JIANGSU HORIZON CHAIN SUPERMARKET COMPANY LIMITED 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示 概 不 就 因 本 公 告 全 部 或 任 何 部 分 內 容 而 產 生 或 依 賴 該 等 內 容 而 引 致 的 任 何 損 失 承 擔 任 何 責 任。 承董事會命 江蘇宏信超市連鎖股份有限公司 主 席 高 峰 中 國 江 蘇，2025年8月11日 於 本 公 告 日 期，董 事 會 成 員 包 括 執 行 董 事 高 峰 先 生、袁 原 先 生、張 佳 安 先 生、 姚 駿 先 生、沈 志 艮 女 士、佴 晶 晶 女 士 及 王 飛 先 生；非 執 行 董 事 韋 燕 女 士；及 獨 立 非 執 行 董 事 林 嘉 德 先 生、鄭 滿 軍 先 生、鄭 宇 先 生 及 朱 波 先 生。 江蘇宏信超市連鎖股份有限公司 （在中華人民共和國註冊成立的股份有限公司） （股份代號：2625） 董事會會議召開日期 江 蘇 宏 信 超 市 連 鎖 股 份 ...

Core Insights - Hongxin Supermarket (02625.HK) has successfully listed on the Hong Kong Stock Exchange, raising approximately HKD 134 million, with a net amount of about HKD 92.55 million (equivalent to RMB 86.26 million) [1] Group 1: Business Model and Strategy - The success of Hongxin Supermarket is attributed to its flexible business model and support from state-owned enterprises, providing strong supply chain support and market influence [3] - The company has shifted its strategy from retail to wholesale and meal supply, particularly in the prepared food sector, which has become a new growth point [3] - Hongxin Supermarket has maintained stable overall performance by focusing on grain and oil wholesale as a secondary growth curve, with wholesale business revenue accounting for 56.9% in the first three quarters of 2024 [3] Group 2: Market Position and Challenges - The listing journey of Hongxin Supermarket faced challenges, including an initial failed submission of the prospectus in 2024, before successfully listing in January this year [3] - The company’s development path has sparked industry attention and discussion regarding its ability to stand out in a competitive market through an innovative model combining wholesale and central kitchen services [3][4] - Despite facing challenges such as declining retail business, cash flow issues in wholesale, and growth in group meal services, the successful listing may provide new insights for regional retail brands to overcome bottlenecks [4]

Financial Performance - Revenue for the year ended December 31, 2024, was RMB 1,350,925 thousand, a decrease of 3.6% compared to RMB 1,401,972 thousand in 2023[15] - Gross profit for the same period was RMB 289,101 thousand, resulting in a gross margin of 21.4%, slightly down from 21.5% in 2023[15] - Profit before tax decreased to RMB 62,345 thousand, down 11.9% from RMB 70,058 thousand in the previous year[15] - Net profit for the year was RMB 43,975 thousand, a decline of 14.8% compared to RMB 51,602 thousand in 2023[15] - The group's net profit for the reporting period was approximately RMB 44.0 million, a decrease of about 14.73% from approximately RMB 51.6 million for the year ended December 31, 2023[17] - Gross profit decreased from approximately RMB 301.4 million to approximately RMB 289.1 million, with a stable gross margin of approximately 21.5% and 21.4% for the respective years[38][39] - Net profit decreased from approximately RMB 51.6 million to approximately RMB 44.0 million, with a net profit margin decline from approximately 3.7% to approximately 3.3%[48] - Adjusted net profit for the year ending December 31, 2024, is approximately RMB 51.3 million, down from RMB 55.1 million in 2023, reflecting a decrease of about 6.5%[51] - The adjusted net profit margin for 2024 is 3.8%, slightly down from 3.9% in 2023[51] Assets and Liabilities - Non-current assets increased to RMB 399,108 thousand from RMB 377,772 thousand in 2023, reflecting a growth of 5.4%[15] - Current assets rose to RMB 1,056,580 thousand, up from RMB 1,029,364 thousand in 2023, indicating a growth of 2.6%[15] - Current liabilities decreased to RMB 774,555 thousand from RMB 819,983 thousand in 2023, a reduction of 5.5%[15] - Total net assets increased to RMB 540,910 thousand, compared to RMB 493,341 thousand in 2023, marking an increase of 9.6%[15] - Cash and cash equivalents decreased from approximately RMB 236.2 million at the end of 2023 to RMB 216.9 million at the end of 2024, primarily due to higher cash outflows from investing and financing activities[55] - Inventory increased significantly from approximately RMB 266.3 million in 2023 to RMB 330.1 million in 2024, driven by increased procurement to meet anticipated food demand[58] - Trade receivables decreased from approximately RMB 213.8 million in 2023 to RMB 190.0 million in 2024, indicating improved collection efforts[60] - Trade payables decreased from approximately RMB 160.7 million in 2023 to RMB 110.3 million in 2024, reflecting timely settlements of trade payables[63] Revenue Breakdown - Revenue from general sales decreased to approximately RMB 505.8 million, down about 18.0% or RMB 111.0 million from approximately RMB 616.8 million for the year ended December 31, 2023[17] - Revenue from wholesale increased to approximately RMB 729.8 million, an increase of about 7.39% or RMB 50.2 million compared to approximately RMB 679.6 million for the year ended December 31, 2023[17] - General sales revenue decreased from approximately RMB 616.8 million to approximately RMB 505.8 million, primarily due to the cessation of tobacco sales and adverse weather conditions affecting promotional performance[35] Market Outlook and Strategy - Future outlook includes potential market expansion and new product development strategies to enhance revenue growth[15] - The retail market in Jiangsu Province shows strong growth potential, with small and medium-sized chain supermarkets experiencing a compound annual growth rate of 15.7% from 2017 to 2023, expected to reach 8.7% from 2024 to 2027[28] - The convenience store market has shown robust growth with a compound annual growth rate of 14.3% from 2017 to 2023, expected to continue expanding at 9.0% from 2024 to 2027[29] - The company plans to expand its market share and number of retail stores, establish new distribution centers, and enhance its ERP systems to improve operational efficiency[21][30] Corporate Governance and Management - The board consists of 12 members, including seven executive directors, one non-executive director, and four independent non-executive directors[103] - The supervisory board currently consists of three members, including two shareholder representatives and one employee representative, with a term of three years[138] - The company has appointed two joint company secretaries to enhance corporate governance[150][151] - The company emphasizes the importance of monitoring financial and operational performance through its supervisory board[138] - All independent non-executive directors confirmed their independence as per Listing Rules[137] Compliance and Risks - The company has complied with all relevant laws and regulations without incurring any fines or penalties related to health, safety, or environmental issues during the reporting period[181] - The company has faced risks related to finding ideal retail locations and competition with online stores, which may adversely affect its business[168] - The company is currently addressing compliance issues related to certain properties, with plans to relocate storage activities to areas with valid property certificates[180] Future Plans and Funding - The company plans to open new retail stores, allocating approximately 30.9% of the net proceeds from the global offering, which amounts to about HKD 32.5 million[161] - The company intends to establish a new distribution center, with 41.2% of the net proceeds, approximately HKD 43.3 million, designated for this purpose[161] - The company has not utilized any of the net proceeds from the global offering as of the last practicable date[163] - The net proceeds from the global offering are estimated to be approximately HKD 92.55 million after deducting underwriting fees and estimated expenses related to the listing[161]

Core Viewpoint - The listing of Jiangsu Hongxin Supermarket Chain Co., Ltd. on the Hong Kong Stock Exchange marks a potential revaluation of regional retail leaders under the dual pressures of consumer segmentation and channel restructuring [1][4]. Group 1: Company Overview - Jiangsu Hongxin Supermarket, known as "the first supermarket in Central Jiangsu," raised approximately HKD 150 million during its IPO [1]. - The company operates 52 supermarkets and 107 convenience stores, primarily concentrated in Yangzhou, Jiangsu Province [5][6]. - As of 2023, Hongxin Supermarket ranked second among supermarket operators in Yangzhou with a market share of 9.1% and fifth in Central Jiangsu with a market share of 2.3% [6]. Group 2: Financial Performance - The company's revenue for the past three years was RMB 1.43 billion, RMB 1.33 billion, and RMB 1.40 billion, with net profits of RMB 35.08 million, RMB 51.07 million, and RMB 51.60 million respectively [6][9]. - In the first nine months of 2024, revenue reached RMB 1.00 billion with a net profit of RMB 24.08 million [6][9]. - The net profit margin for 2023 was 3.66%, ranking second among listed peers [8]. Group 3: Business Structure and Strategy - Hongxin Supermarket is undergoing a significant business structure adjustment, shifting from a C-end retail focus to a B-end wholesale business, with wholesale revenue increasing from 36.7% in 2021 to 56.9% in the first nine months of 2024 [10][12]. - The company has also ventured into the prepared food sector, with a central kitchen capable of producing 20,000 meals daily [13][15]. - Despite its growth in wholesale and prepared food, the company has faced challenges with its franchise model, leading to the termination of its franchise program due to declining revenues [16]. Group 4: Market Position and Future Outlook - The successful IPO has enhanced the company's brand recognition and market visibility, transitioning from a regional player to a more nationally recognized entity [17]. - Hongxin Supermarket's approach of deepening its regional market presence and diversifying its business model serves as a reference for other companies in the industry [19]. - The company aims to expand its prepared food supply chain and infrastructure, indicating a commitment to growth in this segment [16].

Core Viewpoint - Jiangsu Hongxin, a regional supermarket company from Yangzhou, has successfully listed on the Hong Kong Stock Exchange amid challenges faced by traditional retail, aiming to enhance its operational capabilities and store image through raised capital [1][4]. Group 1: Company Overview - Jiangsu Hongxin operates 51 supermarkets and 109 convenience stores, with the majority located in Yangzhou and a few in Taizhou [1]. - The company ranked second among supermarket operators in Yangzhou with a market share of approximately 9.1% in 2023 [4]. - The company has seen a significant reduction in store count from nearly 500 to 160, indicating challenges in expansion and market adaptation [5]. Group 2: Financial Performance - Jiangsu Hongxin's revenue figures from 2021 to the first nine months of 2024 are as follows: 14.32 billion, 13.29 billion, 14.02 billion, and 10.06 billion CNY, with net profits of 350.8 million, 510.65 million, 516.02 million, and 240.78 million CNY respectively [6]. - The retail business's revenue contribution has decreased from 62% in 2021 to 41.6% in the first nine months of 2024, while the wholesale business's share increased from 36.7% to 56.9% during the same period [6]. Group 3: Strategic Initiatives - The company plans to use the raised funds to improve store image, upgrade logistics, invest in information technology, and enhance its central kitchen capabilities [1]. - Jiangsu Hongxin is entering the prepared food market, with a central kitchen capable of producing 10,000 meals per day, primarily serving local schools [7]. - The prepared food market in the Suzhong region is projected to grow from approximately 10.64 billion CNY in 2024 to 19.78 billion CNY by 2027, with a compound annual growth rate of about 22.96% [7].

Core Viewpoint - Jiangsu Hongxin Supermarket Chain Co., Ltd. (Jiangsu Hongxin) has listed on the Hong Kong Stock Exchange, with an opening price of HKD 3.44 and a closing price of HKD 2.50, indicating a challenging market debut [1]. Group 1: IPO Details - The total number of shares offered globally was 53,562,000 H-shares, with 8,892,000 shares available in Hong Kong and 44,670,000 shares for international sale [1]. - The final offer price was set at HKD 2.50, raising a total of HKD 133.91 million, with net proceeds amounting to HKD 92.55 million after deducting estimated listing expenses of HKD 41.36 million [4][5]. Group 2: Company Overview - Jiangsu Hongxin is a wholesale grain and oil merchant headquartered in Yangzhou, primarily operating supermarkets and convenience stores under the "Hongxin Long" brand in the Jiangsu region [5]. - The company plans to use the raised funds to open new retail stores, establish new distribution centers, create a central kitchen, and enhance its ERP and infrastructure systems to improve operational efficiency [5]. Group 3: Market Position and Financial Performance - Jiangsu Hongxin ranks approximately 20th among supermarket operators in Jiangsu province, with a market share of about 0.4% based on 2023 sales [6]. - The company's revenue for recent periods was reported as follows: RMB 1.432 billion, RMB 1.329 billion, RMB 1.402 billion, and RMB 1.006 billion, with year-on-year growth rates of -7.23%, 5.52%, 1.82%, indicating weak revenue growth for 2024 [6]. - Profit figures for the same periods were RMB 35.08 million, RMB 51.07 million, RMB 51.60 million, and RMB 24.08 million, showing a decline in profitability, with profits for the first nine months of 2024 being less than half of those in 2023, down 21.13% year-on-year [6].

Company Information - Jiangsu Horizon Chain Supermarket Company Limited is listed under stock code 2625[2] Financial Data - The preliminary financial data for the year ending December 31, 2024, will be included in the prospectus dated March 21, 2025[3] Regulatory Compliance - The announcement is made in accordance with the Hong Kong Stock Exchange Listing Rules[3]

Investment Rating - The report assigns a rating of ★★★☆☆ to the company based on fundamental factors and valuation [3]. Core Insights - The company is a grain and oil wholesaler headquartered in Yangzhou, primarily operating in the Suzhong region under the "Hongxin Long" brand, ranking second among supermarket operators in Yangzhou with a market share of approximately 9.1% in 2023 [1]. - The convenience store sector is expected to continue growing, with retail sales in mainland China reaching RMB 424.8 billion in 2023, reflecting a compound annual growth rate (CAGR) of 14.30% from 2017 to 2023. The forecast for 2024E-2027E indicates a continued growth with a CAGR of 9.00% [2]. - The company has four main business strategies aimed at consolidating market position and increasing market share, including expanding retail store numbers, enhancing warehousing capacity through new distribution centers, increasing food processing capabilities via new central kitchens, and improving operational efficiency through enhanced ERP systems [2]. Financial Data Summary - The financial data for the company shows the following figures (in billion RMB): - Other income: 14.32 in 2022, 13.29 in 2023, and projected 14.02 in 2024 - Profit attributable to shareholders: 0.35 in 2022, 0.51 in 2023, and projected 0.52 in 2024 [3].