Group 1 - The tourism market in Hohhot is experiencing significant growth due to its unique natural scenery and rich cultural heritage, attracting a large number of visitors during the peak season [1][5] - Various tourism resources, such as the Chulu Ranch, are drawing crowds, with local businesses benefiting from increased foot traffic and sales [2][3] - Local food and cultural events, including concerts and food festivals, are enhancing visitor experiences and driving up food-related sales in the area [4][5] Group 2 - Local businesses, including photography studios and ethnic clothing rentals, are capitalizing on the influx of tourists, with some reporting daily customer volumes of around 10 groups for photo shoots [2][3] - The demand for local specialties, such as beef jerky and ethnic handicrafts, is high, with some stores experiencing long queues and frequent restocking [2][3] - The overall increase in tourist numbers and total tourism revenue indicates a robust recovery and growth in the tourism sector in Hohhot [5]

Core Viewpoint - The company is experiencing pressure on its operations due to a challenging external consumption environment, leading to a downward revision of profit forecasts for 2025-2026, while maintaining a "buy" rating based on expected recovery in the future [4] Revenue and Profitability - In 2024, the company's revenue and net profit attributable to shareholders were 1.87 billion and 80 million respectively, showing a year-on-year decline of 1.7% and 37.7% [1] - For Q4 2024, revenue and net profit attributable to shareholders were 500 million and 2 million respectively, with year-on-year declines of 11.9% and 94.7% [1] - In Q1 2025, revenue and net profit attributable to shareholders were 470 million and 20 million respectively, reflecting a year-on-year increase of 1.5% but a decline of 38.0% in net profit [1] Channel Performance - In 2024, revenue from distribution and direct sales channels decreased by 6.0% and increased by 4.3% respectively, influenced by economic conditions and competition in the restaurant market [1][2] - The company’s revenue from major product categories in 2024 included staple foods (910 million, -6.9%), snacks (440 million, -13.8%), baked goods (370 million, 0.0%), and frozen prepared dishes (140 million, +273.4%) [2] - The company maintained market leadership in fried products, while the pre-prepared dishes category showed significant growth [2] Profit Margin and Costs - The company's net profit margin decreased by 2.6 percentage points in 2024 and by 2.9 percentage points in Q1 2025, with a gross margin of 23.7% in 2024, remaining relatively stable [3] - Sales expense ratio increased by 0.7 percentage points to 5.4% in 2024, reflecting increased marketing efforts to cope with market competition [3] - Management expense ratio rose by 1.2 percentage points to 9.7% in 2024, indicating higher operational costs [3] Future Outlook - The company anticipates improvement in operations with a potential recovery in restaurant demand, maintaining a "buy" rating despite the current challenges [4] - The earnings per share (EPS) forecasts for 2025 and 2026 have been revised down to 0.91 and 1.05 respectively, with an introduction of a 2027 EPS forecast of 1.14 [4] - The target price is set at 29.40, based on a 28x price-to-earnings ratio for 2026, reflecting a decrease from the previous target of 35.11 [4]