Core Viewpoint - The company is committed to a platform-based strategic transformation, optimizing existing stores, rapidly expanding partner stores, and validating a community space composite model, which is expected to support performance recovery as the consumption environment improves and new business models are established [1] Group 1: Store Network and Expansion - The total number of stores increased from 560 at the end of 2024 to 580 in H1 2025 [1] - The number of store types at the end of the reporting period included 109 direct-operated, 39 franchised, and 432 partner taverns, with partner stores accounting for 74.5% of the network expansion [1] - The distribution of stores saw an increase in third-tier and below cities, with a net addition of 24 stores in these areas [1] - The company restarted its direct-operated store plan in May 2025, aiming to upgrade store environments and improve operational performance [1] Group 2: Sales Performance and Profitability - In H1 2025, the overall daily sales for direct-operated and franchised taverns rose to 8,300 yuan, a year-on-year increase of 10.7% [2] - Daily sales in first, second, and third-tier cities were 9,000, 8,800, and 7,700 yuan respectively, with year-on-year increases of 3.4%, 18.9%, and 6.9% [2] - Partner taverns experienced a decline in daily sales to 4,200 yuan, a year-on-year decrease of 22.2% [2] - Despite revenue pressures, the company's profitability showed resilience, with gross margins for direct-operated taverns increasing from 70% to 74% [2] - Significant cost reductions were achieved through lower rent and improved employee efficiency, leading to a year-on-year increase in operating profit margins for same-store sales [2] Group 3: Strategies for Enhancing Same-Store Performance - The company plans to enhance same-store performance through performance incentives, optimizing store operations, and strengthening marketing systems [3] - The focus remains on platform-based development, with continued expansion of partner stores and a restart of direct-operated store growth [3] - The company aims to strengthen its core competencies in supply chain management and space environment creation while exploring new third-space models [3]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance in the coming months [6]. Core Views - The company is undergoing a platform transformation, with a focus on expanding its partner store network while restarting its direct store opening plan. This strategy aims to enhance operational efficiency and improve customer experience [2][4]. - Despite a decline in revenue and same-store sales, the company's profitability shows resilience due to effective cost management and supply chain improvements [3][4]. Summary by Sections Financial Performance - For the first half of 2025, the company reported revenue of 290 million yuan, a year-on-year decrease of 34.0%, and a net profit of 50 million yuan, down 27.8%. Same-store daily sales fell by 17.6% [1]. - The company declared an interim dividend of 146 million yuan [1]. Store Network Expansion - The total number of stores increased from 560 at the end of 2024 to 580 in the first half of 2025. The breakdown of store types includes 109 direct stores, 39 franchised stores, and 432 partner stores, with the latter accounting for 74.5% of the total store network [2]. - The company has restarted its direct store opening plan, aiming to enhance store environments and reduce costs through new openings in both existing and new markets [2]. Sales and Profitability - The overall daily sales for direct and franchised stores rose to 8,300 yuan, reflecting a year-on-year increase of 10.7%. However, partner stores faced pressure, with daily sales dropping to 4,200 yuan, a decline of 22.2% [3]. - The gross margin for direct stores improved from 70% to 74%, showcasing enhanced supply chain management capabilities [3]. Strategic Initiatives - The company plans to improve same-store performance through various initiatives, including performance incentives, operational optimization, and marketing enhancements [4]. - The ongoing platform strategy aims to strengthen core competencies in supply chain management and explore new business models [4]. Future Projections - Revenue projections for 2025 to 2027 are estimated at 650 million yuan, 790 million yuan, and 950 million yuan, respectively, with net profits expected to be 100 million yuan, 130 million yuan, and 160 million yuan [4][5]. - The current stock price corresponds to a price-to-earnings ratio of 16.9x for 2025, 13.4x for 2026, and 10.7x for 2027 [4][5].