Core Viewpoint - The company reported a solid performance in H1 2025, with revenue and net profit showing positive growth, driven by strong takeout business and effective cost management [1][2]. Financial Performance - In H1 2025, the company achieved revenue of 2.714 billion RMB, a year-on-year increase of 6.5%, and a net profit of 382 million RMB, up 35.66% year-on-year [1]. - The net profit margin reached 14.1%, an increase of 3.03 percentage points compared to the previous year [2]. Business Analysis - The takeout business generated revenue of 1.057 billion RMB, growing by 13.7% year-on-year, accounting for 39% of total revenue, while dine-in revenue was 1.647 billion RMB, up 2.2% year-on-year, making up 60.7% of total revenue [1]. - The number of takeout orders increased significantly from 12.8 million to 16.8 million, attributed to the expansion of stores offering takeout services and enhanced appeal of the online takeout platform [1]. - The company opened 55 new stores, increasing the total from 617 to 672, with notable growth in second-tier cities [2]. Cost Management - The gross margin improved to 70.5%, a year-on-year increase of 2.61 percentage points, primarily due to centralized procurement reducing ingredient costs [2]. - Employee costs decreased by 8.2% to 666 million RMB, optimizing the employee cost ratio to 24.6%, down 3.95 percentage points year-on-year [2]. Shareholder Returns - The company distributed dividends of 250 million RMB in H1 2025, maintaining a high payout ratio of 65.4%, with approximately 0.2119 RMB per share [3]. Future Outlook - Revenue projections for 2025, 2026, and 2027 are estimated at 6.1 billion RMB, 7.7 billion RMB, and 9.5 billion RMB respectively, with net profits expected to be 780 million RMB, 950 million RMB, and 1.17 billion RMB [3].

Investment Rating - The report maintains a "Buy" rating for the company, expecting a price increase of over 15% in the next 6-12 months [5]. Core Insights - The company reported a revenue of 2.714 billion RMB for H1 2025, representing a year-on-year growth of 6.5%, while the net profit attributable to shareholders reached 382 million RMB, up 35.66% year-on-year [2]. - The dining-in business remains stable, while the takeout business shows strong growth, with takeout revenue of 1.057 billion RMB in H1 2025, a 13.7% increase year-on-year, accounting for 39% of total revenue [3]. - The company expanded its store network, increasing the number of stores from 617 to 672, with significant growth in second-tier cities [3]. - The net profit margin improved to 14.1%, up 3.03 percentage points year-on-year, driven by gross margin optimization and reduced employee costs [4]. - The company plans to pay dividends of 250 million RMB in H1 2025, maintaining a high dividend payout ratio of 65.4% [4]. Financial Performance Summary - Revenue projections for 2025, 2026, and 2027 are 6.095 billion RMB, 7.724 billion RMB, and 9.461 billion RMB, respectively, with net profits expected to be 784 million RMB, 947 million RMB, and 1.174 billion RMB [5]. - The company’s PE ratios for 2025, 2026, and 2027 are projected to be 14.99, 12.42, and 10.01, respectively [5]. - The gross margin for H1 2025 was reported at 70.5%, an increase of 2.61 percentage points year-on-year, attributed to centralized purchasing [4].

Group 1 - The phenomenon of customers ordering takeout and consuming it in-store has become increasingly common, leading to a disparity in pricing between takeout and dine-in options [5][10][14] - Customers have discovered that takeout prices can be significantly lower than dine-in prices, sometimes by as much as 50%, due to aggressive discounting strategies by delivery platforms [6][8][10] - This trend has created tension between customers and restaurant owners, as many businesses are struggling to maintain profitability amidst rising operational costs and the pressure of delivery platform subsidies [11][14][18] Group 2 - Some restaurant owners have expressed frustration over customers taking advantage of lower takeout prices while dining in their establishments, leading to potential loss of revenue and increased operational costs [10][11][14] - The financial burden on restaurants is highlighted by a case where a restaurant's takeout revenue was significantly impacted by high subsidy costs, leading to a situation where the business could face closure [14] - There are mixed responses from restaurant owners regarding the acceptance of takeout consumption in-store, with some welcoming it while others have implemented restrictions to protect their margins [15][17]

Core Insights - The "takeout war" has led to a significant increase in takeout orders but has caused a notable decline in dine-in traffic, lowering the price anchor in the restaurant industry and reinforcing consumers' mindset towards low-cost consumption [1][5]. Consumer Behavior Changes - 75% of consumers have opted for takeout over dine-in due to lower prices [3]. - Since July, 80% of respondents have changed their dining habits, with 44% increasing takeout frequency and decreasing dine-in frequency [3]. - 86% of respondents are more likely to choose takeout if they find it cheaper than dine-in options [3]. Price Perception and Market Dynamics - Half of the respondents believe that subsidized takeout prices are closer to normal prices, indicating that businesses can still profit at current price levels [3]. - Over 60% of respondents expect takeout prices to remain at current levels even after subsidies end, suggesting a long-term shift in price perception [3][5]. - 86% of respondents would reduce their takeout frequency if prices rise in the future, indicating a risk of order volume decline as subsidies decrease [5]. Consumer Experience and Market Impact - Over 70% of respondents reported a decline in takeout experience, citing longer delivery times, food safety issues, reduced portion sizes, lower food quality, and poor service as primary concerns [5]. - Experts warn that the intense competition among takeout platforms has distorted prices and disrupted market order, leading to a potential "quantity and price damage" cycle in the restaurant industry [6]. Industry Expert Opinions - Economists highlight that the ongoing subsidy wars have led to severe price distortions and a failure of market regulation mechanisms, negatively impacting consumers, merchants, and the overall market order [6]. - The consensus among experts is that the subsidy wars do not yield winners and pose a significant threat to the restaurant industry, necessitating a rational response from the sector [6].