20260820-招银国际-锅圈-02517.HK-Expect_slower_store_expansion_with_broader_revenue_support_6页_1mb

Guoquan Food (2517 HK) Summary

Core Content

Guoquan Food (2517 HK) is a company that has seen growth in its revenue and net profit in the first half of 2026, with revenue and net profit increasing by 21.8% and 15.2% YoY respectively. Despite this, the company's core operating profit growth was slightly lower than its guidance, which signaled a more disciplined approach to store expansion.

The company has adjusted its FY26 store target to 13,100 from the previously guided 14,500, reflecting a shift in strategy from speed to quality. This includes a focus on large-store formats and a reduced closure rate, while the long-term goal of 20,000 stores remains. Guoquan is also expanding its revenue streams through membership, online channels, and overseas exploration, with the first Hong Kong store opening as a pilot for future international expansion.

Main Points

• Revenue and Net Profit Growth:

  • 1H26 revenue reached RMB 3,947 million, up 21.8% YoY.
  • Net profit reached RMB 211 million, up 15.2% YoY.
  • Core operating profit grew 18.3% YoY, slightly below guidance.

• Store Expansion Strategy:

  • FY26 store target reduced to >13,100 from 14,500, signaling a slower but more focused expansion.
  • Store count reached 12,198 in 1H26, with a net increase of 632.
  • Closure rate is expected to be below 4%, down from 5% previously.
  • Long-term goal of 20,000 stores remains intact.

• Revenue Diversification:

  • Membership grew to 82 million, contributing 73.2% of total consumption.
  • In-store Douyin GMV nearly doubled to RMB 910 million.
  • First Hong Kong store opened as a pilot for overseas expansion.

• Gross Margin (GPM):

  • GPM slipped to 21.5% in 1H26 due to raw material inflation and new lower-margin categories.
  • Management expects a mild improvement in GPM driven by supply-chain efficiency, high-margin hotpot-season offerings, and online-offline synergy.

• Valuation and Rating:

  • Target Price (TP) set at HK$3.07, based on a 14x FY26E PE.
  • CMBIGM has transferred coverage with a BUY rating.
  • Current Price is HK$1.85, with a potential upside of 65.9%.

Key Information

Financial Highlights

Store Growth and Format

Earnings Revision

Valuation Comparables

Valuation Metrics

Financial Ratios

Analyst Ratings

• BUY: Indicates the stock has potential for a return of over 15% over the next 12 months.
• HOLD: Indicates the stock has potential for a return of between +15% to -10%.
• SELL: Indicates the stock has potential for a loss of over 10%.
• NOT RATED: Indicates the stock is not rated.
• OUTPERFORM: Indicates the industry is expected to outperform the market.
• MARKET-PERFORM: Indicates the industry is expected to perform in line with the market.
• UNDERPERFORM: Indicates the industry is expected to underperform the market.

Analyst Certification

The analyst certifies that the views expressed in the report accurately reflect their personal views and that their compensation is not tied to the specific views in the report. Additionally, the analyst has not traded in the stock covered in the report within 30 days prior to its publication and will not trade in the stock within 3 business days after publication. They also do not serve as an officer of any of the companies covered and have no financial interests in them.

Risk and Disclaimer

• There are risks involved in trading any securities.
• The information in this report may not be suitable for all investors.
• CMBIGM does not provide individually tailored investment advice.
• Past performance is not indicative of future results.
• The value and returns of investments are uncertain and may fluctuate based on market conditions and other factors.
• Investors are encouraged to consult with a professional financial advisor before making investment decisions.