Core Viewpoint - The company, Mingming Hen Mang, is a leading player in the snack retail industry, focusing on high-quality products and rapid expansion through a franchise model, aiming to reach over 10,000 stores by 2024 [3][4]. Group 1: Business Model and Expansion - The company operates two brands, "零食很忙" and "赵一鸣," and has opened its first store in 2017, achieving over 1,000 stores by 2023 and targeting 14,394 stores by the end of 2024 [3]. - The franchise model allows for rapid expansion, with 7,241 franchisees by the end of 2024, adding 3,950 new franchisees in the year [4]. - The company has a strong presence in lower-tier markets, covering 1,224 counties with a 66% coverage rate in county towns [4]. Group 2: Financial Performance - The average revenue per store in 2024 is projected to be 5.67 million yuan, with an average transaction value of approximately 35 yuan and daily sales volume of 452 transactions [4]. - The company's gross merchandise volume (GMV) reached 55.5 billion yuan in 2024, with a gross margin of about 20% based on a 13% tax rate [5]. Group 3: Supply Chain and Product Offering - The company collaborates directly with suppliers to reduce supply chain costs, offering a wide range of products with 3,380 SKUs, of which 25% are custom-made [6]. - Each store maintains at least 1,800 SKUs, which is double the average for similar-sized supermarkets, enhancing product variety and customer experience [6]. - The company has a low dependency on single suppliers, with over 2,300 collaborating manufacturers, and offers products at prices approximately 25% lower than similar products in offline supermarkets [6]. Group 4: Logistics and Inventory Management - The company operates 36 warehouses, with 25 being self-operated, allowing for efficient logistics within a 300 km radius for timely delivery [7]. - The inventory turnover days are 11.6 days, which is lower than other supermarkets, indicating high efficiency in inventory management [7]. - Logistics costs accounted for 1.7% of revenue in 2024, with expectations of reduction as the company expands its store network [7].

Investment Rating - The investment rating for the company has been upgraded to "Buy" [6][4]. Core Views - The company reported a significant increase in revenue and net profit for Q1 2025, with revenue reaching 10.821 billion RMB, a year-over-year increase of 124.02%, and a net profit of 215 million RMB, reflecting a year-over-year increase of 3344.13% [1][2]. - The company's strong brand momentum and competitive strength in the industry have been validated, leading to an optimistic outlook for the company's profitability and market position [1][3]. Summary by Sections Financial Performance - In Q1 2025, the company's volume snack business generated revenue of 10.7 billion RMB, up 128% year-over-year, driven by an increase in store numbers, although same-store sales showed a slight decline [2]. - The net profit margin for the volume snack business improved significantly to 3.85%, an increase of 1.1 percentage points from the previous quarter, attributed to reduced marketing expenses and improved subsidies to merchants [2]. Strategic Initiatives - The company has announced a stock incentive plan, granting approximately 1.2% of current share capital, with performance targets set for net profit growth over the next four years [3]. - This initiative indicates the company's commitment to deepening its presence in the volume snack sector and reflects confidence in achieving substantial growth [3]. Profit Forecast and Valuation - The profit forecasts for 2025-2027 have been revised upwards, with expected net profits of 820 million RMB, 1.14 billion RMB, and 1.41 billion RMB respectively, representing increases of 23%, 38%, and 54% [4][10]. - The target price for the company's shares has been raised to 182.22 RMB, based on a projected PE ratio of 40 times for 2025, reflecting the company's strong competitive position and growth potential in the volume snack industry [4][7].

Investment Rating - The investment rating for the company is "Buy" [2] Core Views - The company demonstrated strong competitive advantages in its business model, with a significant revenue increase of 124% year-on-year in Q1 2025, reaching 10.82 billion yuan, and a notable rise in net profit to 215 million yuan from 6 million yuan in Q1 2024 [1][2] - The snack retail business achieved revenue of 10.69 billion yuan in Q1 2025, with a net profit margin of 3.85%, reflecting a sequential improvement of 1.11 percentage points from Q4 2024 [2] - The company is expected to maintain a strong return on equity (ROE) of 47.1% in 2025, with projected net profits of 978 million yuan and a revenue forecast of 54.77 billion yuan [3] Summary by Sections Revenue and Profitability - The company reported total revenue of 10.82 billion yuan in Q1 2025, a 124% increase year-on-year, and a net profit of 215 million yuan, compared to 6 million yuan in Q1 2024 [1][2] - The gross profit margin for Q1 2025 was 11%, an increase of 1.2 percentage points year-on-year, while the sales expense ratio and management expense ratio decreased by 0.7 and 0.5 percentage points, respectively [2] Business Model and Competitive Advantage - The company’s snack retail business continues to show strong competitive advantages, with a significant number of stores (14,196) contributing to its market position [2] - The business model is characterized by "low margin, high turnover," with inventory turnover days maintained at 15-16 days, indicating efficient inventory management [2] Future Projections - Revenue and net profit forecasts for 2025 and 2026 are 54.77 billion yuan and 19.2 billion yuan, and 67.19 billion yuan and 25.3 billion yuan, respectively, with an upward adjustment in net profit for 2025 to 980 million yuan [2][3] - The company is expected to continue improving its return on equity, with projections of 47.1% in 2025 and 38.7% in 2026 [3]