Core Insights - Guoquan is the largest one-stop brand for at-home meal solutions in China, achieving retail sales of RMB 11.1 billion with a 3% market share in 2022 [1] - The company generated approximately RMB 6.5 billion in sales and RMB 230 million in profit in 2024, operating 10,150 stores across China [1] Product and Business Model - Guoquan employs a Consumer-to-Factory (C2F) model, providing advantages such as quick delivery, good quality, and a wide variety of products, with over 700 SKUs and 400 new SKUs introduced annually [2] - The vertically integrated supply chain allows Guoquan to offer prices that are roughly 10% to 80% lower than competitors like Meituan Xiaoxiang, Yonghui, and Haidilao, securing leadership in hotpot, barbecue, and set meal categories [2] - Innovative product offerings, such as the "Ox trip dreedom hotpot set," sold 5 million units and generated RMB 500 million in just 7 months in 2024, showcasing the effectiveness of product innovation [2] Channel Strategy and Growth - Guoquan has leveraged Douyin for user acquisition and revamped its membership program, resulting in a 48% increase in members and a 37% growth in prepaid card sales, nearing RMB 1 billion [3] - Store upgrades, including 24-hour formats in higher-tier cities and larger stores in lower-tier cities, have driven significant same-store sales growth (SSSG) of approximately 5% and over 20% respectively [3] - Forecasted sales growth of 17% and net profit CAGR of 42% from FY24 to FY27, with net profit margin expected to rise to 6.4% by FY27, driven by product launches, channel expansion, and improved customer retention strategies [3] Valuation and Investment Thesis - The company is initiated with a BUY rating and a target price of HK$ 4.80, based on a 23x FY26E P/E ratio, reflecting a premium valuation due to its integrated business model, extensive store network, strong brand equity, and rapid sales growth [3] - The valuation represents a 4% discount compared to peers' average and a 32% premium over the median [3]