Soochow Securities released a research report maintaining its previous earnings forecast for GUOQUAN (02517), projecting the company's revenue for 2025-2027 at RMB 72.9/83.9/95.5 billion, representing year-over-year growth of +13%/15%/14%; net profit attributable to shareholders at RMB 4.2/5.0/5.8 billion, up +81%/19%/17% year-over-year; corresponding to P/E ratios of 19/16/14x. The firm maintains its "Buy" rating.
On September 25, 2025, the company announced its plan to use up to HK$100 million of its own funds to further repurchase H-shares in the open market. Soochow Securities' main viewpoints are as follows:
**Multiple Buybacks Enhance Shareholder Returns and Demonstrate Company Confidence**
Since 2024, GUOQUAN has issued three buyback announcements, released in November 2024, January 2025, and September 2025 respectively, with buyback amounts not exceeding HK$100 million each. The first two buybacks have been completed. Additionally, the company places great emphasis on shareholder returns, distributing RMB 200 million in dividends at the end of 2024 and RMB 190 million in interim dividends for 2025. The consecutive multiple buybacks and high-ratio cash dividends fully demonstrate management's strong confidence in the company and their attention to and friendliness toward shareholders.
**Peak Store Opening Season Approaching, Future Catalysts Expected**
In H1 2025, GUOQUAN achieved a net addition of 250 stores, with township stores contributing a net increase of 270 units. The company's township store expansion aligns with consumption trends in lower-tier markets, providing more diversified and value-oriented products for township consumers. The current township market has insufficient competition on the supply side, giving the company first-mover and scale advantages. According to grassroots research feedback, township store models show excellent unit economics, and franchisee enthusiasm remains strong. Combining supply-demand logic with research feedback, Soochow Securities believes the company's plan to achieve a net addition of 1,000 stores this year can be successfully implemented, with Q4 peak season expected to deliver on store opening expectations.
**Operating Capabilities Proven, Low Valuation Warrants Strong Recommendation**
The company's same-store revenue has maintained positive growth since the beginning of the year, with loss-making stores significantly turning profitable, validating the improving trend in store operations. Profitability has been fully released under scale effects, with the company's core operating profit margin reaching 5.9% in H1 2025, up 1.2 percentage points year-over-year; net sales margin at 5.9%, up 2.7 percentage points year-over-year. The current 2025 valuation is less than 20 times, warranting continued strong recommendation at current levels.
**Risk Warning:** Food safety issues, intensified industry competition, consumer spending recovery falling short of expectations.