Core Viewpoint - In 2024, Quanjude, a century-old brand, reported disappointing financial results, indicating challenges in brand expansion and profitability despite its long history [2][3] Financial Performance - Quanjude's revenue for 2024 was 1.402 billion yuan, a year-on-year decline of 2.09% [2] - The net profit attributable to shareholders was 34.13 million yuan, down 43.15% year-on-year [2] - The non-recurring net profit plummeted by 65.79% to 16.14 million yuan [2] - The gross profit decreased by 5.77% in 2024, highlighting the issue of "increasing revenue without increasing profit" [2] Business Structure and Challenges - Quanjude operates 101 stores nationwide and overseas, but the extensive network has not translated into revenue growth [2] - The company faced significant cost pressures, leading to a decline in gross margin, particularly in the East China region where gross margin fell by 5 percentage points, and in Northeast China, which experienced a negative gross margin of 10.56% [2] - The brand's high pricing strategy and misalignment with local consumer habits hindered its success outside Beijing [2] Transformation Efforts - In 2024, Quanjude increased its R&D expenditure by 74%, focusing on innovative dishes and food products, including the launch of 24 new dishes and a new casual food brand "Zero Lab" [3] - However, R&D investment accounted for only 0.33% of revenue, significantly lower than peers, and sales from innovative dishes represented only 16.8% of dine-in revenue [3] - The company reported a loss of 36.32 million yuan in Q4 2024, a year-on-year increase of 210.25%, indicating challenges from seasonal fluctuations and short-term transformation costs [3] Financial Pressure and Future Outlook - Quanjude's cash flow decreased by 19.16%, with accumulated undistributed profits showing a loss of 158 million yuan, leading to two consecutive years without profit distribution [3] - Market observers suggest that to overcome growth bottlenecks, Quanjude must balance standardized expansion, cost control, and marketing to younger consumers [3] - The company is exploring new growth points through new stores in Hainan and community convenience stores, but the effectiveness of these strategies remains to be seen [3]