Guoquan is the largest one-stop brand for at-home meal solutions in
　　China. Guoquan achieved retail sales of RMB11.1bn with 3% market share in 2022. The company offers a diversified product portfolio that spans eight major categories (hotpot, barbecue, beverages, single-serve meals, ready- to-cook meal kits, fresh food, Western cuisines, and snacks). Such a great variety can cater for diverse dining scenarios. In 2024, it has generated about RMB 6.5bn in sales, RMB 230mn in profit with 10,150 stores in China.
　　Consumer-to-Factory Model: a number of advantages for customers (“quick delivery and convenience, good quality, great bargain and more varieties”), franchisees and suppliers. Guoquan leverages its C2F
　　model to deliver speed, quality, value and variety to the young and busy consumers (esp. in lower tier cities) with over 700 SKUs (400 new SKUs per year). Backed by six specialized factories and top-tier suppliers, it ensures strict food safety and quality, as well as rapid delivery (available even past midnight). Guoquan’s vertically integrated supply chain has made its selling prices roughly 10%/ 40%/ 80% below Meituan Xiaoxiang/ Yonghui/ Haidilao and secure a clear leadership in hotpot, barbecue and set meal categories.
　　Persistent product innovation: Blockbuster set meals to attract traffic and aggressive category expansion to raise sales volume. Guoquan’s
　　blockbuster set meals converted massive online traffic into offline visits, led by the viral “Ox trip dreedom hotpot set” (sold 5mn units and generated RMB 500mn in just 7 months in 2024). In 2025, it has expanded into steaks, crayfish, beers, desserts and frozen treats to boost off-season sales, while planned upstream investments to lift product quality and lower costs.
　　Channel upgrades and expansion: Leveraging Douyin for new user acquisition, using membership programe and store ravamp to tap into new types of demand and boost frequency. Guoquan not only
　　accelerated growth on Douyin since 2024, but also revamped the membership program (average spend and frequency lifted, members grew by 48% and prepaid card sales also grew by 37% to nearly RMB 1bn). Store upgrades also delivered strong returns, with 24-hour formats in higher-tier cities driving ~5% SSSG at low cost, and larger stores in lower-tier cities achieving 20%+ SSSG with faster payback from lower rents and staff costs.
　　We forecast a 17% sales and 42% net profit CAGR during FY24-27E with NP att. margin rising to 6.4% by FY27E. Such growth will be
　　underpinned by blockbuster product launches, channel expansion, category diversification, store upgrades across city tiers, and a revamped membership program that drives higher purchasing frequency, supported by stronger staff training to deepen customer retention. Margin expansion should come from an improving product mix, greater supply chain efficiency, higher self-production, scale benefits and operating leverage.
　　We initiate BUY with TP of HK$ 4.80, based on 23x FY26E P/E. In our
　　view, a premium should be deserved for Guoquan, because of: 1) its vertically integrated business model, 2) massive store network, 3) strong brand equity (in both products and channels) and 4) much faster sales growth (17% sales CAGR during FY24-27E). Hence, we are applying a 23x FY26E P/E for Guoquan, which has a 4% discount vs / 32% premium over peers’ average/ median of 23.9x/ 17.4x.