Core Viewpoint - The overall performance of the company in the first half of 2025 is considered good, driven by store expansion, delivery subsidies, and the introduction of coffee business, despite the lack of market consensus on expectations due to the absence of previous half-year reports [1][2][10]. Group 1: Financial Performance - The total revenue for the first half of 2025 reached 5.66 billion RMB, representing a year-on-year growth of 41.2% [2][6]. - The gross profit for the same period was 1.79 billion RMB, with a gross margin of 31.5% [6][21]. - The operating profit margin reached a record high of 23.7%, driven by improved operational efficiency [4][23]. Group 2: Store Expansion - The company added 1,265 new stores in the first half of 2025, bringing the total to 11,179 stores, making it the second tea brand to surpass 10,000 stores [2][12]. - The store expansion is primarily focused on lower-tier cities, with 43% of new stores located in townships, up from 39% year-on-year [2][12]. - The company is on track to exceed its target of adding over 2,000 new stores for the year [2][12]. Group 3: Revenue Structure - Revenue from the sale of goods and equipment was 3.6 billion RMB, growing by 20% year-on-year, but its share of total GMV decreased to 25.6% [3][16]. - The average GMV per store reached 1.37 million RMB, a year-on-year increase of 20.6% [3][19]. Group 4: Customer Engagement and Product Offering - The average daily cup sales per store reached 439 cups, a 17.4% increase year-on-year, driven by delivery subsidies and the introduction of coffee products [3][19]. - The coffee business has been integrated into over 8,000 stores, contributing 15%-20% to total GMV, enhancing customer engagement during previously low-traffic hours [19][20]. Group 5: Cost Management - The company maintained stable gross margins by passing on cost savings from supply chain efficiencies to franchisees through lower raw material prices [21]. - Selling expenses remained stable despite increased advertising and promotional spending, while administrative expenses decreased to 3.3% of revenue [4][23].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 34.57 [7][8]. Core Insights - The company reported strong growth in both revenue and profit, with a 1H25 GMV of RMB 141 billion, up 34.4% year-on-year, and revenue of RMB 56.63 billion, up 41.2% year-on-year. The net profit attributable to the parent company reached RMB 16.25 billion, a significant increase of 121.5% year-on-year [1][2]. - The company is actively expanding its product categories, including coffee and breakfast, while also increasing its store count, which reached 11,179 by the end of 1H25. This expansion strategy is expected to sustain growth in the medium to long term [1][3]. - The company has a strong focus on enhancing operational efficiency and brand positioning, which supports high repurchase rates. Even with potential reductions in delivery subsidies, the company is expected to demonstrate resilience in same-store sales [1][2]. Revenue and Profitability - In 1H25, the company's revenue from sales of goods and equipment, franchise management services, and direct store sales were RMB 44.96 billion, RMB 11.59 billion, and RMB 0.78 billion, respectively, showing year-on-year increases of 41.8%, 39.2%, and 14.0% [3]. - The adjusted core profit margin for 1H25 was 20.1%, reflecting a year-on-year increase of 1.0 percentage points, indicating improved profitability [4]. Expansion and Market Strategy - The company has opened 1,570 new stores in 1H25 while closing 305, with a notable increase in the proportion of stores located in lower-tier cities and rural areas [3]. - The introduction of coffee machines in over 8,000 stores and the launch of 16 new coffee products are expected to enhance same-store sales and overall revenue [2][4]. Financial Forecast and Valuation - The adjusted net profit forecasts for 2025, 2026, and 2027 are RMB 21.63 billion, RMB 25.17 billion, and RMB 30.58 billion, respectively, with corresponding adjusted EPS of RMB 0.91, RMB 1.06, and RMB 1.29 [5][11]. - The report suggests a valuation of 30 times the expected PE for 2026, leading to a target price adjustment to HKD 34.57 [5][11].

Core Insights - The fierce competition in the food delivery market has led to significant changes in consumer behavior and restaurant revenue dynamics, with companies like Meituan and Taobao intensifying their subsidy strategies to attract users [1][2][3] Group 1: Market Dynamics - JD's entry into the food delivery market initially raised expectations, but the subsequent price wars have resulted in increased subsidies from competitors, leading to a surge in daily active users for Taobao's flash purchase service and a 40% year-on-year increase in JD's active users [1] - The intense competition has driven consumers to prioritize cost-effective options, often opting for delivery over dining in, which has negatively impacted in-store dining experiences [1][5] Group 2: Impact on Restaurants - Many restaurant owners report a significant decline in dine-in customers, with some experiencing a drop of up to 50% in in-store dining due to the rise of food delivery services [2][3] - The revenue from food delivery orders is often lower than that from dine-in services, with some restaurants receiving only 50% of the listed price for delivery orders compared to full price for dine-in [2][3] Group 3: Consumer Behavior - Consumers are increasingly inclined to check food delivery prices first, leading to a trend where they order delivery even when they are physically present at the restaurant, often opting for self-pickup to save costs [5][6] - The prevalence of discount coupons and promotions has created a situation where dine-in options are becoming less attractive, with many consumers choosing delivery or self-pickup instead [5][6] Group 4: Long-term Viability - The ongoing price wars and high operational costs associated with food delivery platforms are causing financial strain on many small restaurants, leading to concerns about their long-term viability [6][9] - Some restaurant owners are contemplating closing their businesses or shifting to ghost kitchens to avoid the competitive pressures of the delivery market [9][10]

Group 1 - The founder and chairman of Xiaocaiyuan, Wang Shugang, stated that the competition among three delivery platforms in July has impacted the restaurant's operations, leading to a surge in delivery orders that affected dine-in service quality [2] - Starting from August, Xiaocaiyuan will not participate in any discounts from the three delivery platforms (Meituan, Taobao Shanguo, JD) to prioritize improving the dine-in experience [2] - Wang believes that the subsidy model is not sustainable and emphasizes that the key to success is to provide good food, with an ideal ratio of delivery to dine-in being 30% to 70%, and delivery should not exceed 35% [2]

Core Viewpoint - The article discusses the impact of aggressive food delivery subsidies in Suqian, leading to a distorted restaurant ecosystem where traditional dining is declining while delivery services are booming, creating a bubble that ultimately burdens all participants in the market [1][24][25]. Group 1: Market Dynamics - Suqian has become a battleground for food delivery services, with major players like JD.com and Alibaba engaging in intense subsidy wars, resulting in unsustainable pricing and a shift in consumer behavior towards lower-priced meals [1][9][24]. - The influx of subsidies initially benefited many restaurants, leading to a surge in delivery orders and profits, but this was short-lived as the market became saturated and competition intensified [7][8][20]. Group 2: Impact on Traditional Dining - Traditional dining establishments are suffering as foot traffic declines, with many restaurants closing or struggling to maintain profitability due to the overwhelming preference for cheaper delivery options [2][4][10]. - The article highlights the plight of restaurant owners like Chen Li, who, despite initial success, faced declining sales and ultimately had to close her restaurant due to unsustainable business conditions [2][15][25]. Group 3: Economic Consequences - The aggressive subsidy strategies have led to a significant increase in operational costs for restaurants, as they are now required to absorb part of the subsidy costs while facing reduced profit margins [20][23]. - The overall economic environment for the food service industry in Suqian is deteriorating, with many businesses unable to adapt to the new market realities, leading to a wave of closures and a challenging landscape for remaining operators [24][26].

文丨刘纾含 编辑丨赵磊 从"盼着继续补贴"到"被逼着内卷"，过去几个月，宿迁这座苏北小城的餐饮生态，在号称"史上最大"的 外卖补贴战中，经历了被催熟的速生与速朽。 这里是"最激烈的战场"之一。宿迁是刘强东的老家，当地餐饮业曾率先支持京东外卖，也最早享受到京 东百亿补贴的红利；淘宝闪购入局后，带来了更猛烈的补贴力度，一直持续至今；宿迁也是美团测试业 务边界的试验场，在美团核心本地商业CEO王莆中看来，宿迁是外卖大战打得最激烈的地方，"已经打 成焦土了"。在宿迁，10块钱吃顿饭已成为日常。 补贴也让宿迁餐饮业变得畸形。受消费市场和餐饮业内卷的影响，本就惨淡的堂食门店客流继续下滑， 许多以堂食为主的餐饮门店生意萧条，同样受到影响的，还有依附在餐饮业上讨生活的人们，比如代驾 师傅、驻唱歌手、餐饮设备回收商。 而享受过一波补贴红利的外卖商家们发现，平台牢牢把握着流量和补贴的规则，他们被裹挟而进，不得 不继续参与补贴，但在扭曲的价格里，想赚以往同样的钱，付出的辛苦成倍增加。 宿迁为我们展示了，非理性的补贴创造的不是需求，而是泡沫。当狂欢过后，所有的参与者都要一起买 单。 美食街上，只剩外卖骑手 7月末，宝龙后街一家蹄花店 ...

从"盼着继续补贴"到"被逼着内卷"，过去几个月，宿迁这座苏北小城的餐饮生态，在号称"史上最大"的外卖补贴战中，经历了被催熟的速生与速朽。 这里是"最激烈的战场"之一。宿迁是刘强东的老家，当地餐饮业曾率先支持京东外卖，也最早享受到京东百亿补贴的红利；淘宝闪购入局后，带来了更猛 烈的补贴力度，一直持续至今；宿迁也是美团测试业务边界的试验场，在美团核心本地商业CEO王莆中看来，宿迁是外卖大战打得最激烈的地方，"已经 打成焦土了"。在宿迁，10块钱吃顿饭已成为日常。 补贴也让宿迁餐饮业变得畸形。受消费市场和餐饮业内卷的影响，本就惨淡的堂食门店客流继续下滑，许多以堂食为主的餐饮门店生意萧条，同样受到影 响的，还有依附在餐饮业上讨生活的人们，比如代驾师傅、驻唱歌手、餐饮设备回收商。 而享受过一波补贴红利的外卖商家们发现，平台牢牢把握着流量和补贴的规则，他们被裹挟而进，不得不继续参与补贴，但在扭曲的价格里，想赚以往同 样的钱，付出的辛苦成倍增加。 宿迁为我们展示了，非理性的补贴创造的不是需求，而是泡沫。当狂欢过后，所有的参与者都要一起买单。 一、美食街上，只剩外卖骑手 7月末，宝龙后街一家蹄花店的老板陈莉关掉了她的店铺。在 ...

Group 1: Industry Overview - The ongoing competition in the food delivery market has intensified, with platforms like Meituan and Taobao Flash Sale aggressively issuing coupons to attract customers [1][9] - Meituan's daily order volume has remained above 90 million since June, peaking at 120 million on July 5, while Taobao Flash Sale surpassed 100 million daily orders for three consecutive days in early August [1] - JD.com reported a revenue of 356.7 billion RMB for Q2 2025, a 22.4% year-on-year increase, marking the highest growth rate in nearly three years [1] Group 2: Luckin Coffee Performance - Luckin Coffee achieved a record revenue of 12.359 billion RMB in Q2 2025, a 47.1% year-on-year increase, with a gross merchandise volume (GMV) of 14.179 billion RMB [4][8] - The company opened 2,109 new stores in Q2 2025, bringing the total to 26,206, with 25,117 stores located in China [6][9] - Luckin's net income for the first half of 2025 reached 1.776 billion RMB, a 125.4% increase year-on-year [8] Group 3: Yum China Performance - Yum China reported a revenue of 5.768 billion USD (approximately 410 billion RMB) for the first half of 2025, with a 17% year-on-year increase in delivery sales [12][17] - In Q2 2025, Yum China's total revenue grew by 4% to 2.8 billion USD, with operating profit increasing by 14% to 304 million USD, setting a new record for Q2 [12][17] - The company added 336 new stores in Q2 2025, bringing the total to 16,978, including 12,238 KFC and 3,864 Pizza Hut locations [12][14] Group 4: Market Trends and Consumer Behavior - The rise of delivery platforms has significantly impacted consumer preferences, with younger consumers favoring affordable meal options over traditional instant noodles [18][23] - Instant noodle consumption has declined, with a reported 40 billion fewer packages consumed from 2020 to 2023, and a 2.53% drop in revenue for industry leader Kang Shifu in the first half of 2025 [23] - The shift towards healthier and more convenient food options is evident, as consumers increasingly opt for delivery meals that offer better value compared to instant noodles [23]

Group 1 - The intense "subsidy war" among major food delivery platforms has led to record-breaking order volumes since April, but many restaurant owners report that their profits have not increased and their operations have become more challenging [1] - A restaurant owner calculated that in June, after accounting for various costs including customer subsidies and platform commissions, the net income was significantly reduced, leading to a loss [1] - The owner of a restaurant with a 200 square meter area and 11 employees reported a fixed monthly expense of approximately 90,000 yuan, with the online business resulting in a real profit loss of over 10,000 yuan for June [3] Group 2 - The competitive landscape of food delivery services is characterized by high customer incentives, but this has not translated into profitability for many restaurant operators [1][3] - The financial breakdown of a restaurant's operations highlights the impact of delivery platform fees and subsidies on overall profitability, indicating a trend of "losing money to gain visibility" [3]

Core Insights - The intense "subsidy war" among major food delivery platforms has led to record-breaking order volumes, but many restaurant owners report that their profits have not increased and, in fact, their financial situations have worsened [1][3] - A specific case study from a restaurant owner illustrates that despite a high gross revenue from food delivery orders, the actual profit after accounting for various costs results in a significant loss [1][3] Financial Breakdown - In June, a restaurant received 4,158 orders through Meituan, generating a total revenue of 162,215.8 yuan, but after deducting customer subsidies (30,452.2 yuan), platform commissions (8,409.81 yuan), and delivery service fees (20,919.86 yuan), the net income was 102,433.93 yuan [1] - Fixed monthly expenses for the restaurant, including rent and employee salaries, amount to approximately 90,000 yuan, with about 34,000 yuan allocated to the food delivery business [3] - The cost of ingredients is estimated at 50%, totaling 78,774.4 yuan, leading to a calculated real profit of -10,340.47 yuan for June, indicating a loss despite high sales volume [3]