Huaxi Securities: First deposit (02517) “buy” rating, small speculation business is ready to go

The Zhitong Finance App learned that Huaxi Securities released a research report saying that for the first time, Huaxi Securities was given a “buy” rating, with “eating at home” as the core position to meet the needs of target groups with convenience, high cost performance and multiple options; the supply chain side enhances turnover efficiency through self-production and acquisition of Huading's cold chain; in the franchise model, new business formats such as refined management of standard stores and “small stir-fries” have gradually taken shape and become new growth points.

The main views of Huaxi Securities are as follows:

Store-side business advantages: Combines the advantages of convenience, high cost performance, and multiple options to meet the needs of consumers who eat at home

With “eating at home” as the core position, pot ring products serve groups with convenient dining needs and high requirements for food quality. In terms of convenience, the demand for this group extends in the three directions of convenience, high cost performance, and multiple options. In terms of convenience, consumers are guaranteed to be able to eat at home fast/at any time through hot pot sets, combination packages, 24-hour operation, and quick cooking; in terms of cost performance, the price of a single item of hot pot ingredients is relatively in comparison with major fresh food supermarkets, and in-store packages can be promoted with a discount of more than 20% compared to single product purchases; The number of SKUs is increasing year by year, in a single year in '24 The number of new SKUs added reached a record high of 412.

Supply chain strengthening: supply chain self-production+cold chain acquisition to increase business coverage radius and achieve cost optimization

The company continues to strengthen its supply chain layout, 1) Processing plant layout: as of April '25, 7 processing plants were laid out through acquisition/investment, and costs were controlled through self-production of processed foodstuffs; in July '25, it was announced that it plans to invest 490 million yuan in Hainan Food Industrial Park to collect overseas food processing; 2) In '24, the parent company of Bowring Co., Ltd. acquired Huading Cold Chain to complement the existing supply chain system through third-party cold chains, effectively strengthening the store coverage network; 3) By the end of June '25, it had set up 19 digital central warehouses with product distribution range/distribution Sales volume has increased compared to the past, and the number of inventory turnover days has been clearly optimized; a strong supply chain system provides support for subsequent store expansion, and it is expected that costs will still be accurately controlled during subsequent store expansion.

Franchise model: Standard store/township store strategic play style gradually takes shape, farmers' store/stew shop has sufficient potential for growth

The pot circle continues to explore ways to take root in regional ecology, and continues to update and iterate stores around the “Eat at Home Solution”. Currently, it has four types of stores: standard stores, black pearl stores, farmers' stores, and township stores. In the past, standard stores are mainly dominated by standard stores and supported by township stores. Among them, standard stores are expected to continue to strengthen their ability to operate under the refined management model and five-star store manager training mechanism; the new stores have taken root and continue to innovate, and the store's penetration capacity is increasing, and it is gradually becoming a new support point for farmers; Restaurant “Food Restaurant” “10-20 square meter small store mode+low The “initial investment amount” model enters the farmers' market, and the “quick cooking” positioning accurately matches the needs of consumers in some farmers' markets; the new business format “frying pan” uses intelligent frying machines to optimize human efficiency to achieve standardization and multi-faceted data analysis of the most popular product menu. It is expected to become a new profit growth point for the company after the model runs through.

Future trends

The company is a leading food enterprise on the “eat at home” circuit in China. The number of store-side stores has exceeded 10,000, and the expansion stage is expected to accelerate in 26-27; looking at the branch type, business performance is expected to continue to improve under the new management model of standard stores, there is plenty of room for encryption in the township store market, and fresh cuisine continues to explore farmers' market layout paths, and the new business format of frying wok is ready; the supply-side supply chain network is rapidly being rolled out, and the acquisition of a third-party cold chain helps strengthen the distribution and procurement capacity of stores nationwide Our own factory enables us to continuously achieve strong cost control and terminal products Price advantage; Excellent financial structure, large cash surpluses on the book, and fast inventory turnover under the mainly asset-light model.

Risk Alerts

Competition risks in the industry, and the risk of new store launches falling short of expectations.