Core Viewpoint - The company is expected to continue optimizing operational efficiency in the first half of 2025, with promising growth potential for store expansion in the future [1] Financial Performance - In the first half of 2025, the company reported revenue of 3.24 billion yuan, a year-on-year increase of 21.6%, with a gross profit of 717 million yuan, up 17.8%. The gross margin was 22.1%, down 0.7 percentage points year-on-year. Net profit reached 190 million yuan, a significant increase of 122.5%, while core operating profit also stood at 190 million yuan, up 52.3% [1] - The company plans to distribute an interim dividend of 0.0716 yuan per share, totaling 190 million yuan, with a payout ratio of 100% [1] Revenue Breakdown - Revenue from franchise sales was 2.595 billion yuan, up 11% year-on-year, while sales to other channels (mainly B2B) reached 560 million yuan, a substantial increase of 125% [1] - As of the first half of 2025, the company operated 10,400 stores, an 8% increase year-on-year, with a net addition of 250 stores, including 270 new stores in rural areas. Average revenue per franchise store increased by 8% year-on-year [1] Product and Membership Growth - The company launched 175 new SKUs in the hot pot and barbecue categories in the first half of 2025, enhancing its product offerings and introducing various meal sets and fruit beers [1] - The registered membership reached approximately 50.3 million, reflecting a year-on-year growth of 62.8% [1] Cost and Efficiency Improvements - The gross margin was 22.1%, down 0.7 percentage points year-on-year. The selling expense ratio improved to 9.5%, down 1.8 percentage points, mainly due to enhanced advertising efficiency. The management expense ratio also decreased to 6.5%, down 1.9 percentage points, attributed to steady operational efficiency improvements [1] Strategic Expansion Plans - The company aims to enhance market penetration in existing regions and expand its store network into new areas, focusing on county and rural markets, with preliminary plans to explore overseas markets [2] - In terms of supply chain, the company adheres to a "single product, single factory" strategy and plans to establish a food production base in Danzhou, Hainan Province, to improve bargaining power and optimize production costs [2]

Core Viewpoint - The company reported significant growth in its performance for the first half of 2025, with notable increases in revenue, net profit, and core operating profit, driven by expansion in various channels and strategic initiatives [1][2]. Financial Performance - In H1 2025, the company achieved revenue of 3.24 billion yuan, a year-on-year increase of 21.6% [1]. - The net profit attributable to shareholders reached 183 million yuan, reflecting a substantial growth of 113% [1]. - Core operating profit was 190 million yuan, up by 52% compared to the previous year [1]. Revenue Breakdown - Revenue from 2B and other channels grew significantly, reaching 560 million yuan, a 125% increase, accounting for 17.3% of total revenue [1]. - Revenue from sales to franchisees increased by 11%, with the number of franchise stores rising to 10,386, an increase of approximately 8% [1]. - The company added 270 new rural stores, reinforcing its down-market strategy [1]. Operational Efficiency - The company completed the smart and unmanned transformation of over 2,000 retail stores [1]. - In H1 2025, the company launched 175 new SKUs in the hot pot and barbecue categories to attract customers [1]. - Membership numbers exceeded 50 million, with an increase of about 9 million since the beginning of the year, and member prepayments reached 590 million yuan, up 37.2% [1]. Profitability and Dividends - The gross profit margin was 22.1%, a decrease of 0.7 percentage points year-on-year, while sales and management expense ratios improved by 1.82 and 1.85 percentage points, respectively [2]. - Other income and net gains were approximately 60 million yuan, a 93% increase, primarily due to fair value changes of non-listed companies [2]. - The company proposed a mid-term dividend of 0.0716 yuan per share, totaling about 190 million yuan, marking a record high in shareholder returns [2]. Future Outlook - The company forecasts net profits attributable to shareholders for 2025-2027 to be 393 million, 487 million, and 596 million yuan, with year-on-year growth rates of 70.7%, 23.7%, and 22.5%, respectively [2]. - The current stock price corresponds to price-to-earnings ratios of approximately 23, 19, and 15 for the years 2025, 2026, and 2027 [2]. - The company maintains a positive outlook on revenue growth and profitability improvement, sustaining a "buy" rating [2].

Investment Rating - The investment rating for the company is "Cautious Accumulate" [1]. Core Views - The company's operational efficiency continues to improve in H1 2025, with promising growth potential for future store expansions [2]. - The report maintains an "Accumulate" rating and raises the forecast for the company's net profit attributable to shareholders for 2025-2027 to 4.20 billion, 5.05 billion, and 6.17 billion RMB respectively [11]. Financial Summary - Total revenue for 2023 is reported at 6.094 billion RMB, with projections of 6.470 billion for 2024, 7.451 billion for 2025, 8.309 billion for 2026, and 9.471 billion for 2027, reflecting a growth rate of -15%, 6%, 15%, 12%, and 14% respectively [5]. - Gross profit for 2023 is 1.351 billion RMB, with estimates of 1.417 billion for 2024, 1.654 billion for 2025, 1.845 billion for 2026, and 2.103 billion for 2027 [5]. - The net profit attributable to shareholders is projected to be 240 million RMB for 2023, decreasing to 231 million in 2024, then increasing significantly to 420 million in 2025, 505 million in 2026, and 617 million in 2027, with growth rates of 4%, -4%, 82%, 20%, and 22% respectively [5]. - The company plans to distribute an interim dividend of 0.0716 RMB per share, totaling 1.90 billion RMB, with a dividend payout ratio of 100% [11]. Operational Highlights - In H1 2025, the company achieved a revenue of 32.40 billion RMB, a year-on-year increase of 21.6%, with a gross profit of 7.17 billion RMB, up 17.8% [11]. - The number of stores reached 10,400, an 8% increase year-on-year, with a net addition of 250 stores in H1 2025 [11]. - The company introduced 175 new SKUs in the hot pot and barbecue categories, enhancing its product offerings [11]. Market Positioning - The company aims to strengthen its supply chain and expand into lower-tier markets, with plans to explore overseas markets [11]. - The report suggests a target price of 4.24 HKD for 2025, based on a PE ratio of 26x, which is above the industry average [11].

Group 1: Company Performance - In H1 2025, the company achieved a revenue of 3.24 billion yuan, representing a year-on-year increase of 21.6% [4] - The net profit for H1 2025 was 190 million yuan, showing a significant year-on-year growth of 122.5% [4] - The core operating profit (non-IFRS) also reached 190 million yuan, up by 52.3% year-on-year [4] - The gross profit amounted to 717 million yuan, with a gross margin of 22.1%, reflecting a year-on-year increase of 17.8% [4] Group 2: Strategic Initiatives - The company is implementing a community central kitchen strategy, expanding its instant retail store network and enhancing store operational efficiency [4] - In H1 2025, the company launched 175 new SKUs for hot pot and barbecue products, including various meal packages [5] - The membership program has grown significantly, with approximately 50.3 million registered members, a year-on-year increase of 62.8% [5] - The company has innovated its channels, achieving over 3.2 billion platform exposures through a multi-level Douyin account matrix [5] Group 3: Market Expansion - The number of stores increased from 9,660 at the end of H1 2024 to 10,400 at the end of H1 2025, adding 740 stores year-on-year [6] - The company opened 270 new town stores in H1 2025, tailored to meet the needs of consumers in rural markets [6] - The company has established long-term stable partnerships with key suppliers, enhancing production efficiency and product offerings [6] Group 4: Financial Projections - Revenue projections for 2025-2027 are estimated at 7.302 billion, 8.241 billion, and 9.326 billion yuan respectively, with net profits of 400 million, 450 million, and 500 million yuan [8] - The corresponding PE ratios are projected to be 22, 20, and 18 times for the respective years [8]