From the value burst of the "sinking market", see what Mengxue Ice City (02097) and HUITONGDA NET (09878) did right.

The sale of Mixue Group (02097) officially ended on February 26th, with the subscription multiple reaching 5125 times and the subscription amount exceeding 1.77 trillion Hong Kong dollars, surpassing Kuaishou's 1.26 trillion Hong Kong dollars in 2021, setting a new record in the Hong Kong stock market and becoming a phenomenon-level IPO. Some analysts pointed out that Mixue Ice City is highly favored by the market because of the development potential of China's sinking market, as well as its layout and expansion of stores in third-tier and below cities, counties, and towns. According to Sullivan's report, by the end of 2025, the total retail sales of consumer goods in China's sinking market is expected to exceed 25 trillion yuan; McKinsey's report indicates that by 2030, 66% of China's personal consumption growth will come from third-tier and below cities. Combined with further policy guidance on "expanding domestic demand" and "smooth circulation of urban and rural economies," it can be seen that third- and fourth-tier markets are no longer "supplementary markets," but the core DRIVE of China's future consumption growth, and county and town markets will also become the "new blue ocean" focused on by industries and capital. Similarly, HUITONGDA NET (09878), which has also been focusing on the sinking market for many years, has recently been rumored with good news. Like Mixue Ice City, HUITONGDA NET has been focusing on serving rural husband-and-wife shops through supply chain products and digital technology services since 2012, covering 21 provinces in China and 246,000 member stores. Sullivan's report shows that China has nearly 4.7 million "rural husband-and-wife shops," and HUITONGDA NET currently serves more than 20,000 of them, making it the largest in the domestic to b service industry. The growth potential is huge. In addition to "exploring the sinking blue ocean," it is also observed that Mixue Ice City and HUITONGDA NET share another value level - deep cultivation of the supply chain. As the world's largest chain restaurant brand, Mixue Ice City has built a comprehensive end-to-end supply chain system of relatively large scale in the fresh beverage industry in China, covering core components such as procurement, production, logistics, research and development, and quality control, and has become the company with the most comprehensive and largest scale of product categories in the fresh beverage supply chain field in China. HUITONGDA NET started with household appliances and consumer electronics, expanded to alcoholic beverages, agricultural production materials, daily necessities, and fast-moving consumer goods, among other industries and categories, and built an integrated trading service platform for Wuxi Online Offline Communication Information Technology Co., Ltd., connecting more than 12,000 upstream supply chain partners and more than 2,000 brand factories, and attracting a variety of "big-name" brands including Apple to establish deep cooperation to jointly build retail outlets in the sinking market. Recently, HUITONGDA NET has continued to announce new strategies and achievements in the supply chain area and has laid out innovative supply chain models such as "penetrating" upstream factories through various forms, and deploying "production and sales integration" to help factories reach the market terminal more efficiently and improve the efficiency of the entire industry chain. It is reported that this Friday, HUITONGDA NET will also hold a "Own Brand Cluster Strategy Release Conference" and announce the next stage of the supply chain strategy. It will also be followed closely. In addition to focusing on the "sinking market" and establishing "supply chain advantages," it is also noted that HUITONGDA NET's SaaS business has shown significant competitive advantages in the sinking market. Different from the traditional SaaS vendors' urban-centric models, the company has built a commercial digital base for the sinking market through a "scenario-based product matrix + localized service network." In 2023, the service business revenue reached 655 million yuan, with SaaS + member store numbers growing by 16% year-on-year to 132,000; paid SaaS + member store numbers grew by 61% year-on-year to 48,000; this growth rate is significantly higher than the industry average, confirming the deep penetration ability of its products in the sinking market. From a value perspective, compared with the Hong Kong stock SaaS sector, the industry average price-to-sales ratio (PS) is maintained in the range of 3-8 times, while the low PS valuation of HUITONGDA NET indicates significant room for value revaluation of the company's market value. It is worth noting that the company's operating cash flow has been consistently positive, in stark contrast to the "burning money for growth" model of most SaaS companies, providing solid support for valuation repair. According to public information, in recent years, HUITONGDA NET has continued to increase its innovation in technology and application areas: accessing mainstream large models such as DeepSeek, deploying applications such as "AI super store manager." The company has announced that its future SaaS business will also expand into the AlaaS direction, reshaping the efficiency and value of the retail stores and industrial chains in the sinking market, further aligning with the national strategy of rural revitalization. In conclusion, Mixue Ice City's strong performance in the Hong Kong stock market has led the market to re-examine the enormous potential of the sinking market, and as the "big brother" who has been deeply cultivating the industry for more than a decade, HUITONGDA NET has already gathered multiple advantages and is ready to unleash its potential. The practices of both sides in model positioning, supply chain, and innovative technology application have also provided a new template for industry development.