The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Application Proof, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Application Proof. Application Proof of FUJIAN WANCHEN FOOD GROUP CO., LTD. 福建萬辰食品集團股份有限公司 (the "Company") (A joint stock company incorporated in the Peopl ...

香港聯合交易所有限公司與證券及期貨事務監察委員會對本申請版本的內容概不負責，對其準確性或完整 性亦不發表任何意見，並明確表示概不就因本申請版本全部或任何部分內容而產生或因倚賴該等內容而引 致的任何損失承擔任何責任。 FUJIAN WANCHEN FOOD GROUP CO., LTD. 福建萬辰食品集團股份有限公司 （「本公司」） （於中華人民共和國註冊成立的股份有限公司） 的申請版本 警告 本申請版本乃根據香港聯合交易所有限公司（「聯交所」）與證券及期貨事務監察委員會（「證監會」）的要求 而刊發，僅用作提供資訊予香港公眾人士。 本申請版本為草擬本，其內所載資料並不完整，亦可能會作出重大變動。 閣下閱覽本文件，即代表 閣 下知悉、接納並向本公司、其保薦人、整體協調人、顧問或包銷團成員表示同意： 本公司招股章程根據香港法例第32章公司（清盤及雜項條文）條例與香港公司註冊處處長登記前，本公司 不會向香港公眾人士提出要約或邀請。倘於適當時候向香港公眾人士提出要約或邀請，有意投資者務請僅 依據呈交香港公司註冊處註冊的本公司招股章程作出投資決定；有關文本將於發售期內向公眾刊發。 (a) 本文件僅為向香港公眾人士提供有關 ...

Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The company is experiencing continuous expansion in its snack retail stores, leading to a steady improvement in profitability [5][7] - The company has a strong growth forecast, with significant revenue and profit increases projected for the coming years [6][7] Financial Performance Summary - In 2025, the company achieved a revenue of 51,459 million RMB, representing a year-on-year growth of 59.17% [7] - The net profit attributable to the parent company for 2025 was 1,345 million RMB, with a remarkable year-on-year increase of 358.09% [7] - The company’s revenue is expected to reach 63,242 million RMB in 2026, with a growth rate of 22.90% [6] - The projected net profit for 2026 is 2,017 million RMB, indicating a growth rate of 49.99% [6] Business Expansion and Strategy - As of the end of 2025, the company operated 18,314 snack retail stores across 30 provinces, indicating a robust expansion strategy [7] - The company is focusing on enhancing supply chain resilience, building a smart logistics system, and improving brand recognition, which are expected to drive operational efficiency and sustainable profitability [7] Industry Outlook - The edible fungus industry is showing signs of recovery, with a revenue of 60.2 million RMB in 2025, marking an 11.81% year-on-year growth [7] - The company is well-positioned to leverage its supply chain advantages and improve profitability as it continues to expand its snack retail operations [7]

Investment Rating - The investment rating for the company is "Accumulate" [1] Core Insights - The company achieved a revenue of 51.459 billion yuan in 2025, representing a year-on-year increase of 59.17%, and a net profit of 1.345 billion yuan, up 358.09% year-on-year [2] - The total number of stores exceeded 18,000, with a net increase of 4,118 stores compared to the end of 2024, indicating significant expansion and operational efficiency [2] - The average revenue per store in 2025 was 3.13 million yuan, showing a decline of 6.9% year-on-year, but the profitability is gradually recovering [2] - The company plans to distribute a cash dividend of 8.50 yuan per 10 shares to all shareholders [2] Summary by Sections Financial Performance - The company’s gross profit margin improved to 12.4% in 2025, with a net profit margin of 4.98%, an increase of 2.28 percentage points year-on-year [4] - The net profit for the company's volume business reached 2.533 billion yuan in 2025, a year-on-year increase of 195% [4] - The company forecasts revenue for 2026 to be 64.481 billion yuan, with an EPS of 10.89 yuan, reflecting a strong growth trajectory [7] Business Expansion - The company’s store count reached 18,314, covering all 30 provinces, autonomous regions, and municipalities in China, with a focus on expanding in key regions [2] - The company is enhancing its competitive advantage by deepening its volume business and expanding its product matrix to include non-snack essentials [5] - The company is also pursuing an H-share listing to enhance its international strategy and plans a mid-term dividend payout of up to 50% [6] Market Position - The company has become the first snack chain brand in the industry to exceed 10,000 stores, leading in GMV [4] - The company is leveraging its supply chain efficiency and digital systems to improve profitability and reduce costs [4] - The registered member count is nearing 190 million, with over 140 million active transaction members, indicating strong customer loyalty [2]

Core Viewpoint - Wanchen Group reported a significant increase in revenue and net profit for 2025, indicating strong business performance and growth potential [4]. Group 1: Financial Performance - In 2025, the company achieved a revenue of 51.459 billion yuan, a year-on-year increase of 59.17%, and a net profit attributable to shareholders of 1.345 billion yuan, up 358.09% [4]. - For Q4 2025, the revenue was 14.897 billion yuan, reflecting a year-on-year growth of 27.15%, while the net profit reached 490 million yuan, an increase of 133.76% [4]. Group 2: Business Expansion - The company’s snack retail business generated revenues of 50.857 billion yuan for the full year and 14.699 billion yuan for Q4, with year-on-year growth rates of 59.98% and 27.12%, respectively [5]. - As of the end of 2025, the total number of stores reached 18,314, with a net increase of 4,118 stores during the year [5]. Group 3: Profitability and Margins - The gross margin for 2025 was 12.40%, with Q4 gross margin at 14.15%, showing an increase of 2.80 percentage points year-on-year for Q4 [6]. - The net profit margin for the full year was 2.61%, while for Q4 it was 3.29%, reflecting improvements in profitability [6].

Investment Rating - The report maintains a "Buy" rating for the company [5][7]. Core Insights - The company achieved a revenue of 51.459 billion yuan in 2025, representing a year-on-year growth of 59.17%. The net profit attributable to shareholders reached 1.345 billion yuan, up 358.09% year-on-year [2]. - The company has shown a steady pace in store expansion, with a total of 18,314 stores by the end of 2025, netting an increase of 4,118 stores during the year [3]. - The gross margin improved to 12.40% for the full year of 2025, with a significant increase in profitability driven by enhanced bargaining power on the procurement side [4]. Revenue and Profitability Summary - The company’s revenue for 2025 was 51.459 billion yuan, with a growth rate of 59.17%. The net profit attributable to shareholders was 1.345 billion yuan, reflecting a growth rate of 358.09% [6]. - The average revenue per store decreased by 7% year-on-year to 3.13 million yuan, but the decline in the second half of 2025 was less severe compared to the first half [3]. - The company’s gross margin for Q4 2025 was 14.15%, showing a year-on-year increase of 2.80 percentage points [4]. Future Earnings Forecast - The net profit forecasts for 2026 and 2027 have been raised to 2.177 billion yuan and 2.623 billion yuan, respectively, with an additional forecast for 2028 set at 3.317 billion yuan [5]. - The expected earnings per share (EPS) for 2026, 2027, and 2028 are projected to be 11.38 yuan, 13.71 yuan, and 17.34 yuan, respectively [6]. Valuation Metrics - The current price-to-earnings (P/E) ratios for 2026, 2027, and 2028 are 17, 14, and 11 times, respectively [5][6].

Investment Rating - The investment rating for the company is "Outperform the Market" [5][11][14] Core Views - The company is expected to accelerate store openings in the second half of 2025, significantly releasing scale benefits in its bulk snack business, with a projected revenue of 51.46 billion yuan for 2025, representing a year-on-year increase of 59.2% [1][8] - The net profit for 2025 is forecasted to be 1.34 billion yuan, a substantial increase of 358.1% year-on-year, with a non-recurring net profit of 1.28 billion yuan, up 395.0% [1][8] - The company added 4,118 new stores in 2025, with 2,949 of those in the second half, maintaining a healthy closure rate of 3.7% [1][8] - The average revenue per store decreased by 6.9% year-on-year to 3.13 million yuan, but the decline in the second half was significantly narrowed [1][8] - The profitability of the bulk snack business improved markedly, with a net profit of 2.53 billion yuan, achieving a gross margin of 12.3% and a net margin of 5.0%, both showing year-on-year increases [1][8] Financial Performance Summary - The sales expense ratio and management expense ratio decreased by 1.4 and 0.1 percentage points respectively, indicating the release of scale effects [2][9] - The net profit margin for 2025 is 4.7%, up 2.8 percentage points year-on-year, while the net profit margin attributable to the parent company is 2.6%, an increase of 1.7 percentage points [2][9] - The total asset turnover ratio improved to 5.95 times, and the inventory turnover ratio remained stable at 20.04 times, reflecting high operational efficiency [10] - The company completed a significant asset purchase, increasing its stake in Nanjing Wanyou from 26.01% to 75.01%, positively impacting net profit [9][10] Earnings Forecast and Investment Recommendations - The company is expected to continue expanding its store network with minimal resistance, and the bulk snack business is projected to grow significantly, enhancing scale benefits [11] - The revenue forecasts for 2026-2028 have been raised, with expected revenues of 64.96 billion, 77.21 billion, and 86.68 billion yuan respectively, and net profits of 2.36 billion, 3.19 billion, and 3.80 billion yuan [11][13] - The current price-to-earnings ratios for 2026-2028 are projected to be 15, 11, and 10 times, maintaining the "Outperform the Market" rating [11][14]

Investment Rating - The investment rating for the company is "Outperform the Market" [5][11]. Core Views - The company is expected to accelerate store openings in the second half of 2025, significantly releasing scale benefits in its bulk snack business, with a projected total revenue of 51.46 billion yuan for 2025, representing a year-on-year increase of 59.2% [1][8]. - The net profit attributable to shareholders is forecasted to reach 1.34 billion yuan in 2025, a substantial increase of 358.1% year-on-year, with a non-recurring net profit of 1.28 billion yuan, up 395.0% [1][8]. - The company added 4,118 new stores in 2025, with 2,949 of these openings occurring in the second half of the year, while maintaining a healthy closure rate of 3.7% [1][8]. - The average revenue per store decreased by 6.9% year-on-year to 3.13 million yuan, but the decline in the second half of the year showed significant narrowing [1][8]. - The profitability of the bulk snack business improved markedly, with a net profit (after adding back share-based payment expenses) of 2.53 billion yuan, achieving the upper limit of the performance forecast range [1][8]. Financial Performance Summary - In 2025, the sales expense ratio and management expense ratio decreased by 1.4 and 0.1 percentage points year-on-year, respectively, indicating the release of scale effects [2][9]. - The net profit margin for 2025 is projected at 4.7%, an increase of 2.8 percentage points year-on-year, while the net profit margin attributable to shareholders is expected to be 2.6%, up 1.7 percentage points [2][9]. - The total asset turnover ratio improved to 5.95 times, and the inventory turnover ratio remained stable at 20.04 times, reflecting high operational efficiency during business expansion [10][11]. - The company completed a significant asset acquisition, increasing its stake in Nanjing Wanyou from 26.01% to 75.01%, which is expected to positively impact net profit attributable to shareholders [9][11]. Earnings Forecast and Investment Recommendations - The company is expected to continue expanding its bulk snack business with minimal resistance, and the strong scale benefits from this expansion are anticipated to persist [11]. - The revenue forecasts for 2026-2028 have been raised, with projected revenues of 64.96 billion yuan, 77.21 billion yuan, and 86.68 billion yuan, respectively, reflecting growth rates of 26.2%, 18.9%, and 12.3% [11][13]. - The net profit attributable to shareholders is expected to reach 2.36 billion yuan, 3.19 billion yuan, and 3.80 billion yuan for 2026-2028, with year-on-year growth rates of 75.2%, 35.5%, and 19.1% [11][13]. - The current stock price corresponds to price-to-earnings ratios of 15, 11, and 10 times for 2026, 2027, and 2028, respectively, maintaining the "Outperform the Market" rating [11][14].

Investment Rating - The report upgrades the investment rating of the company to "Buy" based on its strong performance and growth potential in the snack retail sector [7][19]. Core Insights - The company achieved a revenue of RMB 51.46 billion in 2025, representing a year-on-year growth of 59%, and a net profit of RMB 1.34 billion, up 358% year-on-year [7][8]. - The company is in a phase of "store expansion + single-store recovery + profit margin improvement," benefiting from the ongoing growth in the snack retail industry [7][19]. - The report forecasts revenues for 2026-2028 to be RMB 65.88 billion, RMB 78.02 billion, and RMB 87.50 billion, respectively, with net profits projected at RMB 2.37 billion, RMB 3.02 billion, and RMB 3.53 billion [3][8]. Revenue Performance - In 2025, the company’s snack retail business generated RMB 50.86 billion, accounting for 99% of total revenue, with a year-on-year growth of 60% [7][8]. - The company opened 4,118 new stores in 2025, bringing the total to 18,314 stores, with a focus on the East China region [7][8]. - Average revenue per store in 2025 was approximately RMB 3.13 million, showing a decline of 6.9% year-on-year, but with signs of recovery in the latter quarters [8][11]. Profitability Analysis - The company’s gross margin improved significantly, with Q4 net profit margin reaching 5.7%, up from 3.9% in Q1 [7][8]. - The report attributes the profit margin improvement to supply chain optimization, cost control, and enhanced operational efficiency [7][8]. - The projected net profit margins for 2026-2028 are expected to be 5.5%, 5.9%, and 6.2%, respectively [11][19]. Valuation Metrics - The report suggests a price-to-earnings (P/E) ratio of 20x for 2026, leading to a target price of RMB 247.38 per share [7][19]. - The company’s return on equity (ROE) is projected to be 90.7% in 2025, declining to 45.7% by 2028 [3][19]. - The estimated enterprise value to EBITDA (EV/EBITDA) ratio is expected to decrease from 9.6 in 2024 to 3.2 by 2028 [3][19].

Investment Rating - The investment rating for Wanchen Group is "Buy" (maintained) [1] Core Views - The company's performance in 2025 exceeded expectations, with total revenue reaching 51.46 billion yuan, a year-on-year increase of 59.17%, and net profit attributable to shareholders at 1.34 billion yuan, up 358.09% [7] - The snack retail business continued to expand, achieving revenue of 50.86 billion yuan, a 60% increase year-on-year, with a total of 18,314 stores by year-end, adding 4,118 stores throughout the year [7] - Profitability indicators are continuously improving, with a net profit margin of 5.0% in 2025, up 2.3 percentage points year-on-year, and a gross margin of 12.4%, an increase of 1.6 percentage points [7] - The company is expected to see significant growth in net profit over the next few years, with projections of 2.24 billion yuan in 2026, 2.75 billion yuan in 2027, and 3.32 billion yuan in 2028, reflecting year-on-year growth rates of 66.93%, 22.63%, and 20.79% respectively [7] Financial Projections - Total revenue projections for Wanchen Group are as follows: 32.33 billion yuan in 2024, 51.46 billion yuan in 2025, 64.97 billion yuan in 2026, 75.95 billion yuan in 2027, and 87.35 billion yuan in 2028 [1] - The projected earnings per share (EPS) are 1.53 yuan for 2024, 7.03 yuan for 2025, 11.73 yuan for 2026, 14.39 yuan for 2027, and 17.38 yuan for 2028 [1] - The price-to-earnings (P/E) ratio is expected to decrease from 125.19 in 2024 to 11.05 in 2028, indicating a significant valuation recovery potential [1]