Dongwu Securities: First to Meet Xiaomian (02408) “Buy” Ratings, Accurate Positioning Became the Dark Horse of Chinese Pasta

The Zhitong Finance App learned that Dongwu Securities released a research report saying that for the first time, it was given a “buy” rating to meet small noodles (02408), and meet small noodles as the leading brand of Chinese noodle restaurants. In recent years, it has achieved rapid expansion through accurate positioning of Sichuan and Chongqing flavors and implementing standardization and shopping mall store models. As of November 2025, the number of stores has reached 465, with more than 100 new stores in reserve. It is expected that it will continue to expand rapidly in the next two years. With a clear expansion strategy, overseas market layout and operation optimization, the company has clear room for long-term growth.

The main views of Dongwu Securities are as follows:

The first tier of Chinese noodle restaurants is increasing their potential to accelerate store opening

In 2024, the market share of Meet Xiaomian in Chinese noodles/Chinese fast food restaurants was 0.5%/0.14% respectively. As of November 2025, the company's restaurant network included 451 restaurants in 22 cities in mainland China and 14 restaurants in Hong Kong, and 115 new restaurants are still being prepared to open. In 2024, the company's revenue increased from 418 million yuan to 1.154 billion yuan, and the CAGR reached 66%; accelerated store expansion helped the company achieve a profit inflection point. The company's adjusted net profit increased to 63 million yuan in 2024. The adjusted interest rate in 2024 was 5%, and the operating inflection point has been reached. The company's stores are mainly directly managed, and the proportion of direct-run restaurants increased from 65% in 2022 to 78% in 2024.

Precise positioning and advanced layout make Chinese pasta a dark horse

(1) Fast food chains are booming, and overseas Chinese food is worth paying attention to: the market size of chain restaurants/non-chain restaurants was 1.26/4.32 trillion yuan in 2025, respectively, and the CAGR in 2019-2024 was 11%/5%, respectively. In 2024, the global Chinese food market reached 8.1 trillion yuan, of which overseas markets contributed 2.62 trillion yuan, accounting for 32.4%. Hong Kong/Singapore and other places have great potential.

(2) As the fourth largest Chinese food category, Chinese noodle restaurants will have an industry size of 286.6 billion yuan in 2024 (accounting for 29.80%). In 2024, we saw a transaction volume of 1,348 billion yuan for small noodle products, with a market share of 0.5%, ranking fourth. However, the transaction volume CAGR from 2022 to 2024 was 58.6%, which is significantly ahead of the top five other brands.

(3) Reviewing the company's history, the bank believes that three factors contributed to the company's success: ① anchoring a differentiated high diving track, that is, spicy food in Sichuan and Chongqing; ② implementing standardization and digitalization earlier; ③ pioneering the shopping mall model. In 2024, the number of stores in shopping centers accounted for 64%, and stores along the street, office areas and transportation hubs together accounted for 34%. Shopping mall stores have the characteristics of high traffic, high premiums, high potential energy, low education costs, and low marketing expenses. The mall store model provides good demonstration support for the smooth expansion of stores in the future.

Accelerating store expansion

(1) The bank believes that there is plenty of room for new cities to enter the exhibition industry and encrypt stores in the original city. The number of company stores is expected to be about 500 by the end of 2025, and is expected to surpass 680 in 2026, and is expected to break through 900 in 2027: through continuous price cuts and alliances, vertical encryption of supercities such as Guangshen and the horizontal expansion of second- and third-tier cities, while increasing the expansion of Hong Kong and overseas markets.

Risk Alerts

There is a risk of increased competition in the catering market, rising raw material costs, brand aging, loss of customers, and stock price fluctuations.