Core Viewpoint - The company, Gu Ming, is the largest mid-priced tea beverage brand in China, focusing on fresh and high-quality products to attract and retain consumers, supported by a robust supply chain and extensive store network [1][2][3] Company Overview - Gu Ming has established itself as a leading brand in the mid-priced tea beverage sector, with a slogan that emphasizes daily consumption without fatigue, offering a diverse range of fresh and delicious products at affordable prices [1] - The company has a significant presence in second-tier and lower cities, with a leading number of stores and the largest cold chain logistics system in the industry [1] Product Strategy - The product logic is defined by "fresh and high quality," with a focus on consistent product offerings and competitive pricing to drive consumer repurchase [2] - Gu Ming employs a strategy of large-scale procurement of fresh fruits and self-built cold chain logistics to enhance cost control and quality assurance, supporting store expansion [2] Market Potential - The mid-priced tea beverage segment is expected to grow rapidly, with the market size projected to exceed 500 billion yuan during the 14th Five-Year Plan period, with a compound annual growth rate (CAGR) of nearly 15% [3] - There is significant room for market share consolidation in the mid-priced tea segment, with Gu Ming positioned to increase its market share due to its strong supply chain and store management [3] Financial Projections - Gu Ming is expected to achieve adjusted net profits of 2.19 billion, 2.50 billion, and 2.88 billion yuan for the years 2025 to 2027, reflecting year-on-year growth rates of 44%, 14%, and 15% respectively [3] - The company maintains a "buy" rating, with projected price-to-earnings (PE) ratios of 24, 21, and 18 times for the same period [3]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company is positioned as a leading brand in the mid-priced tea beverage market, focusing on fresh and high-quality products while expanding its store network in lower-tier cities [8][14] - The company has a robust supply chain and logistics system, which supports its operational efficiency and product freshness, contributing to its competitive advantage [8][39] - The mid-priced tea beverage market is expected to grow significantly, with the company projected to increase its market share and store count in the coming years [8][14] Summary by Sections 1. Company Overview - The company is the largest mid-priced tea beverage brand in China, with a focus on fruit tea, milk tea, and coffee [14] - As of the first half of 2025, the company has 11,179 stores and a terminal GMV of 22.4 billion RMB [14][15] - The company employs a unique regional strategy to optimize its store distribution and supply chain efficiency [14][24] 2. Product Strategy - The company emphasizes a product logic of "fresh and high-quality," with a focus on frequent product updates and maintaining consistent quality [39] - The menu typically features around 30 SKUs, with a pricing strategy that keeps most products under 15 RMB [40][50] - The company has successfully captured consumer trends and adapted its offerings accordingly, leading to strong sales performance [49][51] 3. Market Dynamics - The domestic ready-to-drink tea market is expected to exceed 500 billion RMB during the 14th Five-Year Plan period, with a CAGR of nearly 15% [8][39] - The company is well-positioned to benefit from market consolidation opportunities within the mid-priced segment [8][39] - Consumer repurchase rates are critical for market share, and the company has demonstrated strong performance in this area due to its supply chain and operational management [8][39] 4. Financial Projections - The company is projected to achieve adjusted net profits of 2.19 billion, 2.50 billion, and 2.88 billion RMB for the years 2025 to 2027, representing year-on-year growth rates of 44%, 14%, and 15% respectively [1][8] - The report maintains previous profit forecasts, with corresponding P/E ratios of 24, 21, and 18 times for the same period [1][8]