2024, down from 4,818 in 2023[5] - The total number of stores decreased from 6,093 in 2023 to 5,127 in 2024[5] - As of December 31, 2024, the company has a total of 5,127 retail stores, a decrease of approximately 15.9% from 6,093 stores as of December 31, 2023[16] Product and Sales Performance - The sales revenue from franchise stores managed by the company reached RMB 7,388.0 million, accounting for 99.4% of total sales, while self-operated stores contributed RMB 40.6 million, or 0.5%[18] - The company launched six seasonal products, achieving a total sales increase of approximately 388.4% year-on-year, significantly boosting new customer acquisition and member repurchase rates[19] - Direct sales revenue from fruits and other foods increased by approximately 21.7% to RMB 1,255.7 million, with overseas direct sales growing by about 18.0% compared to 2023[22] - The sales revenue of premium and A-grade fruits accounted for approximately 62.8% of the total retail sales at the company's stores for the year ending December 31, 2024[24] Financial Position and Cash Flow - As of December 31, 2024, the company's net asset value was RMB 2,810.3 million, down from RMB 3,337.1 million in 2023[57] - The company raised approximately HKD 474.0 million from its global offering and listing in the first quarter of 2023[56] - The net cash inflow from operating activities increased to RMB 164.6 million for the year ended December 31, 2024, compared to a net cash outflow of RMB 48.5 million for the year ended December 31, 2023[68] - The net cash used in investing activities was RMB 760.2 million for the year ended December 31, 2024, primarily due to payments for property, plant, and equipment related to a new office building in Shenzhen[68] Expenses and Cost Management - Sales expenses increased by approximately 25.5% from RMB 482.0 million for the year ending December 31, 2023, to RMB 605.1 million for the year ending December 31, 2024, driven by the execution of a new strategy aimed at enhancing brand recognition[44] - Management expenses rose by about 5.1% from RMB 313.5 million for the year ending December 31, 2023, to RMB 329.6 million for the year ending December 31, 2024, mainly due to the implementation of a share incentive plan[45] - Financial costs increased to RMB 104,744 in 2024 from RMB 80,502 in 2023[100] Strategic Initiatives - The company initiated a category operation system upgrade in August 2024, focusing on optimizing product combinations based on consumer behavior data[19] - The company aims to enhance market competitiveness through advanced agricultural technology and product differentiation strategies[32] - The company plans to enhance retail store operational efficiency and increase marketing resources to improve brand recognition and store profitability[30] Market and Industry Trends - The import fruit market grew by approximately 6.0% in 2024, reaching a total of about USD 19.45 billion[10] - Collaborations with tea beverage companies and the health industry are being pursued to meet diverse fruit consumption needs and expand market presence[31] Shareholder and Governance - The company plans to pay a final dividend of RMB 0.0065 per share, totaling approximately RMB 10.0 million for the year[7] - The audit committee has reviewed the accounting principles and practices adopted by the group, confirming compliance with applicable accounting standards[116] - The company expresses gratitude to shareholders, management, employees, business partners, and customers for their support and contributions[122]

Core Insights - The strategic partnership between Baiguoyuan and Leqi aims to enhance the promotion of New Zealand's Leqi Rocket Apples through a multi-channel approach [1][2] - The 2025 season marks the eighth consecutive year of direct supply of Leqi Rocket Apples to Baiguoyuan, with the first shipment already arriving in China [1] - The collaboration includes a new marketing initiative focusing on children's health, featuring the "Mom's Safe Little Apple" theme and innovative product designs [1][2] Company Collaboration - A strategic cooperation agreement was signed between Baiguoyuan and Leqi, covering areas such as product innovation, marketing collaboration, business growth, and customer service [1] - The partnership aims to leverage both companies' market insights to meet consumer demand for high-quality fruits [2] Product Highlights - Leqi Rocket Apples are cultivated in New Zealand's Hawke Bay, utilizing mountain snowmelt for irrigation, and have been developed over 20 years [2] - The apples are recognized as the world's first mini apple certified by the United Nations Economic Commission for Europe, with a wax-free skin suitable for direct consumption [2] - In the 2024 season, over 150 million Leqi Rocket Apples were sold globally, showcasing their popularity [2] Consumer Engagement - The promotional events included interactive zones with games and free tasting opportunities, highlighting the unique taste of Leqi Rocket Apples, which received positive feedback from consumers [2] - The apples are noted for their small size and minimal core, making them particularly appealing for children [2]

Summary of Conference Call Company and Industry - The conference call pertains to a company in the fruit retail industry, specifically focusing on a leading fruit brand known as "白果园" (Bai Guo Yuan) [7][8]. Core Points and Arguments 1. **Profit Recovery Timeline**: The company expects net profit to gradually recover in the second half of 2025, driven by sales growth and margin recovery. Cost management initiatives are also anticipated to stabilize expenses over the long term [1]. 2. **Market Focus**: The primary focus for the company in the coming years is to regain market share and improve sales performance, with positive application data indicating a strengthening user sentiment [2]. 3. **Shareholder Actions**: There is a concern regarding original shareholders' potential sell-off due to fund expirations. However, the company believes that the majority of long-term shareholders remain stable and do not have immediate plans to reduce their holdings [3][4]. 4. **Management Stability**: The company reassures stakeholders that the management team remains stable despite some share reductions by executives, which are attributed to external pressures rather than personal decisions [4]. 5. **Share Buyback Initiatives**: The company has initiated share buybacks to stabilize the stock price during a period of low market performance, with plans to continue these actions at appropriate times [5]. 6. **Long-term Investment Value**: The company is positioned as a leader in the fruit industry, benefiting from a well-integrated supply chain and economies of scale. This strategic positioning is expected to yield significant long-term growth [6][7]. 7. **Market Positioning**: The company emphasizes its unique market positioning, focusing on community-based retail and high-frequency consumption patterns, which differentiates it from larger competitors like Sam's Club and Costco [10][11]. 8. **Product Differentiation**: The company has established exclusive relationships with high-quality suppliers, allowing it to offer differentiated products that enhance customer loyalty and purchasing quality [12]. Other Important but Overlooked Content 1. **Pressure on Margins**: The company anticipates ongoing pressure on gross margins and profitability in the short term, particularly through the second half of the current year and into the first half of next year [9][14]. 2. **Consumer Behavior Insights**: The company recognizes the diverse consumer needs in the fruit market, suggesting that there are still significant opportunities to capture unmet demand, particularly in smaller household packaging [11]. 3. **Investor Engagement**: The company encourages ongoing communication with investors and stakeholders, indicating a commitment to transparency and responsiveness to market conditions [14][15].

•周二：避险需求推动美债收高，收益率曲线走平，美国2年期国债收益率基本持平，报4.2803%，美国 10年期国债收益率下跌1.77个基点，报4.3962%。 俄乌战争升级导致避险情绪升温，欧元区债券上涨，欧洲股市跌至8月份以来最低，国防股大涨，英国 10年期国债收益率下跌2.3个基点，报4.442%，德国10年期国债收益率下跌3.6个基点，报2.338%。 （数据来源：彭博、债券交易平台汇总） ...

•周一：美国国债周一扭转跌势收高。 在早盘收益率上升之后，期货市场出现逢低买进的大宗买盘，美国2年期国债收益率下跌2.31个基点， 报4.2802%，美国10年期国债收益率下跌2.56个基点，报4.4138%。 随着市场下调欧洲央行降息押注，德国国债收益率下跌，欧洲股市走低，英国10年期国债收益率下跌 0.6个基点，报4.465%，德国10年期国债收益率上涨1.8个基点，报2.373%。 （数据来源：彭博、债券交易平台汇总） ...