Core Viewpoint - Baiguoyuan has experienced a significant shift from profit to loss in 2024, reporting a net loss of 3.8 billion yuan, despite a previously stable profit trend from 2020 to 2023 [1][3]. Financial Performance - Baiguoyuan's total operating revenue for 2024 was 10.27 billion yuan, a decrease of 1.12 billion yuan compared to the previous year [3]. - The company's net profits from 2020 to 2023 were 49.06 million yuan, 230.3 million yuan, 323.3 million yuan, and 361.7 million yuan respectively, indicating a consistent growth trend prior to 2024 [3]. Strategic Adjustments - The loss in 2024 is attributed to two main factors: macroeconomic influences and a strategic decision to reduce the number of stores to enhance profitability and quality [5]. - The number of franchise stores decreased from 6,081 in 2023 to 5,116 in 2024, with nearly 1,000 stores closed as part of this strategic shift [5]. - Baiguoyuan's chairman, Yu Huiyong, acknowledged the need to adapt to changing consumer demands for both high quality and low prices, which posed a challenge for the company [5]. Future Outlook - The company views the 3.8 billion yuan loss as a necessary "growing pain" associated with its strategic adjustments, raising questions about its ability to recover and return to profitability [5].