HAOXIANGNI(SZ:002582) Xin Lang Zheng Quan·2025-08-29 11:30Core Viewpoint - The competitive landscape in the snack retail industry is intense, raising questions about the growth ceiling for Mingming Hen Mang. The competition with Wancheng is particularly fierce, potentially suppressing future profitability. Additionally, with both companies having over 30,000 stores, there are concerns about market saturation, especially in lower-tier cities. The company's business model heavily relies on franchisees, and the number of store closures is expected to rise significantly in 2024 compared to the previous year [1]. Group 1: Company Overview - Mingming Hen Mang Group, a leading player in the snack retail sector, was newly listed among the top 500 private enterprises in China by the All-China Federation of Industry and Commerce in 2025. The company was formed by the merger of "Snacks Hen Mang" and "Zhao Yiming Snacks" [1]. - As of December 31, 2024, Mingming Hen Mang had 14,394 stores across 28 provinces, with over 70% of its stores located in third-tier cities and below [2]. Group 2: Financial Performance - The revenue figures for Mingming Hen Mang from 2022 to 2024 are as follows: 4.286 billion RMB, 10.295 billion RMB, and 39.344 billion RMB, respectively. The adjusted net profits for the same years were 81 million RMB, 235 million RMB, and 913 million RMB, with gross margins consistently below 8% [3][4]. - The company's GMV (Gross Merchandise Volume) for the years 2022, 2023, and 2024 were 6.447 billion RMB, 15.325 billion RMB, and 55.531 billion RMB, respectively, indicating significant growth in transaction volume [7][8]. Group 3: Market Dynamics - The snack retail market in China is projected to reach 3.74 trillion RMB in 2024, with a year-on-year growth of 4.09%. The down-market segment is expected to grow faster, with a five-year CAGR of 5.48% [4][5]. - The competitive landscape is characterized by a tight rivalry between Mingming Hen Mang and Wancheng, with Mingming holding a market share of 28.6% and Wancheng at 20% as of the end of 2024 [5][6]. Group 4: Store Expansion and Saturation - The number of stores for both Mingming Hen Mang and Wancheng is projected to exceed 16,000 and 15,000, respectively, by May 2025. Given the number of administrative districts in China, there are concerns about potential market saturation, particularly in smaller towns [6]. - The company has experienced a significant increase in store closures, with numbers rising from 14 in 2022 to 273 in 2024, raising questions about the sustainability of its franchise model [6]. Group 5: Shareholder Dynamics - The major shareholder, Haoxiangni, has engaged in financial maneuvers that may lead to a significant release of valuation premium for its stake in Mingming Hen Mang. Following the submission of the IPO application, Haoxiangni invested 700 million RMB for a 6.64% stake in the company [9][10].