Group 1: Company Overview - Green Tea Group, founded in Hangzhou, is a leading casual Chinese dining chain focused on fusion cuisine, with 465 restaurants across 141 cities as of the end of 2024, generating revenue of 3.838 billion yuan [1] - The company plans to expand its restaurant network through regional densification, penetration into lower-tier markets, and the establishment of locations in tourist areas [1] Group 2: Market Potential - The casual Chinese dining market in mainland China is experiencing significant growth, with the market size increasing from 39.527 billion yuan in 2020 to 55.718 billion yuan in 2024, reflecting a CAGR of 8.96% [2] - The market for casual Chinese dining specifically is projected to grow from 351.3 billion yuan in 2020 to 534.7 billion yuan in 2024, with a CAGR of 11.1% [2] Group 3: Competitive Advantages - Green Tea stands out due to its unique fusion cuisine, competitive pricing, and distinctive restaurant decor, with an average per capita consumption of 50-70 yuan, which is lower than competitors [3] - The company has a balanced revenue distribution across various regions, with 33% from East China, 18% from Guangdong, 12% from North China, and 37% from other areas [3] Group 4: Growth Strategy - The company plans to open 150, 200, and 213 new restaurants in 2025, 2026, and 2027 respectively, with a focus on East China, Guangdong, North China, and overseas markets [4] - Green Tea aims to enhance its product development capabilities, with plans to launch 172, 168, and 203 new products from 2022 to 2024, and to increase its takeaway revenue at a CAGR of 35% [4]

Group 1 - The core viewpoint of Dongwu Securities is that the current valuation of Green Tea Group (06831) remains cost-effective, with significant room for store penetration and new store formats expected, leading to a "Buy" rating [1] - The company is projected to achieve revenues of 48.01 billion, 59.67 billion, and 72.53 billion yuan for the years 2025-2027, with year-on-year growth rates of 25.09%, 24.28%, and 21.54% respectively [1] - The net profit attributable to the parent company is expected to be 5.03 billion, 6.32 billion, and 8.11 billion yuan for the same period, with growth rates of 43.70%, 25.64%, and 28.34% respectively [1] Group 2 - The casual Chinese dining market in mainland China is experiencing steady growth, with the market size increasing from 39,527 billion yuan in 2020 to 55,718 billion yuan in 2024, reflecting a CAGR of 8.96% [2] - The market for casual Chinese dining is expected to grow from 3,513 billion yuan to 5,347 billion yuan from 2020 to 2024, with a CAGR of 11.1%, indicating a faster growth rate compared to the overall dining market [2] Group 3 - Green Tea Group stands out due to its unique fusion cuisine, cost-effective dishes, and distinctive restaurant decor, which incorporates elements of traditional Chinese culture and natural landscapes [3] - The average consumer spending at Green Tea is between 50-70 yuan, which is more competitive compared to other brands like Xibei and Taier, where the spending ranges from 60-90 yuan [3] Group 4 - The company plans to accelerate store openings, targeting 150, 200, and 213 new stores in 2025-2027, with specific plans for various regions and cities [4] - The company aims to enhance its product development capabilities, with a significant increase in the number of new products launched from 172 in 2022 to 203 in 2024, and a projected CAGR of 35% for takeaway revenue [4]

Core Viewpoint - Green Tea Group, a leading casual Chinese dining chain based in Hangzhou, is expanding its restaurant network across China, with plans to increase its number of locations from 465 in 2024 to 502 by mid-2025, while achieving a revenue of 3.838 billion yuan in 2024 [1][2]. Industry Overview - The casual Chinese dining market in mainland China is experiencing significant growth, with the market size increasing from 3.9527 trillion yuan in 2020 to 5.5718 trillion yuan in 2024, representing a CAGR of 8.96% [1]. - The retail sales of Chinese restaurants are projected to account for 55.13% of the total dining market in 2024, highlighting the dominance of this segment [1]. Company Strategy - Green Tea Group plans to enhance its restaurant network through geographic expansion, targeting lower-tier markets, and establishing locations in tourist areas [2]. - The company aims to open 150, 200, and 213 new restaurants in 2025, 2026, and 2027 respectively, with a focus on various regions and cities [2]. Competitive Advantages - The brand stands out due to its unique fusion cuisine, which combines diverse regional ingredients and cooking techniques, appealing to a broad audience [2]. - Green Tea's average consumer spending is between 50-70 yuan, which is more competitive compared to other brands like Xibei and Taier, enhancing its value proposition [2]. Financial Projections - Revenue forecasts for Green Tea Group are 4.801 billion yuan in 2025, 5.967 billion yuan in 2026, and 7.253 billion yuan in 2027, with year-on-year growth rates of 25.09%, 24.28%, and 21.54% respectively [3]. - The projected net profit for the same years is 503 million yuan, 632 million yuan, and 811 million yuan, with growth rates of 43.70%, 25.64%, and 28.34% respectively [3].

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1]. Core Views - The company is positioned as a leading player in the casual Chinese dining sector, focusing on fusion cuisine, with significant potential for store expansion and operational efficiency improvements [8]. - The casual Chinese dining market is experiencing robust growth, with the company poised to capitalize on this trend through strategic expansion and enhanced service offerings [8]. - The company's revenue and profit forecasts indicate strong growth, with a projected revenue of 48.01 billion yuan in 2025, reflecting a year-on-year growth of 25.09% [8]. Summary by Sections 1. Company Overview - Green Tea Group is a leading casual Chinese dining chain specializing in fusion cuisine, with 465 restaurants across 141 cities as of the end of 2024, generating revenue of 38.38 billion yuan [13]. - The company ranks third in terms of restaurant count and fourth in revenue among casual Chinese dining brands in mainland China [13]. 2. Market Growth - The casual dining market in mainland China is substantial, growing from 39,527 billion yuan in 2020 to 55,718 billion yuan in 2024, with a CAGR of 8.96% [32]. - The market for casual Chinese dining is expected to grow from 3,513 billion yuan in 2020 to 5,347 billion yuan in 2024, with a CAGR of 11.1% [37]. 3. Expansion Strategy - The company plans to open 563 new restaurants from 2025 to 2027, focusing on regional densification and market penetration in lower-tier cities [59]. - The expansion includes 17 new restaurants in tourist areas to enhance brand visibility [60]. 4. Financial Projections - Revenue projections for 2025-2027 are 48.01 billion yuan, 59.67 billion yuan, and 72.53 billion yuan, with corresponding profit forecasts of 5.03 billion yuan, 6.32 billion yuan, and 8.11 billion yuan [8]. - The company is expected to maintain a competitive P/E ratio of 7.67x and 6.11x for 2025 and 2026, respectively, indicating attractive valuation [8]. 5. Competitive Advantages - The company benefits from a unique fusion cuisine offering, competitive pricing, and a distinctive dining environment, which enhances customer appeal [44]. - The average per capita spending at Green Tea is 50-70 yuan, which is lower than competitors, providing a significant value proposition [50].

Group 1 - Green Tea Group Limited (stock code 6831.HK) is set to conduct an IPO from May 8 to May 13, 2025, with a global issuance of approximately 170 million shares at an offer price of HKD 7.19 per share, aiming for a maximum net fundraising of about HKD 1.21 billion [1] - The company, founded in 2008, has grown from a single restaurant to a significant national restaurant network, ranking third among Chinese casual dining brands by the number of restaurants, increasing from 236 in 2021 to 360 in 2023, representing a compound annual growth rate (CAGR) of 23.5% [3] - Green Tea Group is the largest restaurant brand in terms of revenue among casual dining brands offering fusion cuisine, holding a market share of 0.7%, with revenues of RMB 2.375 billion, RMB 3.589 billion, and RMB 3.838 billion for the years 2022 to 2024, respectively, and net profits of RMB 0.017 billion, RMB 0.296 billion, and RMB 0.350 billion for the same period [3] Group 2 - The net proceeds from the IPO are intended for the continued expansion of the restaurant network, upgrading information technology systems and related infrastructure, as well as for daily operational needs [3]