全渠道创新的全国性家庭食品专家

Anationalat-home foodexpert to innovate at allfronts Guoquan is the largest one-stop brand for at-home meal solutions inChina.Guoquanachievedretail salesofRMB11.1bnwith3% marketsharein 2022.The company offers a diversifiedproduct portfoliothatspans eightmajor categories(hotpot, barbecue, beverages, single-serve meals, ready-to-cook meal kits, fresh food, Western cuisines, and snacks).Such agreatvarietycancaterfordiversedining scenarios.In 2024,it has generatedabout RMB 6.5bn in sales, RMB 230mnin profit with 10,150 stores in China.Consumer-to-Factory Model:a number ofadvantages for customers Target PriceHK$4.80Up/Downside34.8%Current PriceHK$3.56 China Consumer Discretionary Walter WOO(852) 3761 8776walterwoo@cmbi.com.hk (“quick deliveryand convenience, goodquality, great bargain andmorevarieties”), franchisees and suppliers.Guoquanleveragesits C2Fmodel to deliver speed, quality, value and variety to the young and busyconsumers (esp. in lower tier cities) with over700 SKUs (400 new SKUs peryear). Backed bysixspecialized factories and top-tier suppliers, it ensuresstrict food safety and quality, as well as rapid delivery (available even pastmidnight).Guoquan’svertically integrated supply chain has madeitssellingprices roughly 10%/ 40%/ 80% below Meituan Xiaoxiang/ Yonghui/ Haidilaoand secure a clear leadership in hotpot, barbecue and set meal categories.Persistent product innovation: Blockbuster set meals to attract traffic Shareholding Structure and aggressive category expansion toraisesales volume.Guoquan’sblockbusterset meals convertedmassiveonline traffic into offline visits, ledby the viral “Ox trip dreedom hotpot set”(sold 5mn units and generated RMB500mn in just 7 months in 2024). In 2025, it has expanded intosteaks,crayfish, beers, desserts and frozen treats to boost off-season sales, whileplanned upstream investments to lift product quality and lower costs.Channel upgrades and expansion: LeveragingDouyinfor new user Source: Bloomberg acquisition, using membership programeand store ravamp to tap intonewtypes of demand and boost frequency.Guoquan not onlyaccelerated growth on Douyin since 2024,but also revamped themembership program(average spendand frequencylifted, membersgrewby48% and prepaid card salesalso grew by37% to nearly RMB 1bn). Storeupgrades also delivered strong returns, with 24-hour formats in higher-tiercities driving ~5% SSSG at low cost, and larger stores in lower-tier citiesachieving 20%+ SSSG with faster payback from lower rents and staffcosts.We forecast a17% sales and42% net profit CAGR during FY24-27E with NP att. margin rising to6.4% by FY27E.Such growth will beunderpinned by blockbuster product launches, channel expansion, categorydiversification,store upgrades across city tiers,and a revampedmembership program that drives higher purchasing frequency, supportedby strongerstafftraining to deepen customer retention. Margin expansionshould come from an improving product mix, greater supply chain efficiency,higher self-production, scale benefits and operating leverage.Weinitiate BUY with TP of HK$ 4.80, based on 23x FY26E P/E.In our Source: FactSet view,a premium should be deserved for Guoquan, because of: 1) itsvertically integrated business model, 2) massive store network, 3) strongbrand equity (in both products and channels) and 4) much faster salesgrowth (17% sales CAGR during FY24-27E).Hence, we are applying a 23xFY26E P/E for Guoquan, which has a4%discountvs/32% premium overpeers’ average/ median of 23.9x/ 17.4x. Contents Investment Thesis....................................................................................3Focus Charts and Tables........................................................................6Company Background.............................................................................7Guoquan is the largest one-stop brand for at-home meal solutionsin China................7Key positives and growth drivers.........................................................101) The Consumer-to-Factory (“C2F”) Model: a number of advantages for customers(“quick delivery and convenience, good quality, great bargain and more varieties”),franchisees and suppliers..........................................................................................102) Persistent product innovation: Blockbuster set meals to attract traffic and aggressivecategory expansion to grow sales volume.................................................................213) Channel upgrades and expansion: Leveraging Douyin for new user acquisition,using membership programe and store ravamp to tap into new types of demand andboost frequency........................................................................................................26Industry analysis and trends................................................................321) The dining at home industry sales are growing, while categories such as pre-prepped meals, at-home food delivery, and fresh grocery instant r