Core Viewpoint - The report from Industrial Securities initiates coverage on Mingming Hen Mang (01768) with a "Buy" rating, highlighting the company's growth potential as a leading snack retailer, with expected earnings elasticity to be gradually released in the coming years [1] Group 1: Competitive Advantages - Strong Store Network: The company has established a comprehensive national store network through a mature franchise system, with a total of 21,041 stores expected by November 30, 2025, covering 28 provinces and 1,341 towns, with 59% of stores located in county towns [1] - Supply Chain Barrier: The company achieves extreme control over supply chain costs and operational efficiency through a flat procurement model and an efficient logistics network, with inventory turnover days as low as 13.4 days by the third quarter of 2025, and product prices approximately 25% lower than traditional supermarkets [2] - Digital Barrier: The company integrates digital technology throughout the supply chain, managing over 20,000 stores with the largest digital team in China's snack retail sector, enhancing various core processes [2] - Product Matrix Barrier: The company leverages extensive terminal data to create a dynamic product matrix, with over 2,500 quality manufacturers and 3,997 SKUs, introducing hundreds of new products monthly, with customized products accounting for about 34% [2] Group 2: Future Growth Potential - Market Expansion: The company plans to accelerate its supply chain layout in the northwest regions, utilizing a "warehouse-first" strategy to increase store density [3] - Product Structure Optimization: The company aims to enhance its product matrix and improve profitability, supported by vast user data for accurate product predictions and validated potential for customized blockbuster products [3] - New Business Models: The company is exploring a new "snack+" business model, introducing "Zhao Yiming Discount Supermarket," which combines snacks with essential goods, enhancing shopping options and profitability potential [3] Group 3: Financial Performance - Rapid Revenue Growth: The company achieved a compound annual growth rate of 203% in revenue from 2022 to 2024, with revenue of 46.37 billion yuan in the first three quarters of 2025, a year-on-year increase of 75.2%, and adjusted net profit of 1.81 billion yuan, up 240.9% [4] - Franchise Revenue Dominance: Franchise revenue accounted for 98.9% of total revenue in the first three quarters of 2025, with a focus on expanding the store network and improving supply chain efficiency to benefit franchisees [4] - Excellent Supply Chain Management: The company maintains a cash cycle of only 4.3 days and accounts payable turnover days of 9.6 days, significantly lower than traditional retailers, establishing a win-win relationship with suppliers [4] - Low Concentration of Suppliers and Customers: The company maintains a low and steadily decreasing concentration of suppliers and customers, fostering a broad cooperative network [4] - Resilient Store Operations: Mature stores demonstrate robust operational resilience, while new stores show excellent ramp-up capabilities, validating the replicability and continuous optimization of the company's store model [4]