Group 1 - The founder and chairman of Xiaocaiyuan, Wang Shugang, stated that the competition among three delivery platforms in July has impacted the restaurant's operations, leading to a surge in delivery orders that affected dine-in service quality [2] - Starting from August, Xiaocaiyuan will not participate in any discounts from the three delivery platforms (Meituan, Taobao Shanguo, JD) to prioritize improving the dine-in experience [2] - Wang believes that the subsidy model is not sustainable and emphasizes that the key to success is to provide good food, with an ideal ratio of delivery to dine-in being 30% to 70%, and delivery should not exceed 35% [2]

Core Viewpoint - The company demonstrated strong revenue growth in H1 2025, driven by its takeaway business, while facing challenges in dine-in performance [1][2]. Financial Performance - In H1 2025, the company achieved revenue of 2.714 billion yuan, a 6.5% increase year-on-year, and a net profit attributable to shareholders of 382 million yuan, reflecting a 35.7% increase [1]. - Adjusted net profit for the same period was 382 million yuan, marking a 44.6% increase [1]. - The gross profit margin improved to 70.5%, up 2.6% year-on-year, attributed to enhanced supplier negotiation capabilities from unified procurement [2]. Business Segmentation - Dine-in revenue was 1.647 billion yuan, a 2.2% increase, while takeaway revenue reached 1.057 billion yuan, a 13.7% increase, with takeaway accounting for 39.0% of total revenue [1]. - Same-store sales faced a decline of 7.2%, primarily due to a 5.5% drop in average spending per customer [2]. Operational Efficiency - Employee costs decreased by 4.0 percentage points to 24.6% of revenue, thanks to the implementation of cooking robots and optimization of staff numbers [2]. - The company maintained a net profit margin of 14.1%, an increase of 3.0 percentage points year-on-year, driven by operational efficiency improvements [2]. Expansion Plans - As of June 30, 2025, the company operated 672 stores, with a net increase of 55 stores year-on-year, focusing on improving existing store operations [3]. - The company plans to accelerate store openings in the second half of 2025, with expectations of adding 130 new stores by year-end [3]. Supply Chain and Dividends - The company is progressing steadily in supply chain development, with a new central kitchen expected to be completed within the year [3]. - In H1 2025, the company declared a dividend of 0.2112 yuan per share, with a payout ratio of 65%, indicating a projected dividend yield of 4.2% based on the latest closing price [3]. Investment Outlook - The company maintains profit forecasts of 770 million yuan, 940 million yuan, and 1.12 billion yuan for 2025, 2026, and 2027, respectively, reflecting year-on-year growth rates of 32%, 22%, and 19% [4]. - The company is expected to enhance its valuation through improved same-store sales growth and successful store expansion [4].

Core Insights - The company reported a revenue of RMB 2.714 billion for the period ending June 30, 2025, representing a year-on-year growth of 6.5% [1] - Shareholder profit attributable to the company was RMB 382 million, showing a significant increase of 35.7% compared to the previous year [1] - Basic earnings per share were RMB 0.33, with a proposed interim dividend of RMB 0.2119 per share [1] Business Performance - The number of operating stores reached 672, an increase from 617 stores in the same period last year, indicating steady growth [1] - Dine-in revenue grew by 2.2% to RMB 1.647 billion, while takeaway revenue saw a more substantial increase of 13.7% to RMB 1.057 billion [1] - The number of takeaway orders rose from 12.8 million to 16.8 million year-on-year, reflecting a strong demand in the takeaway segment [1]

Core Viewpoint - The restaurant industry continues to face challenges such as intensified competition and declining profits, making it difficult for companies to grow. However, "Little Garden" has reported impressive mid-term financial results, standing out in a tough market environment [1]. Financial Performance - In the first half of the year, "Little Garden" achieved revenue of 2.714 billion yuan, a year-on-year increase of 6.5%. The profit attributable to shareholders was 382 million yuan, up 35.7% year-on-year. The operating cash flow reached 765 million yuan, significantly higher than 455 million yuan in the same period last year, indicating improved operational quality [1]. - The company had 672 operating "Little Garden" brand stores by the end of the first half, an increase from 617 stores in the same period last year [1]. Business Segments - All business segments of "Little Garden" showed growth, with dine-in revenue increasing by 2.2% to 1.647 billion yuan and takeout revenue growing by 13.7% to 1.057 billion yuan. The number of takeout orders rose from 12.8 million to 16.8 million [2]. - The company maintained growth in both high-tier cities and lower-tier cities, reflecting a balanced channel layout and growth potential in various markets [2]. Cost Management and Efficiency - "Little Garden" improved its profitability while increasing the proportion of takeout revenue, demonstrating effective cost management and efficiency improvements. The inventory decreased from 110 million yuan to 74 million yuan, and inventory turnover days reduced from 23.6 days to 20.7 days [3][4]. - The company has successfully catered to consumer demand for quality and affordability, leveraging healthy ingredients and freshly prepared meals to enhance customer experience [4]. Growth Strategy - The growth strategy of "Little Garden" focuses on simultaneous expansion and quality improvement, achieving a balance among scale, efficiency, and profit, which positions the company well for future growth and sustainability [4].