Core Viewpoint - The company reported a slight revenue increase in 1H25, driven by improved performance in the takeaway channel and a focus on operational quality optimization, while maintaining a "buy" rating for future growth potential [1][4]. Financial Performance - 1H25 revenue reached 2.499 billion yuan, a year-on-year increase of 4.3%, with net profit attributable to shareholders at 326 million yuan, up 37.48% year-on-year, resulting in a net profit margin of 13.0%, an increase of 3.1 percentage points [1]. - Adjusted net profit for 1H25 was 340 million yuan, down 13.81% year-on-year, with an adjusted net profit margin of 13.6%, a decrease of 2.9 percentage points [1]. Revenue Breakdown - Product sales revenue was 2.309 billion yuan, up 7.78% year-on-year, while equipment sales revenue dropped to 48 million yuan, down 62.05% year-on-year [1]. - Franchise and licensing fee income was 101 million yuan, a year-on-year increase of 2.37%, with non-refundable initial fees contributing 46 million yuan, up 4.97% [1]. Operational Adjustments - The company opened 48 new stores in 1H25, bringing the total to 8,444 stores, while actively controlling the pace of expansion to focus on operational quality [1][3]. - The company has increased its presence in lower-tier cities, with 65.3% of stores located in these areas as of 1H25 [3]. Product and Marketing Strategy - The gross margin improved to 32.6%, an increase of 0.9 percentage points, attributed to supply chain and delivery efficiency [2]. - The company launched 55 new products in 1H25, significantly increasing the frequency of new product introductions compared to 21 in 1H24 [2]. Future Outlook - The company expects to accelerate store openings in the future, with revised net profit forecasts for 2025-2027 at 892 million, 1.003 billion, and 1.142 billion yuan, respectively [4]. - The target price is set at 12.11 HKD, reflecting a premium valuation based on the company's growth potential and operational adjustments [4].

Investment Rating - The report maintains a "Buy" rating for the company [7] Core Views - The company reported a revenue of 2.499 billion CNY for 1H25, representing a year-on-year increase of 4.3%, and a net profit attributable to the parent company of 326 million CNY, up 37.48% year-on-year, with a corresponding net profit margin of 13.0%, an increase of 3.1 percentage points year-on-year [1] - The company is focusing on optimizing operational quality and controlling the pace of store expansion, with a net increase of 48 stores in 1H25, bringing the total to 8,444 stores [1] - The company is expected to accelerate store openings in the second half of the year, alongside improvements in operational efficiency and revenue growth [1] Revenue and Profitability - The company's product sales revenue for 1H25 was 2.309 billion CNY, a year-on-year increase of 7.78%, while equipment sales revenue decreased by 62.05% to 48 million CNY [2] - The franchise and licensing fee income was 101 million CNY, up 2.37% year-on-year, with non-refundable initial fees contributing 46 million CNY, an increase of 4.97% [2] Gross Margin and New Product Launches - The gross margin for 1H25 was 32.6%, an increase of 0.9 percentage points year-on-year, attributed to supply chain and delivery efficiency improvements [3] - The company launched 55 new products in 1H25, significantly increasing the frequency of new product introductions compared to 21 in 1H24 [3] Store Operations and Expansion - As of the end of 1H25, the company operated 8,444 stores, with a year-on-year increase of 0.7%, focusing on penetrating lower-tier markets [4] - The company has also been expanding internationally, opening stores in several countries including South Korea, Malaysia, and the United States [4] Profit Forecast and Valuation - The report raises the profit forecast for the company, projecting net profits of 892 million CNY, 1.003 billion CNY, and 1.142 billion CNY for 2025, 2026, and 2027 respectively, with corresponding EPS of 0.60, 0.68, and 0.77 CNY [5] - The target price is set at 12.11 HKD, reflecting a valuation premium based on the company's growth potential [5]