Investment Rating - The report maintains an "Accumulate" rating for the company with a target price of 515.11 HKD, compared to the last closing price of 460.40 HKD [1]. Core Insights - The company reported better-than-expected performance, with a total revenue of 14.875 billion HKD for H1 2025, reflecting a year-on-year growth of 39.3%, and a net profit of 2.718 billion HKD, up 44.1% year-on-year [4][6]. - The number of stores exceeded 53,000, with a net increase of 6,535 stores since the beginning of the year, indicating a faster-than-expected expansion in domestic store openings [5][6]. - The company's gross margin remains stable at 31.6%, with a net profit margin of 18.3%, showing strong profitability despite rising raw material costs [6][7]. Financial Performance - For H1 2025, the revenue breakdown by business segment includes product sales at 13.843 billion HKD, equipment sales at 652 million HKD, and franchise and related services at 380 million HKD, with respective year-on-year growth rates of 39.5%, 42.3%, and 29.8% [5]. - The company expects revenue growth rates of 34%, 17%, and 16% for 2025, 2026, and 2027, respectively, with net profit growth rates of 37%, 17%, and 17% for the same years [7][8]. - The earnings per share (EPS) are projected to be 15.98, 22.34, and 29.17 HKD for 2025, 2026, and 2027, respectively, with corresponding price-to-earnings (PE) ratios of 26x, 22x, and 19x [7][8]. Store Expansion and Market Position - The company has a total of 53,014 stores, with 52,996 being franchise stores and 18 direct stores, indicating a strong franchise model [5]. - The geographical distribution shows 48,281 stores in mainland China and 4,733 overseas, with a net increase of 6,687 stores in China and a decrease of 162 overseas [5]. - The company has established significant barriers in product, supply chain, and channel, positioning itself strongly in the market despite potential challenges from external factors [6][7].