Investment Rating - The report initiates coverage with a "Buy" rating for the company [1]. Core Views - The company is a leading one-stop provider of home meal products, focusing on retail stores and aiming to expand its store count significantly by 2025 [9][15]. - The market for home meal products is substantial, with a size of approximately 400 billion yuan, and the company holds a 3% market share, leading the competition [9][60]. - The company has a strong supply chain and is expanding its product offerings beyond hot pot ingredients to include barbecue and Western cuisine [9][28]. - The company plans to open an additional 10,000 stores over the next five years, with a focus on rural markets where competition is limited [9][18]. Summary by Sections 1. Leading One-Stop Home Meal Provider - The company has transitioned to a consumer-focused retail model since 2017, achieving rapid store growth [17]. - It has established a strong brand presence and is recognized for its affordable pricing strategy [15]. 2. Business Model: Vertical Industry in a Large Market - The company operates primarily through a franchise model, with 84% of revenue coming from sales to franchisees [24]. - The market for home meal products is fragmented, with the company being the largest player in a competitive landscape [60]. 3. Future Potential: Revenue Growth and Store Expansion - The company has successfully improved same-store sales and plans to continue expanding its store network [9][18]. - Revenue forecasts for 2025-2027 are projected at 72.83 billion yuan, 83.42 billion yuan, and 94.43 billion yuan, respectively, with corresponding net profits of 3.29 billion yuan, 4.00 billion yuan, and 4.95 billion yuan [1]. 4. Profit Forecast and Investment Recommendations - The report anticipates a recovery in single-store revenue and a positive outlook for store expansion, with a projected PE ratio decreasing from 24 to 16 over the forecast period [1][9].

Group 1 - The core focus of the company is on expanding its pet food segment, having established a subsidiary and a supply partnership with the Shanghai-based fresh pet food brand "Paiteshengsheng" to gradually enter the pet food market [1] - In terms of new store expansion, the company reported that the median order amount for stores in East China has turned positive year-on-year in April and May, with a stable closure rate [1] - The company is exploring new store formats and product categories, including dine-in options and new types of food offerings, to meet the consumption needs of lower-tier markets and enhance the franchise model [1] Group 2 - For the group meal business, the company expects to achieve revenue of 380 million yuan in 2024, a year-on-year increase of 15.3%, and 93.11 million yuan in the first quarter of 2025, a year-on-year increase of 11.7%, with this segment accounting for over 25% of total revenue [2] - The company plans to leverage its five central kitchens across the country to expand its group meal business, focusing on deepening relationships with key clients like Hema and Meituan while developing more offline high-potential customers [2] - The strategy includes building a national distributor system to offer competitive pricing and services, aiming for rapid growth in the group meal segment [2]