Core Viewpoint - The company, Lao Xiang Ji, is the largest Chinese fast-food brand with a complete industry chain layout and has recently submitted a listing application to the Hong Kong Stock Exchange after previous attempts to list in A-shares [1][10]. Company Overview - Lao Xiang Ji operates 1,564 stores across 58 cities in China, with a mix of 911 direct-operated stores and 653 franchise stores [2][3]. - The company has shifted its focus from direct-operated stores to franchise stores, resulting in a decrease in direct-operated stores from 1,007 to 911 between 2022 and April 2025, while franchise stores increased significantly from 118 to 653 [2][3]. Financial Performance - The company has shown stable revenue growth with a compound annual growth rate (CAGR) of 17.9% from 2022 to 2024, and a continued growth of 10% in the first four months of 2025 [3][10]. - Revenue from direct-operated stores accounted for 77.7% of total revenue, but has seen a slight decline, while franchise stores have experienced a remarkable CAGR of 103% over the past three years, increasing their revenue share from 4.8% to 22.3% [3][4]. Growth Strategy - Franchise stores have become the core growth driver, particularly in Jiangsu, Zhejiang, and Shanghai, which collectively accounted for 96.7% of franchise revenue in the first four months of this year [4][9]. - The company is also expanding its online sales, with takeaway services making up over 40% of revenue for both direct-operated and franchise stores [4]. Supply Chain and Cost Management - Lao Xiang Ji is the only major Chinese fast-food brand with an integrated supply chain, owning its chicken farms, which enhances cost control and maintains stable profitability [4][5]. - The company's gross margin has shown a steady increase from 20.3% in 2022 to 24.2% in the first four months of 2025, with direct-operated stores contributing over 80% of gross profit [4][5]. Industry Outlook - The Chinese fast-food industry, particularly the Chinese fast-food segment, is projected to grow from a market size of 809.7 billion yuan in 2024 to approximately 1.21 trillion yuan by 2029, with a CAGR of 8.3% [6][9]. - The market is currently fragmented, with the top five players holding only 3.6% market share, indicating significant growth potential for leading brands like Lao Xiang Ji [6][9]. Financial Health - The company has a strong cash flow, with net operating cash flows of 865 million yuan, 1.15 billion yuan, and 1.285 billion yuan from 2022 to 2024, supporting its expansion plans [9]. - As of April 2025, the company has a debt-to-asset ratio of 56.5% and a low interest-bearing debt ratio of 6.31%, indicating a solid financial position [9].