Transparency GUOQUAN (02517) annual report: Focus on both expanding the basic base of ten thousand stores and the core barriers, achieving double growth in revenue and core operating profit.

Under the trend of rational consumption and the "lazy economy" brought by fast-paced life, the demand for cost-effectiveness is superimposed, and 2C pre-made meals have become a growing force to be reckoned with in the consumption track. Taking the leading brand in home-cooked meal products, GUOQUAN (02517), as an "observation sample", the company revealed its 2024 performance report on March 28, showing high-quality growth in core financial data, undoubtedly revealing the development potential of this track. In 2024, the company achieved revenue of 6.47 billion yuan, a year-on-year growth of 6.2%, with core operating profit of 311 million yuan, a year-on-year growth of 3.1%, achieving growth in both revenue and core operating profit. At the same time, GUOQUAN also announced a cash dividend plan of approximately 200 million yuan, with a 39.8% increase in cash dividends compared to the same period last year. Stable growth in core financial data combined with continuous dividend feedback to investors further highlights GUOQUAN's growth potential and long-term development philosophy, as well as revealing the forward-looking and efficient strategic layout of the company. Store innovation + channel expansion, multi-dimensional consolidation of the base of ten thousand stores Looking at GUOQUAN's financial report, as a leader in the field of retailization of Chinese community catering, the double growth in revenue and core operating profit in 2024 was not achieved overnight, but it was due to the strengthening of the company's base of ten thousand stores from multiple dimensions to release sufficient growth vitality. Firstly, in terms of store innovation, the company focuses on sinking markets and scene extension, further tapping into the industry's development dividends. During the period, GUOQUAN actively innovated store types and transformed and upgraded existing stores. For example, polishing store types for farmer's markets and upgrading store types for towns. At the same time, based on a deep understanding of sinking markets, the company also achieved remarkable results in store expansion in town markets, with a net addition of 287 town stores in 2024. At the same time, the company also introduced smart unmanned retail pilots, with some stores extending operating hours to 24 hours and introducing IoT and AI technology to explore unmanned retail models to cover instant consumption demand during the night at lower costs, creating a smart retail network that covers all hours. Secondly, in terms of channel expansion, the company integrated with Wuxi Online Offline Communication Information Technology Co., Ltd., breaking through traffic circles and strengthening the company's channel advantages further. In 2024, online channels were efficiently implemented by GUOQUAN, through platforms such as Douyin, to create phenomenal single products, such as the "99 yuan tripe freedom combo" with sales exceeding 500 million yuan in 7 months, with a total online exposure of 6.21 billion times in the year, driving a substantial increase in members. At the same time, the company also started a new model of "instant retail" by establishing Wuxi Online Offline Communication Information Technology Co., Ltd. channel integration based on front-end stores to reach consumers frequently. This model dynamically schedules inventory through digital systems, reduces delivery losses, extends store service hours, and taps into incremental markets. In addition, through the "membership project", GUOQUAN establishes close online and offline connections and interactions with consumers to improve consumer recognition and repurchase rates. In 2024, the company achieved a double increase in the number of members and prepaid card storage amount, with registered members by the end of the year reaching 41.3 million, a year-on-year increase of 48.2%, and prepaid card pre-storage amount reaching approximately 990 million yuan, a year-on-year increase of 36.6%. Through the above actions, the penetration of sinking markets and scene extension anchored in industry increments, Wuxi Online Offline Communication Information Technology Co., Ltd., merging and breaking through traffic circles to expand the user base, GUOQUAN's actions around store innovation and channel expansion further solidify the company's base of ten thousand stores. As of the end of 2024, GUOQUAN has maintained a scale of over ten thousand stores, with 10,150 stores covering 31 provinces, autonomous regions, and municipalities directly under the Central Government, radiating 2,000-3,000 households per store, forming a vast community store network, providing continuous growth vitality for the company's performance. The supply chain wins all, building core barriers from multiple angles As we all know, the 2C prefabricated meal product industry chain is complex, and for related companies, taking the middle supply chain as the starting point and establishing their own brand products/channels downstream is the key to success in the industry. Based on this development theory, in 2024, GUOQUAN further deepened its supply chain advantages around the two main directions of "single product, single factory + supplier management", as follows: In terms of single product, single factory, GUOQUAN focuses on enhancing efficiency through specialization, such as having core single products produced by independent factories, forming an "one factory, one product" model of extreme specialization. This model reduces the complexity of production processes and, through economies of scale, lowers unit costs to support the launch of high-cost-effective explosive products; it also focuses on quality and supply stability, such as in GUOQUAN's sour soup factory in Taijiang, Guizhou, which achieves standardized production throughout the entire process by locking in local chili ingredients, avoiding quality fluctuations under OEM manufacturing. In supplier management, GUOQUAN simplifies and operates an efficient supply chain model, from factory to central warehouse, and then distributed to retail stores, eliminating unnecessary intermediate links, optimizing cost control, and providing economical products for franchisees and consumers. It also collaborates with warehousing and logistics suppliers to achieve next-day delivery of most orders from the central warehouse to retail stores. In addition, the company employs digital operations in the supply chain, monitoring dynamic supply and demand from the procurement side to the store side to ensure efficient management of the entire supply chain. With data as evidence. By the end of 2024, GUOQUAN had a total of 6A single ingredient production factory focuses on the manufacturing and processing of beef, meatballs, seasonings, and river products. At the same time, GUOQUAN has reached cooperation with 266 ingredient suppliers such as Anying and Sanquan, and established a nationwide logistics network. The product portfolio is rich, including hot pot, barbecue, beverages, and other categories. Approximately 95% of the products sold nationwide are own-brand products.In conclusion, it can be seen that GUOQUAN has achieved full chain control from the procurement end to the consumption end through the deep coordination of "single product single factory + supplier management", not only reducing costs, ensuring quality, and strengthening the "moat" of the supply chain, but also enabling the company to have sufficient dynamic support for its strategic goals of expanding into the lower-tier market, innovating instant retail, and internationalizing layout. For the future, GUOQUAN indicated in its financial report that it will continue to comprehensively strengthen the entire industry chain, expand and deepen sales networks, continuously explore lower-tier markets; strengthen the member ecosystem, empower the brand through IP; promote industrial layout, strengthen the supply chain system, consolidate product core competitiveness, etc. In addition, the company may position instant retail and overseas business as new growth points. Therefore, the high-quality growth of GUOQUAN's performance in 2024 is not accidental, but the company is building a path of sustainable development that combines growth and long-termism. In the future, as supply chain efficiency continues to optimize, the scale effect of thousands of stores continues to be released, the second growth curve gradually emerges, and the company's performance and valuation are expected to reach higher levels.