SDIC Securities has issued a research report forecasting that GuoQuan (02517) will achieve revenues of RMB 10.03 billion, 11.91 billion, and 13.67 billion for the years 2026 to 2028, representing year-on-year growth rates of 28.4%, 18.8%, and 14.8%, respectively. Net profit attributable to shareholders is projected to be RMB 610 million, 790 million, and 950 million, with corresponding growth rates of 41.3%, 28.5%, and 20.1%. The firm has assigned a Buy-A investment rating and a six-month target price of HK$5.68.

Targeting the mass market, GuoQuan focuses on being a "comprehensive, fast, high-quality, and economical" one-stop meal solution brand. As a leading brand in the at-home dining sector in China, GuoQuan began in 2015 by supplying the hot pot B2B market. It transitioned to a C2C community retail model with franchising in 2017 and was listed on the Hong Kong Stock Exchange in 2023. Having progressed through three stages—supply chain development, brand expansion, and digital transformation—it has become a "community central kitchen" within a decade. The company's ownership is relatively concentrated, with founder Yang Mingchao holding approximately 30% of shares, and its core management team is stable and experienced. Its product portfolio covers eight categories, including hot pot and barbecue, with hot pot as the foundation and barbecue as the secondary growth driver, addressing consumer meal preparation challenges through a one-stop solution.

Between 2020 and 2022, the company rapidly expanded its store network and increased revenue, capitalizing on pandemic-related trends. Revenue saw a temporary decline in 2023 as dining out resumed, but strategic adjustments have since reignited growth. Gross profit margin has continued to rise, supported by economies of scale, supply chain integration, and increased self-production, thereby strengthening profitability.

The at-home dining market in China demonstrates strong growth potential, with the overall market size expected to exceed RMB 7.1 trillion by 2027. The prepared meal products segment is particularly promising, with a projected compound annual growth rate of 20.7% from 2022 to 2027, reaching a market size of RMB 940 billion by 2027, approaching the trillion-yuan threshold. At-home dining offers core advantages in convenience, control, and cost-effectiveness, aligning well with consumer demands for time efficiency and food safety, and presenting a competitive edge over traditional cooking from scratch and food delivery. As a leading player in this segment, GuoQuan is well-positioned to benefit from both market expansion and increasing penetration, ensuring strong future growth prospects.

By focusing on the vast at-home dining market, GuoQuan has built its competitive edge through a combination of channel strategy and supply chain capabilities. The brand differentiates itself through high value-for-money and transparent quality control, with per capita spending only one-half to one-third that of food delivery or dining out, significantly reducing consumer costs. Its offline stores adopt a "what you see is what you get" retail model, addressing trust concerns associated with opaque restaurant kitchens in the delivery sector. Meanwhile, its dense network of community stores and online delivery services narrow the convenience gap with food delivery, balancing affordability and ease of access. In terms of channels, GuoQuan utilizes a light-asset model with small stores of 50-80 square meters and low franchising thresholds, enabling over half of its stores to be located in third-tier cities and below, highlighting its strength in penetrating lower-tier markets. On the supply chain front, a strategy of single-product-single-factory, direct supply systems, and digital management has established significant cost advantages. Product selection focuses on one-stop solutions for hot pot and barbecue, avoiding hidden costs associated with traditional grocery shopping. Facing competition from players like Walmart, Sam's Club, and Hema NB, GuoQuan's strong presence in lower-tier markets and robust supply chain are expected to allow it to capitalize fully on industry growth.

Currently, GuoQuan is expanding consumption scenarios through a multi-format store matrix, laying a solid foundation for long-term brand growth. First, larger stores, positioned as "community central kitchens," have upgraded spatial experience, product variety, and emotional services based on proximity principles, enhancing single-store profitability and elevating brand value. Second, township stores employ a B2C integrated model, leveraging differentiated product mixes, low-barrier franchising, and an extensive cold-chain network to deepen penetration in lower-tier markets and unlock significant expansion potential. Third, stir-fry focused outlets have successfully entered the instant meal segment through digital control and standardized operations. The camping business, driven by both equipment and ingredients, is well-placed to benefit from the growing camping economy. Additionally, GuoQuan strengthens customer loyalty through private membership systems and cultural IP collaborations.

With the realization of scale effects and further supply chain refinement, profitability is expected to improve. The establishment of the Hainan industrial park will leverage policy benefits, reducing costs from procurement tariffs to tax efficiencies, while also facilitating expansion into Southeast Asia. High-margin segments such as camping and stir-fry meals continue to grow, and in-house branded equipment, prepared semi-finished products, and self-produced compound seasonings will further boost margins. Future expansion into higher-margin categories like beverages is also planned. On the cost side, the scale of over ten thousand stores enhances natural visibility, reducing sales expenses, while digital infrastructure investments are yielding returns, helping to dilute administrative costs. As revenue grows, various expense ratios are expected to continue declining. GuoQuan is now entering a phase focused on store-level optimization and profit realization, with its overall profit center anticipated to rise.

Key risks include food safety issues, slower-than-expected recovery in the dining-out sector, underperformance of new store formats and business models, and potential shortfalls in profit forecasts.