Hongqi Chain(002697)2022-12-06 23:56Group 1: Company Advantages and Operations - Red Flag Chain's advantage lies in its self-developed backend system utilizing big data for category management of store products [2] - The company primarily opens stores in community and high foot traffic areas, tailoring different store formats based on regional characteristics [2] - The current logistics centers meet store distribution needs, with no plans for new centers in the short term, but upgrades to existing centers are planned [3] Group 2: Store Management and Online Sales - Store closures are infrequent and mainly influenced by lease terms and urban development; well-performing stores that close are typically replaced by nearby new stores [3] - Online sales through the Red Flag Chain APP are popular for purchasing local specialties, and the APP is self-developed with no additional costs incurred [3] - Most stores are leased, with a small percentage being self-owned; rental prices in Chengdu are expected to rise, but the company maintains lower rental costs compared to competitors in the same area [3] Group 3: Future Plans and Financials - The company currently operates self-managed stores and has no plans to establish franchise stores [4] - There will be no major adjustments to the product structure, although minor adjustments can be made as needed [4] - The company generally adopts a sales-based settlement method with suppliers, except for a few high-demand products [4] - Future acquisitions will be considered based on actual circumstances, primarily focusing on convenience stores [4] - The major shareholder does not plan to subscribe to the upcoming non-public stock issuance due to already holding a high percentage of shares [4] - Store managers are trained internally, and the turnover rate is low, indicating stability [4]