According to a research report from Tianfeng Securities, DPC DASH (01405) stands as a leading player in the pizza segment with strong growth potential, positioned to achieve continuous expansion in the Chinese market. The firm remains optimistic about the company's store expansion plans, cost reduction and efficiency improvements, and enhanced profitability through headquarters expense dilution. Based on 25H1 results, the firm maintains its profit forecasts for 2025-27, projecting adjusted net profits of RMB 170 million, 270 million, and 380 million respectively, while sustaining the "Overweight" rating.

Key highlights from Tianfeng Securities include:

**25H1 Financial Performance Release** For 25H1, revenue reached RMB 2.59 billion, up 27.0% year-over-year. Store-level operating profit totaled RMB 380 million, growing 28.0% annually. Store-level operating margin stood at 14.6%, improving 0.1 percentage point compared to 24H1 and 0.2 percentage point versus 24H2. Adjusted net profit was RMB 90 million, surging 79.6% year-over-year. Adjusted net margin reached 3.5%, up 1.0 percentage point from 24H1 and remaining flat compared to 24H2.

**Store Expansion and Operations: Annual Opening Target 98% Secured, Mature Markets Maintain Positive Same-Store Growth**

1) **Store Expansion**: As of 25H1 end, total store count reached 1,198, representing 31.1% year-over-year growth. Net store additions in 25H1 totaled 190 units. By August 15, an additional net 43 stores were opened, with 27 stores under construction and 35 stores contracted, positioning the company to achieve its 2025 target of 300 new store openings (approximately 98% of annual opening target secured).

By city tier breakdown: First-tier cities housed 515 stores at 25H1 end, up 3.4% year-over-year, accounting for 43% of total stores, with net additions of 6 stores in 25H1. Non-first-tier cities contained 683 stores, growing 64.2% annually and representing 57% of total stores, with net additions of 184 stores in 25H1. The company entered 48 cities by 25H1 end, adding 9 new cities during the period.

2) **Same-Store Performance**: 25H1 same-store sales declined 1.0% year-over-year, primarily due to high base effects from strong initial sales momentum of stores opened in new markets after December 2022. When analyzed separately, first-tier cities maintained positive same-store growth in 25H1, and markets entered before December 2022 also showed positive same-store growth.

Average daily sales per store reached RMB 13,000, down 4.4% year-over-year, similarly affected by the high base of new market stores opened after December 2022.

3) **Revenue by City Tier**: In 25H1, first-tier market revenue totaled RMB 1.08 billion, up 7.2% year-over-year, with same-stores maintaining positive growth. Non-first-tier market revenue reached RMB 1.51 billion, increasing 46.6% annually, with revenue contribution rising to 58.2%, up 8 percentage points year-over-year, benefiting from store expansion and strong performance of new stores in newly entered markets.

4) **Membership**: Member count reached 30.1 million by 25H1 end, growing 55% year-over-year. Member-contributed revenue accounted for 66.0% of total revenue in 25H1, up 2.4 percentage points year-over-year.

**Cost and Expense Management: Payroll Cost Ratio Optimization** 25H1 raw material cost ratio remained stable at 27.3% year-over-year. Overall employee compensation expense ratio decreased to 33.8%, down 1.1 percentage points year-over-year.

Within this, store-level employee cash compensation expense ratio was 27.7%, up 0.3 percentage points year-over-year, attributed to increased average store headcount for new market entry preparations. Headquarters employee cash compensation expense ratio was 5.1%, down 0.4 percentage points year-over-year, primarily due to economies of scale. Share-based compensation expense ratio was 1.0%, down 1.0 percentage point year-over-year, mainly due to reduced granted share options.

Rental expense ratio (10.0%), depreciation expense ratio (4.8%), and advertising and promotion expense ratio (5.3%) remained relatively stable year-over-year.

**Risk Factors**: Same-store growth below expectations, store opening below expectations, raw material price increases, intensified industry competition.