Kaiyuan Securities issued a research report stating that BUSYMING (01768) is a leading enterprise in the volume retail sector. The company has established a strong operational moat through its high-efficiency virtuous cycle business model. With continuous rapid store expansion and steadily improving operational efficiency, the company has achieved sustained earnings growth. The brokerage forecasts the company's revenue for 2025-2027 to reach RMB 61.42 billion, RMB 80.13 billion, and RMB 93.64 billion, representing year-on-year growth of 56.1%, 30.5%, and 16.9% respectively. Net profit attributable to shareholders is projected to be RMB 2.38 billion, RMB 3.54 billion, and RMB 4.43 billion, with year-on-year increases of 185.5%, 48.7%, and 25.3% respectively. Corresponding earnings per share (EPS) are estimated at HKD 12.47, HKD 18.43, and HKD 23.24. The current stock price implies price-to-earnings (P/E) ratios of 33.7x, 22.8x, and 18.1x for those years. This initial coverage comes with a "Buy" rating. Key points from Kaiyuan Securities are as follows:

The domestic leisure food and beverage retail industry exceeded RMB 3.7 trillion in 2024 and is expected to maintain steady growth, indicating a vast market for the company. Structurally, lower-tier markets account for RMB 2.3 trillion, representing a larger share. According to Frost & Sullivan projections, growth rates in lower-tier markets are expected to outpace those in upper-tier markets by 2029, showing greater development potential. In terms of business models, the volume retail channel has established comprehensive advantages in cost-effectiveness, product variety, wide coverage, and positive customer experience. Frost & Sullivan forecasts that the market share of specialty stores, represented by the volume retail model, within the leisure food and beverage retail sector will continue to increase by 2029.

BUSYMING, as a leader in the volume retail track, operates with high efficiency. The company selects quality manufacturers at the supply chain end, conducts large-scale procurement of superior products, and enhances inventory turnover efficiency. In store expansion, it rapidly opens new outlets leveraging an efficient, modern franchise system, achieving rapid scale growth. Simultaneously, at the store operation level, it offers consumers a wide range of products, high quality-to-price ratio, continuously updated items, and a pleasant, comfortable shopping experience. In response, consistent customer repurchases provide BUSYMING with sales data support and real-time demand insights, enabling quick identification of popular products. BUSYMING efficiently communicates product selection and customization needs upstream to suppliers, who respond promptly with production, capturing business opportunities. This highly efficient virtuous cycle business model constructs a strong operational moat for the company, facilitating its rapid growth.