70% of New Stores Opened in Township Areas, Guoquan Plans to Open Nearly 3,000 Stores This Year

Last year, Guoquan’s revenue and net profit both increased, delivering what can be considered its best “performance report” since listing. The reopening and expansion of stores were key drivers of its performance growth. This year, Guoquan set higher goals: net store additions exceeding 2,934; store efficiency achieving high single-digit growth; and core operating profit growth significantly outpacing revenue growth.

On March 12 after market close, Guoquan (02517.HK) disclosed its 2025 annual report. During the reporting period, the company achieved revenue of 7.81 billion yuan, a year-on-year increase of 20.71%; net profit attributable to shareholders was 433 million yuan, up 87.76% year-on-year, marking its best “performance report” since listing.

The reopening and expansion of stores remain a major support for performance growth.

As of December 31, 2025, Guoquan had a total of 11,566 stores nationwide, a net increase of 1,416 stores compared to the previous year, contrasting with a net decrease of 157 stores in 2024.

A trend is emerging: Guoquan is accelerating its market penetration.

In 2025, the company added 1,004 rural township stores, reaching a total of 3,010 stores, accounting for 70% of the year’s new store openings. According to disclosures, new township stores differ from standard community stores in product mix and store display.

Mid-to-high-tier cities mainly saw renovation and optimization efforts. Guoquan launched 24-hour unmanned retail stores, completing the digital and unmanned upgrade of over 3,000 retail stores in 2025.

According to Huachuang Food & Beverage Research, Guoquan’s average store (per store) grew by about 7.6% last year, supporting overall performance growth.

Given the growth trend in 2025, Guoquan set higher targets: it expects the total number of stores to exceed 14,500 in 2026, with net additions of over 2,934 stores and a store closure rate below 4%. It also aims for high single-digit growth in store efficiency and a core operating profit growth rate significantly higher than revenue growth.

However, behind the high growth, there are concerns.

In 2025, the company’s gross profit margin was 21.6%, down 0.3 percentage points from the previous year, mainly due to an increased proportion of lower-margin sales channels.

Currently, 99% of Guoquan’s stores are franchise stores, with most revenue coming from product sales to franchisees. In 2025, this revenue grew 14% year-on-year to 6.219 billion yuan, accounting for about 79.6% of total revenue, down 4.6 percentage points from the previous year.

Other sales channels generated 1.417 billion yuan in 2025, a 63% increase year-on-year, with their proportion rising from 13.4% to 18.2%. This revenue mainly comes from sales to food wholesalers, supermarkets, restaurants, and other enterprise clients. While B2B business is growing rapidly, its gross margin is relatively low.

The growth in enterprise customer business has also led to longer receivable periods.

By the end of 2025, Guoquan’s trade receivables amounted to 425 million yuan, a significant increase of about 82% from 234 million yuan at the start of the year. The company admitted this was mainly due to increased sales to enterprise clients during the year. Correspondingly, the days sales outstanding (DSO) for trade receivables increased from 8.1 days in 2024 to 15.4 days in 2025.

In recent years, Guoquan has been expanding its alcohol market around home dining scenarios.

In 2024, Guoquan began entering the craft beer category; in 2025, its controlling shareholder Guoquan Industrial’s wholly owned subsidiary, Henan Guoquan Industrial, acquired a 51.81% stake in Songhe Brewery, becoming its controlling shareholder; in February 2026, founder Yang Mingchao was appointed chairman of Songhe Brewery, ushering in the “Yang Mingchao era.”

Subsequently, Guoquan disclosed related-party transactions, stating plans to purchase alcoholic beverages from Songhe by the end of 2026, with a maximum total amount of 200 million yuan.

This figure has surged significantly compared to previous years. From 2023 to 2025, Guoquan’s purchases of alcohol from Songhe were 417,000 yuan, 31.56 million yuan, and 23.73 million yuan, respectively.

Guoquan explained at length why procurement demand has increased markedly: alcohol is an important product category for expanding sales and increasing revenue; it plans to vigorously develop alcohol sales in 2026 and significantly increase display and sales in stores; as stores expand, alcohol sales are expected to rise sharply, with procurement scales growing accordingly. However, in reality, this appears more like targeted “blood transfusion” to Songhe.

In addition to procurement cooperation, Yang Mingchao has also invested heavily to support Songhe.

He revealed at Songhe’s 2025 press conference that Guoquan Industrial had invested 180 million yuan in supporting Songhe’s operations over the past 16 months.