Core Viewpoint - Dongwu Securities initiates coverage on "Yujian Xiaomian" (02408) with a "Buy" rating, highlighting its rapid expansion and clear growth strategy in the Chinese noodle restaurant sector [1] Group 1: Company Overview - Yujian Xiaomian is positioned as a leading brand in the Chinese noodle restaurant market, focusing on Sichuan-Chongqing flavors and standardized operations [1] - The company plans to increase its store count to 465 by November 2025, with over 100 new stores in the pipeline, indicating a strong growth trajectory [1] Group 2: Market Position and Financials - In 2024, Yujian Xiaomian is expected to hold a market share of 0.5% in the Chinese noodle restaurant sector, with revenue projected to grow from 418 million yuan in 2022 to 1.154 billion yuan in 2024, reflecting a CAGR of 66% [1][2] - The company's adjusted net profit is anticipated to reach 63 million yuan in 2024, with a net profit margin of 5%, marking a significant operational turning point [1] Group 3: Expansion Strategy - The company is expected to have around 500 stores by the end of 2025, with plans to surpass 680 stores by 2026 and potentially exceed 900 by 2027, leveraging both price reductions and franchise opportunities [3] - Yujian Xiaomian's store expansion strategy includes penetrating major cities and expanding into second and third-tier cities, as well as increasing its presence in Hong Kong and overseas markets [3] Group 4: Industry Insights - The chain restaurant market is projected to reach 12.6 trillion yuan by 2025, with a CAGR of 11% from 2019 to 2024, indicating a robust growth environment for the industry [2] - The Chinese noodle restaurant segment is expected to grow to 286.6 billion yuan in 2024, with Yujian Xiaomian's transaction volume forecasted at 1.348 billion yuan, showcasing a CAGR of 58.6% from 2022 to 2024 [2]

Core Viewpoint - Dongwu Securities initiates coverage on "Yujian Xiaomian" (02408) with a "Buy" rating, highlighting its rapid expansion and clear growth strategy in the Chinese noodle restaurant sector [1] Group 1: Company Overview - Yujian Xiaomian is positioned as a leading brand in the Chinese noodle restaurant market, focusing on Sichuan-Chongqing flavors and standardized operations [1] - The company plans to increase its store count to 465 by November 2025, with over 100 new stores in preparation, indicating a strong expansion momentum [1] - Revenue is projected to grow from 418 million yuan in 2022 to 1.154 billion yuan in 2024, reflecting a CAGR of 66% [1] Group 2: Market Position and Performance - In 2024, Yujian Xiaomian is expected to hold a market share of 0.5% in the Chinese noodle restaurant sector and 0.14% in the broader Chinese fast food market [1] - The company’s adjusted net profit is forecasted to reach 63 million yuan in 2024, with a net profit margin of 5%, indicating a turning point in profitability [1] - The proportion of directly operated restaurants is expected to increase from 65% in 2022 to 78% in 2024, showcasing a shift towards a more controlled operational model [1] Group 3: Industry Insights - The chain fast food market is projected to reach 12.6 trillion yuan by 2025, with a CAGR of 11% from 2019 to 2024, while the global Chinese cuisine market is expected to reach 8.1 trillion yuan [2] - The Chinese noodle restaurant segment is anticipated to grow to 286.6 billion yuan in 2024, with Yujian Xiaomian's transaction volume expected to reach 1.348 billion yuan, reflecting a CAGR of 58.6% from 2022 to 2024 [2] - Key success factors for Yujian Xiaomian include a focus on differentiated high-potential markets, early adoption of standardization and digitalization, and a successful shopping mall store model [2] Group 4: Expansion Strategy - The company aims to expand its store count to approximately 500 by the end of 2025, with plans to surpass 680 stores by 2026 and 900 by 2027 [3] - Expansion strategies include entering new cities, densifying existing locations in major cities, and increasing presence in Hong Kong and overseas markets [3]

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1]. Core Views - The company is positioned in the first tier of Chinese noodle restaurants, with significant growth potential through accelerated store openings and a focus on standardized operations and digital management [9][24]. - The company has achieved a turning point in profitability, with revenue growth driven by an increase in the number of direct-operated stores [24][25]. - The report highlights the company's strategic focus on the high-potential Sichuan-Chongqing flavor segment, which is expected to grow significantly in the coming years [56]. Summary by Sections 1. Company Overview - As of November 2025, the company operates 451 restaurants in 22 cities in mainland China and 14 in Hong Kong, with plans for 115 new openings [9][15]. - The company has seen revenue growth from 418 million to 1.154 billion yuan from 2022 to 2024, with a CAGR of 66% [24]. 2. Market Positioning - The company holds a 0.5% market share in the Chinese noodle restaurant sector, ranking fourth among competitors [53]. - The global Chinese cuisine market is projected to reach 8.1 trillion yuan by 2024, with significant contributions from overseas markets [46]. 3. Store Expansion Strategy - The company plans to increase its store count to approximately 500 by the end of 2025 and aims to surpass 900 by 2027 through both vertical and horizontal expansion strategies [9][71]. - The majority of new stores will be direct-operated, with a focus on high-traffic shopping centers, which accounted for 64% of the store count in 2024 [67][69]. 4. Financial Projections - Revenue forecasts for 2025-2027 are 16.55 billion, 24.42 billion, and 33.81 billion yuan, with year-on-year growth rates of 43%, 48%, and 38% respectively [1]. - The net profit for the same period is projected to be 1.33 billion, 2.43 billion, and 3.88 billion yuan, with growth rates of 119%, 83%, and 60% respectively [1].