Core Viewpoint - Gu Ming (01364) has been given a "buy" rating by Guohai Securities, which highlights the company's strategy to encourage existing franchisees to open more stores, thereby enhancing brand influence and operational efficiency [1] Recent Events - Gu Ming has recently launched a new franchise policy that incentivizes existing franchisees with 1-2 stores to open additional locations by waiving a franchise fee of 25,000 yuan if they sign new agreements by May 31, 2026 [1] - Franchisees with 3 or more stores can also benefit from a 25,000 yuan reduction in renovation costs if they complete relocations or expansions by the same date [1] Product Development and Innovation - The company has a rapid product development cycle and high cost-performance ratio, with a platform-based approach to product development [2] - As of September 30, 2024, the R&D team will consist of approximately 120 members, focusing on quick product launches and capturing market trends [2] - In the first half of 2025, Gu Ming plans to introduce 52 new products, including 16 new coffee beverages, and is also venturing into baked goods [2] Supply Chain Efficiency - Gu Ming has established a robust supply chain, directly sourcing fruits and operating its own factories to ensure quality [3] - By the end of the first half of 2025, the company will have 22 self-operated warehouses and 362 transportation vehicles, with 75% of stores located within 150 kilometers of a warehouse [3] - The logistics strategy allows for efficient cold chain delivery, with distribution costs accounting for less than 1% of the total GMV [3] Regional Strategy and Market Potential - The company's regional encryption strategy is proving effective, encouraging existing franchisees to open more stores, which enhances local visibility and management efficiency [4] - As of 2025, Gu Ming is projected to be the second-largest tea beverage brand in terms of store count in China, with a total of 13,117 stores, reflecting a year-on-year growth of 34% [4] - The company has significant expansion potential, with 11 provinces in mainland China yet to be penetrated, indicating ample market opportunities for future growth [4]