Fujian Wanchen Biotechnology Group Co.,Ltd. (300972.SZ), known as the "first stock in bulk snack retail," continues its strategic expansion through both Hong Kong listing pursuit for A+H dual platform positioning and ongoing acquisition activities.

However, the company faces an increasingly competitive environment. The market has widely noted significant store closures in Jinan under the company's Haoxianglai brand, while the company's store opening pace in 2025 has significantly decelerated compared to last year. Conversely, competitors continue accelerating expansion.

From a management perspective, the company welcomed a new chairman in July, two months after the former chairman was detained in early March.

**Regulatory Approval for Nanjing Wanyou Acquisition**

On October 9, Fujian Wanchen Biotechnology Group announced receiving the "Decision on Not Implementing Further Review of Business Concentration Anti-monopoly Review" from the State Administration for Market Regulation. The planned cash acquisition of 49% equity in Nanjing Wanyou Commercial Management Co., Ltd. (Nanjing Wanyou) has passed preliminary review, allowing immediate implementation of the concentration.

This marks the passage of the most critical regulatory hurdle. In mid-August, the company disclosed its acquisition plan: paying 1.379 billion yuan in cash to Huainan Shengyu and Huainan Huixiang for 49% equity in Nanjing Wanyou. Simultaneously, Fujian Agricultural Development, Zhangzhou Jinwanchen, Wang Zening, and Zhang Haiguo plan to transfer 9.89 million shares (5.27% of total share capital) to Zhou Peng, the actual controller of Huainan Shengyu. Previously, Wanchen indirectly held 51% of Nanjing Wanyou through Nanjing Wanpin. Upon completion, the company will directly and indirectly hold approximately 75.01% of Nanjing Wanyou's equity.

Nanjing Wanyou specializes in leisure food procurement, sales, and brand operations. Its team possesses nearly 10 years of bulk snack management and operational experience, establishing significant competitive advantages in the bulk snack sector through rich industry insights, local consumer understanding, and mature operations, supply chain, and logistics systems. Nanjing Wanyou's main stores cover Anhui, Shanxi, Henan, Hebei, Inner Mongolia, and other regions, forming strong regional brand influence through efficient supply chain management and precise market positioning.

For 2023, 2024, and the first five months of 2025, Nanjing Wanyou achieved revenues of 3.119 billion yuan, 7.712 billion yuan, and 4.1 billion yuan respectively, with net profits attributable to parent company shareholders of -41.21 million yuan, 246 million yuan, and 142 million yuan respectively.

Nanjing Wanyou's store coverage increased from 1,289 at end-2023 to 3,041 at end-2024, reaching 3,212 by end-May 2025. Bulk snack stores primarily cover East China, North China, and Central China regions, with sales revenue from these regions exceeding 90%.

Market analysts note that nationwide bulk snack competition is exceptionally fierce, with the two largest players being Wanchen's Haoxianglai and Ming Ming Very Busy. Coincidentally, both companies are pursuing Hong Kong IPOs. The companies compete comprehensively across network layout, product categories, and pricing strategies. Wanchen's acquisition of Nanjing Wanyou provides absolute controlling stake, enabling comprehensive support for subsidiary business development while leveraging Nanjing Wanyou's regional market advantages to assist Haoxianglai's deeper market penetration.

**Store Expansion Pace Slows Dramatically While Competitors Open Over 20,000 Outlets**

On April 28, Ming Ming Very Busy first submitted its prospectus to the Hong Kong Stock Exchange, with Fujian Wanchen Biotechnology Group following five months later. The key difference is that Wanchen is already A-share listed.

According to the prospectus and Frost & Sullivan data, Fujian Wanchen Biotechnology Group is China's leading and fastest-growing scale snack and beverage retailer, with GMV growing 282% year-over-year from 2023 to 2024. Haoxianglai ranked first among Chinese snack and beverage retail brands by GMV in 2024, becoming the first nationwide bulk snack and beverage retail brand to exceed 10,000 stores.

As of June 30, 2025, the company's store network exceeded 15,000 locations across 29 provinces, municipalities, and autonomous regions in China, establishing significant leading positions in economically developed regions like the Yangtze River Delta and populous provinces including Shandong, Shanxi, Henan, and Hebei. As of August 31, 2025, registered members exceeded 150 million, active members exceeded 110 million, with average monthly consumption frequency of 2.9 times per active member.

During 2022-2024 and the first half of 2025, franchise store ratios were 69.0%, 96.5%, 99.3%, and 99.4% respectively. As of June 30, 2025, the company operated 15,275 franchise stores, growing from 4,560 at end-2023 to 14,098 at end-2024, and further to 15,275 in the first half of 2025. Franchise store closure rates were 1.8%, 1.6%, 1.5%, and 1.9% respectively.

Notably, while the company states franchise store closure rates are far below industry averages, the first half's 290 closures far exceeded the past two years' total.

"Under excessively fierce bulk snack store competition, increasingly brutal conditions are inevitable. With consumers pursuing greater value and conservative spending capabilities, slowing brand expansion speeds and increased franchise closures are understandable," noted market analysts.

From period-end franchise store numbers, 2024 added 9,538 stores while the first half of 2025 added only 1,177. From new franchise store openings during periods, 2024 added 9,746 stores while the first half of 2025 added only 1,467.

Whether Wanchen's dramatically slowing franchise store growth represents a first-half phenomenon with second-half acceleration, or continued deceleration in 2026, investors may observe through store numbers to understand competitive strategy changes.

Additionally, competitor Ming Ming Very Busy announced in September that nationwide stores exceeded 20,000, receiving authoritative certification from international consulting firm Frost & Sullivan as the first domestic leisure food and beverage chain enterprise to exceed 20,000 stores.

From 2022-2024, Ming Ming Very Busy's franchise stores numbered 1,898, 6,569, and 14,379 respectively, representing 99.8%, 99.8%, and 99.9% of total stores.

This means Ming Ming Very Busy continued large-scale expansion this year, adding at least 5,600+ stores, creating a 4,000-5,000 store gap with Wanchen. However, including recently acquired Nanjing Wanyou stores, Wanchen's total store count exceeds 18,000.

Recently, multiple "Haoxianglai" snack stores in Jinan have suspended operations. Regarding closures, the Jinan regional manager indicated excessive store density led some stores to relocate, possibly to Yantai and Zhangqiu.

However, Wanchen is widely recognized as having prominent advantages in East China regions.

A September 22 research report noted that as of mid-year, Wanchen operated 8,727 stores in East China markets, representing 56.8% of total stores. By comparison, the second-largest Central China market represented only 13.41%, showing significant gaps with East China. The company's East China layout intensity far exceeds other markets, largely considering local consumption levels. Given rapid premium snack growth in East China markets, strong East China positioning helps improve overall store SKU structure and enhance manufacturer and bulk retail profitability.

**Explosive Performance Growth and Duopoly Formation**

Despite slowing store expansion, Wanchen's financial performance remains strong.

During reporting periods, the company achieved revenues of 549 million yuan, 9.294 billion yuan, 32.329 billion yuan, and 22.583 billion yuan, with net profits of 68 million yuan, -176 million yuan, 611 million yuan, and 861 million yuan respectively. Adjusted net profits (non-IFRS measures) were 39.28 million yuan, -28.11 million yuan, 823 million yuan, and 922 million yuan respectively.

In the first half of 2025, Wanchen's revenue grew 106.89% year-over-year, while net profit attributable to parent company increased 50,358.8% year-over-year. Overall, the company achieved explosive revenue and net profit growth.

During the same periods, gross margins were 1.1%, 9%, 10.7%, and 11.4% respectively.

A research report from early September identified three-way mutual benefits in bulk snack retail: 1) For consumers: high value proposition with terminal prices averaging 7%-40% below supermarkets or convenience stores, plus diverse categories with single stores carrying at least 1,800 SKUs. 2) For franchisees: high store efficiency with leading brands achieving over 20,000 yuan/square meter productivity and fast business turnover with under 2-year investment payback periods. 3) For upstream manufacturers: incremental channel access, rapid county-level market penetration, and fast payment without account receivable risks.

Regarding competition between Wanchen and Ming Ming Very Busy, analysts noted duopoly formation with stores in expansion phase: 1) Competition landscape: The bulk snack retail first half primarily compared store expansion speeds to quickly establish brand and scale effects. Current industry duopoly leaders both exceed 15,000 stores, significantly ahead of peers. 2) Store potential: Based on per-capita store density calculations, under neutral assumptions, the two leaders could operate 46,000 stores by 2027, representing 60% expansion space from end-2024. 3) Core competitiveness: Refined operations will be the second half's core competitive advantage, with Wanchen accumulating deep advantages in product selection strategies, store operations, consumer interaction, and supply chain segments.

Three major performance drivers for Wanchen include: 1) Store model adjustments with pending single-store revenue improvements. In December 2024, the company launched "Laiyoupin Money-Saving Supermarket" exploring full-category discount supermarkets. If the model succeeds and expands nationally, it could significantly boost single-store revenue and raise store number ceilings. 2) Scale effects plus internal efficiency improvements may improve net margins. Considering scale growth expense dilution, reduced franchise subsidies, and peaked share-based payments, expense ratios are expected to decline from 2025-2027. 3) Minority stake recovery thickening parent company net profits. The company announced acquisitions of 49% stakes in Nanjing Wanhao (2024) and Nanjing Wanyou (2025), with parent company net margins of 1.37%/0.9% in late 2024 and 2024 respectively.

Analysts project 2025-2027 parent company net profits of 970 million yuan, 1.35 billion yuan, and 1.66 billion yuan respectively, representing +229%/+40%/+23% year-over-year growth with corresponding EPS of 5.14/7.22/8.86 yuan per share. Using PEG valuation methodology with 32X PE for 2026 (PEG=0.8), the target price is 232.88 yuan per share with initial "buy" rating coverage.