Core Viewpoint - Hunan Mingming Hen Mang Commercial Chain Co., Ltd. has officially submitted its listing application to the Hong Kong Stock Exchange, focusing on a "low-margin, high-volume" business model that emphasizes supply chain optimization and efficient operations to provide high-quality snacks at lower prices [1][3]. Group 1: Business Model and Strategy - The company maintains a net profit margin of approximately 2.3% from 2022 to 2024, leveraging a "low-margin, high-volume" philosophy [3]. - Mingming Hen Mang employs a direct procurement model with manufacturers, enhancing bargaining power through large-scale purchases, with about 25% of its 3,380 SKUs sourced from customized manufacturer collaborations [3]. - The company has optimized its logistics and warehousing costs to 1.5%-1.7% of revenue, allowing for price reductions for consumers and franchisees [3]. Group 2: Market Penetration and Consumer Accessibility - The company targets lower-tier markets, providing high-quality snacks at competitive prices, breaking traditional retail barriers in county and town markets [5]. - Mingming Hen Mang has opened over 14,000 stores nationwide by the end of 2024, with 58% located in county and town areas, offering products at an average price 25% lower than traditional supermarkets [1][5]. - The company has customized 25% of its products to fit local tastes and has introduced small packaging strategies to lower the trial cost for consumers [5]. Group 3: Franchise Model and Profitability - The company's revenue model is heavily reliant on franchise sales, with 99.5% of income coming from franchise and direct store sales, while franchise fees account for less than 0.5% [7]. - Mingming Hen Mang's franchise model focuses on mutual profit, enhancing operational efficiency for franchisees through a smart product selection system and dual supervision [7]. - The average operational efficiency of franchisees has significantly improved, as evidenced by franchisee testimonials [7]. Group 4: Financial Performance and Future Plans - The company projects a GMV of 55.5 billion yuan for 2024, with over 1.6 billion transactions, and has improved its net profit margin from 1.7% to 2.1% despite low gross margins of 7.5%-7.6% [9]. - Over 60% of the funds raised from the IPO will be allocated to supply chain upgrades and optimizing the county-level store network, reinforcing its competitive advantage in lower-tier markets [9].