Investment Rating - The report initiates coverage on Wanchen Group with a "Buy" rating, marking the first time the company has been rated [1] Core Views - The snack retail industry is experiencing rapid growth, with the number of stores increasing from over 1,000 in 2020 to over 20,000 by 2023, and sales growing from 6 billion RMB to 70-80 billion RMB [2] - Wanchen Group has transitioned into the snack retail sector, achieving significant revenue growth from 549.27 million RMB in 2022 to 30.75674 billion RMB in 2024E [1][3] - The company's net profit is expected to improve significantly, with a projected net profit of 2.1364 billion RMB in 2024E, up from a loss of 829.3 million RMB in 2023A [1] - Wanchen Group's store count has surpassed 10,000 by October 2024, with expectations to reach 14,000 by the end of 2025 [4] - The snack retail industry is expected to reach saturation in terms of store count, leading to a focus on optimizing store models and exploring new formats [5] Industry Overview - The snack retail industry has seen a surge in store numbers, with the top two brands, "Mingming Busy" and "Wanchen Group," each surpassing 10,000 stores by October 2024 [2][31] - The top two brands' market share has increased from 59% in March 2024 to 70% by November 2024, driven by their rapid store expansion [2][31] - The industry is characterized by a high-growth phase, with the number of stores and sales volume both experiencing exponential growth since 2020 [30][32] Company Performance - Wanchen Group's revenue has grown from 549.27 million RMB in 2022 to 30.75674 billion RMB in 2024E, with a year-on-year growth rate of 230.94% [1][3] - The company's net profit margin has improved, with the snack retail business achieving a net profit margin of 2.1% in Q2-Q3 2024 [4] - Wanchen Group's operational efficiency has improved, with inventory turnover, accounts receivable turnover, and accounts payable turnover all showing continuous optimization [3][4] Future Outlook - Wanchen Group is expected to continue expanding its store count, with a neutral expectation of reaching 14,000 stores by the end of 2025 [4] - The company is likely to explore new store formats and optimize existing models as the industry approaches store saturation [5] - The snack retail industry is expected to shift focus from rapid store expansion to improving store efficiency and exploring new business models [5][115] Financial Projections - Wanchen Group's revenue is projected to reach 30.75674 billion RMB in 2024E, 48.05518 billion RMB in 2025E, and 57.58294 billion RMB in 2026E [1] - The company's net profit is expected to grow from 2.1364 billion RMB in 2024E to 6.6943 billion RMB in 2026E [1] - The EPS is projected to increase from 1.19 RMB in 2024E to 3.72 RMB in 2026E [1]
万辰集团：量贩一日千里，万辰扶摇直上