Core Viewpoint - Hema NB has achieved significant growth in revenue and store expansion, indicating a successful strategy in the competitive retail market [6][9]. Group 1: Financial Performance - In the first half of the year, Hema NB's revenue reached approximately 8 billion yuan, showing a double-digit growth compared to the same period last year [6]. - The total number of stores has nearly doubled to around 300 within just six months, primarily concentrated in core urban and suburban areas of East China [6]. Group 2: Brand Strategy and Market Positioning - Hema NB is undergoing a rebranding process, with plans to change its name to "Super Box Calculation NB," reflecting its maturity and market readiness [7]. - The brand aims to differentiate itself from Hema Fresh, targeting a different consumer segment that prefers lower-priced, community-oriented shopping experiences [7][9]. Group 3: Product Offering and Pricing Strategy - Hema NB focuses on a simplified supply chain and a high proportion of private label products, which helps maintain low prices [8]. - For example, Hema NB offers a 450g grain-fed beef roll for 19.9 yuan, significantly lower than competitors [8]. Group 4: Operational Strategy - Hema NB has opened online delivery services, with an expected online sales contribution of around 30% [7]. - The company is actively recruiting sorting staff in multiple cities to enhance its delivery capabilities [7]. Group 5: Future Growth and Expansion Plans - Hema aims to achieve a GMV of 100 billion yuan by the end of 2024, with an annual GMV of 75 billion yuan reported as of March this year [9]. - The company plans to continue expanding both Hema Fresh and Hema NB stores while ensuring a balance between the two formats to avoid competition for customer traffic [9].

Core Insights - Hema NB achieved approximately 8 billion yuan in revenue in the first half of the year, reflecting double-digit growth compared to the same period last year [1] - The total number of stores has nearly doubled to around 300, primarily concentrated in core urban and suburban areas of East China [1] Business Strategy - Hema NB has launched its own brand "Super Box Calculation," with hundreds of products including rice, vegetarian options, paper towels, fresh milk, and ice cream undergoing rebranding [2] - The rebranding signifies Hema NB's maturity and its strategic separation from Hema Fresh, allowing for differentiated products and services in a tiered consumption environment [2][4] - Hema NB primarily targets community shopping areas, with an average transaction value of around 40 yuan, and 45% of its offerings focused on fresh produce [2] Supply Chain and Pricing - Hema NB maintains a low-price advantage through a streamlined supply chain and a high proportion of private label products, with over 50% of sales coming from self-branded items [3] - Price comparisons show that Hema NB's products are approximately 30% cheaper than those at Hema Fresh, with specific examples highlighting significant price differences [3] Future Goals and Expansion - Hema aims to achieve a GMV of 100 billion yuan by the end of 2024, with an annual GMV of 75 billion yuan reported as of March this year [4] - The company is on an expansion trajectory, opening new Hema Fresh stores while also accelerating the establishment of Hema NB locations [4][5] - Hema must balance the number and location of its store types to avoid competition for customer traffic between small and large stores [5]

Core Insights - Hema NB's revenue reached approximately 8 billion yuan in the first half of the year, showing double-digit growth compared to the same period last year [4] - The total number of stores has nearly doubled to almost 300, primarily located in core urban areas and suburbs of East China [4] - Hema NB is undergoing a rebranding process, with plans to change its name to "Super Box Calculation NB" [5] Business Strategy - Hema NB has matured over the years, with a clear strategic focus on two business models: Hema Fresh and Hema NB, allowing for brand differentiation in a tiered consumption environment [6] - The average transaction value at Hema NB is around 40 yuan, with fresh food accounting for 45% of sales, targeting consumers who previously preferred traditional markets [6] - Online sales are expected to account for about 30% of total sales, with recruitment for sorting staff ongoing in multiple cities [7] Product Offering and Pricing - Hema NB's product sourcing includes over 50% from its own brand, focusing on fresh produce, baked goods, and daily necessities [7] - The simplified supply chain and high proportion of private label products help maintain competitive pricing, with significant price advantages over competitors [7] - Hema NB is a continuation of Hema's exploration in discount retail, with some stores previously under Hema's discount model being converted to Hema NB [8] Leadership and Future Goals - Under CEO Yan Xiaolei, Hema has achieved annual profitability through product reform and a focus on core business models [8] - A new goal has been set for Hema to reach an annual GMV of 100 billion yuan within three years, with current GMV at 75 billion yuan as of March [9] - Hema plans to continue expanding its store network while balancing the growth of different store formats to avoid competition for customer traffic [9]

Core Viewpoint - Wancheng Group plans to acquire the remaining 49% stake in Wanyou for a cash payment of 1.379 billion yuan, indicating steady operational progress [1] Group 1: Acquisition Details - The acquisition is based on performance commitments, with net profits for 2025-2027 not lower than 320 million, 330 million, and 350 million yuan respectively [1] - The estimated acquisition valuation corresponds to approximately 8.8 times price-to-earnings (PE) ratio based on the 2025 performance target [1] Group 2: Market Concerns and Opportunities - There are market concerns regarding the impact of same-store sales decline on opening space, but the decline is attributed to a significant number of new store openings planned for 2024 [1] - The overall investment recovery cycle for leading snack brands remains attractive for franchisees, suggesting continued opening opportunities [1] Group 3: Business Model and Competitive Advantage - The company is actively refining its cost-saving supermarket model, with discount formats in community settings experiencing significant growth [1] - Demand-driven development of discount formats is maturing, and Wancheng Group maintains a strong competitive advantage in community retail [1] - The acquisition of minority stakes is expected to enhance the parent company's profits [1] Group 4: Financial Projections - The company forecasts revenues, net profits, and net profits attributable to the parent company for 2025-2026 to be 5.27 billion, 1.90 billion, 990 million yuan and 6.56 billion, 2.64 billion, 1.43 billion yuan respectively [1]

Core Viewpoint - The company plans to acquire 49% of Nanjing Wanyou Commercial Management Co., Ltd. for cash, enhancing its stake to approximately 75% post-acquisition, which is expected to positively impact its net profit in the coming years [1][2]. Group 1: Acquisition Details - The cash acquisition price is set at 1.379 billion yuan, with the company’s net profit projected to increase from 358 million yuan to 416 million yuan for the period of January to May 2025, resulting in an estimated valuation of around 10X PE [2]. - The performance commitment for Wanyou includes a minimum net profit of 320 million, 330 million, and 350 million yuan for the years 2025, 2026, and 2027 respectively, leading to a valuation of approximately 8.8X PE based on the 2025 target [2]. Group 2: Share Transfer and Team Incentives - A total of 9.89 million shares, representing 5.27% of the total share capital, will be transferred to core team member Zhou Peng at a price of 128.3 yuan per share, totaling approximately 1.269 billion yuan [3]. - Zhou Peng and his spouse will delegate voting rights of 12.29 million shares (6.55% of total shares) to the actual controller Wang Zenin after the transfer [3]. Group 3: Financial Performance and Projections - For the period of January to May 2025, the company achieved a revenue of 18.84 billion yuan and a net profit of 668 million yuan, with a net profit margin of 3.55% [4]. - The company expects the proportion of net profit attributable to the parent company to increase from 53.7% to 63.4% post-acquisition, representing an 18% increase [4]. - Revenue and net profit projections for 2025-2026 are estimated at 52.7 billion yuan and 1.9 billion yuan, and 65.6 billion yuan and 2.64 billion yuan respectively, maintaining a "buy" rating for the company [4].

Investment Rating - The report maintains an "Accumulate" rating for the industry [5] Core Insights - The report highlights the rapid expansion of the multi-category discount retail format, with "零食有鸣" leading the way in this transformation. The company has established over 4,000 stores by the end of 2024, with a significant increase in the number of stores opening in 2025 [1][3] - The discount retail format is seen as a response to insufficient overall demand and excess supply, similar to trends observed in the retail markets of the US and Japan. This format is expected to capture a significant market share [20] Summary by Sections Section 1: Market Development - "零食有鸣" has pioneered the multi-category discount retail format, opening its first store in Chengdu in 2021 and expanding to over 4,000 stores by the end of 2024. The company opened 189 new stores during the 2024 National Day holiday, surpassing 1,500 stores by April 2025 [1][11] - The company focuses on community-based locations, targeting local residents and students, which positions it well against traditional small supermarkets [12] Section 2: Product Categories and Pricing - The product mix includes snacks, beverages, daily necessities, and seasonings, with snacks occupying approximately 50% of shelf space. The pricing strategy emphasizes value, with many products priced at 70-80% of nearby supermarkets and online platforms [2][16] - The high proportion of private label products in the daily necessities category is expected to enhance profitability and meet diverse community needs [16][19] Section 3: Supply Chain and Operational Efficiency - The report indicates that the category adjustments are minimal, allowing for easier operational scalability. The company is expected to establish direct partnerships with suppliers as it continues to expand its store network [3][20] - The report emphasizes the importance of supply chain efficiency, which is crucial for the success of the discount retail model, particularly in the early stages of multi-category expansion [20]

Investment Rating - Maintain "Add" rating for the industry [5] Core Viewpoints - The retail channel transformation is accelerating, with significant potential in discount formats. The expansion of discount systems from snack categories to larger categories such as daily chemicals and grains is expected to cover more consumer groups and increase purchase frequency. The development of community multi-category discount formats is anticipated to further impact traditional supermarkets positively [4][28]. - The report highlights the emergence of new opportunities for brands as supermarkets optimize their supply chain and profit distribution mechanisms, benefiting upstream brand development while enhancing product iteration and quality focus from a consumer perspective [28][29]. Summary by Sections 1. Discount Supermarket Grassroots Research - The first "Lai You Pin" discount supermarket opened in Hefei on January 10, marking a shift from hard discount snacks to a multi-category discount supermarket format. The store includes snacks, daily chemicals, grains, frozen products, and more, with snack category share decreasing to approximately 45% [11][12]. - "Zhao Yi Ming" discount supermarket is expanding its product categories, primarily focusing on snacks while adding daily chemicals and baked goods. The price perception is strong, with items like freshly made sausages priced at 1.5 yuan each [19][22]. 2. Investment Recommendations - The report suggests that the discount format has ample room for growth, with the potential to cover a broader consumer base and increase purchase frequency. The ongoing evolution of retail channels is expected to accelerate, drawing parallels with market developments in the US and Japan [4][28]. - Supermarkets are optimizing their product selection and enhancing service quality, which presents new growth opportunities for quality-focused brands [28][29]. 3. Retail Channel Transformation - The report notes that the discount supermarket model is supported by mature supply chain operations and digital management systems, with leading systems already having a scale of over ten thousand stores [4][28]. - The expansion of private label brands by major retailers is expected to enhance cost advantages and create competitive pressure on upstream production brands [29].