Core Viewpoint - The stock price of Laiyifen has experienced a decline of 17.90% year-to-date, with a recent drop of 2.01% on October 29, 2023, indicating potential challenges in the company's market performance [1]. Company Overview - Laiyifen, established on July 2, 2002, and listed on October 12, 2016, is headquartered in Xuhui District, Shanghai, and specializes in the chain operation of snack foods [1]. - The company's revenue composition includes: meat and aquatic products (24.21%), candies and preserved fruits (21.10%), nuts and beans (18.35%), pastries and puffed foods (14.16%), other food categories (14.15%), non-food items (1.66%), and rental business (0.21%) [1]. Financial Performance - For the first half of 2025, Laiyifen reported a revenue of 1.94 billion yuan, reflecting a year-on-year growth of 8.21%, while the net profit attributable to shareholders was -50.68 million yuan, a decrease of 439.60% compared to the previous period [2]. - Since its A-share listing, Laiyifen has distributed a total of 314 million yuan in dividends, with 47.79 million yuan distributed over the past three years [3]. Shareholder Information - As of June 30, 2025, Laiyifen had 41,800 shareholders, a decrease of 3.06% from the previous period, with an average of 8,005 circulating shares per person, an increase of 2.51% [2]. - The top ten circulating shareholders include Tianhong Zhongzheng Food and Beverage ETF, which holds 462,600 shares as a new shareholder [3]. Market Activity - Laiyifen's stock has been on the "龙虎榜" (a list of stocks with significant trading activity) 12 times this year, with the most recent appearance on March 3 [1]. - The stock's trading volume on October 29 was 56.89 million yuan, with a turnover rate of 1.34% [1].

Core Viewpoint - The company, Laiyifen, is initiating a financial assistance program for its franchisees amid market challenges and declining performance, while its controlling shareholder is reducing their stake, raising concerns about the company's future prospects [2][4][6]. Financial Assistance Program - Laiyifen announced a financial support plan of up to 50 million yuan for franchisees and joint operators, aimed at alleviating liquidity pressures, especially for new and expanding stores [2][3]. - The financial assistance will be capped at 1 million yuan per store and 500,000 yuan for the same franchisee or joint operator and their affiliates, with interest rates not lower than the one-year market loan rate [3]. - This initiative is seen as a way to lower the entry barriers for franchisees and provide them with startup capital, although it may increase financial pressure on the company if franchisees struggle to repay [3][4]. Performance Challenges - Laiyifen has faced significant financial difficulties, reporting a net loss of 50 million yuan in the first half of 2025, attributed to declining gross margins and a reduction in store numbers [4][5]. - The company has seen a decrease in both direct and franchise stores, with 1,395 direct stores and 1,584 franchise stores as of June 30, 2025, down by 90 and 16 stores respectively from the end of 2024 [5]. Market Competition - The rise of bulk snack retailers and aggressive pricing strategies from competitors like JD, Meituan, and Hema have intensified market pressure on Laiyifen, which is struggling to compete on price [5][6]. - The company is attempting to adapt by developing a multi-format store strategy, including community stores, mall stores, and warehouse membership stores to better meet diverse consumer needs [6]. Shareholder Actions - The controlling shareholder, Shanghai Aiwu Enterprise Management Co., announced a plan to reduce its stake by up to 3% of the total shares, with a total reduction amounting to 82.43 million yuan between September 24 and September 30, 2025 [6]. - This reduction has raised concerns among investors, as it may signal a lack of confidence in the company's future performance during a period of financial loss [6].

Core Insights - The company "Laiyifen," known as the "first snack stock," has experienced its largest decline in performance since its listing, with a 15.25% drop in revenue for 2024, totaling 3.37 billion yuan, and a net loss of 75.26 million yuan, marking a shift from profit to loss [1][4][14] - In the first quarter of 2025, Laiyifen reported a revenue of 1.048 billion yuan, down 1.23% year-on-year, and a net profit of 12.44 million yuan, a significant decline of 79.72% [1][4] - Compared to peers like Wancheng Group and Three Squirrels, Laiyifen's revenue and profit growth rates are significantly lagging, despite maintaining a high gross margin of 40% [1][4][14] Revenue and Profit Decline - Laiyifen's main business revenue fell by 16.52% to 3.21 billion yuan in 2024, with a gross margin of 38.81%, down 1.94 percentage points from the previous year [4][6] - The company has seen a continuous decline in revenue since its listing, with 2023 marking the first revenue drop post-IPO, recording 3.977 billion yuan, a 9.25% decrease [4][14] Regional Performance - In East China, Laiyifen's revenue was 2.93 billion yuan, down 14.96%, with a gross margin of 40.76%, a decrease of 2.03 percentage points [5][6] - North China saw a slight revenue increase of 3.63%, while South China experienced a significant decline of 22.46% [6] Product Performance - All product categories, including nuts, meat products, and candies, reported revenue declines, with the largest drop in meat products and aquatic products [6][7] - The revenue from nuts and beans was 756.86 million yuan, down 8.11%, while meat products generated 985.54 million yuan, down 17.82% [7] Sales Model Analysis - Retail revenue from stores decreased by 21.39% to 2.02 billion yuan, while e-commerce revenue saw the largest decline of 35.54% [8][9] - The company closed 600 stores in 2024, including 425 direct-operated and 175 franchised stores, indicating a strategic shift in its retail approach [10][11] Market Position and Competition - Laiyifen's market position has weakened compared to competitors, with significant revenue growth reported by Wancheng Group (323.29 billion yuan, up 247.86%) and Three Squirrels (106.22 billion yuan, up 49.3%) [13][14] - The company has opted not to engage in price wars, maintaining a high gross margin compared to competitors, which has led to criticism regarding its pricing strategy [16] Employee and Shareholder Dynamics - The company has reduced its workforce by 39.23% since 2021, with 4,590 employees reported in 2024 [17] - Shareholder issues persist, with the controlling shareholder facing penalties for illegal share reductions, raising concerns about governance [18][19]