Investment Rating - The report maintains an investment rating of "Buy" for the company with a target price of HKD 4.50 [1][10]. Core Insights - The company is expected to achieve revenue of HKD 1.85 billion to HKD 2.05 billion in Q3 2025, representing a year-on-year growth of 13.6% to 25.8%. The core operating profit is projected to be between HKD 65 million and HKD 75 million, reflecting a year-on-year increase of 44.4% to 66.7% [6][10]. - The company continues to see strong same-store sales growth and improved profitability driven by category expansion, membership system development, and refined operations. The net increase of 361 stores in Q3 aligns with the goal of adding 1,000 new stores by year-end [6][7]. - The company is focusing on product innovation and operational efficiency, with plans to launch new product lines and enhance its supply chain capabilities [9][10]. Financial Performance - Revenue projections for the upcoming years are as follows: - 2024: RMB 6.47 billion - 2025: RMB 7.78 billion - 2026: RMB 9.05 billion - 2027: RMB 10.51 billion This indicates a growth rate of 6.16% in 2024 and 20.23% in 2025 [5][15]. - The net profit attributable to the parent company is forecasted to be: - 2024: RMB 230.56 million - 2025: RMB 441.15 million - 2026: RMB 547.95 million - 2027: RMB 676.78 million This reflects a significant increase of 91.34% in 2025 [5][15]. Business Strategy - The company is accelerating its store opening strategy, with a net increase of 361 stores in Q3 and a total of 616 stores added in the first three quarters. The Q4 is expected to see a further acceleration in openings due to seasonal demand [7][8]. - The company is enhancing its membership system, which has grown to 5.03 million registered members, and is leveraging live streaming and community events to drive customer engagement [7][9]. - The introduction of new product lines, such as the "One Sauce Makes a Dish" series, and the launch of a new dining concept, "Guoquan Stir-fry," are part of the company's strategy to diversify its offerings and attract more customers [9][10].

Core Viewpoint - The controversy surrounding the restaurant chain Xibei, triggered by a critical social media post from entrepreneur Luo Yonghao, highlights the blurred lines between "pre-prepared dishes" and "pre-prepared processes" in the modern dining industry, raising consumer awareness about their rights [2][3] Company Overview - Xibei, founded by Jia Guolong in 1999, has grown into a national dining brand with over 360 locations and annual revenue exceeding 2 billion yuan at its peak, built on strong brand recognition, high average spending, and a focus on service experience [2][3] - The company initially focused on traditional dining but has attempted to pivot towards fast food through various sub-brands since 2015, aiming to replicate the success of global fast-food giants like McDonald's and KFC [3][5] Challenges Faced - Jia Guolong's attempts to standardize fast food offerings have led to operational inefficiencies, with slow service times and low table turnover rates, contradicting the fast-food model that prioritizes speed and cost-effectiveness [5][6] - The sub-brands have suffered from poor brand positioning and naming, leading to consumer confusion and low repeat purchase rates, as they failed to clearly communicate their value propositions [6][8] Strategic Missteps - The pricing strategy of the sub-brands has placed them in a "pricing trap," where they cannot compete effectively with either low-cost fast food or established chain brands, resulting in a lack of customer interest [6][8] - The organizational structure of Xibei, which is oriented towards traditional dining, lacks the necessary capabilities for fast food operations, leading to operational mismatches and consumer dissatisfaction [8][9] Future Direction - In June 2024, Jia Guolong announced a strategic shift, elevating "Jia Guolong Small Pot Beef" to a new growth line, moving away from low-cost fast food and refocusing on maximizing customer value and enhancing brand experience [9][10] - The lessons learned from the failed sub-brands emphasize the importance of sustainable profitability over mere expansion, suggesting that a more tailored approach to scaling in the Chinese dining market may be more effective than blindly pursuing the "ten-thousand store" model [9][10]