The interim report performance hits a new historical high, with a clear path for sustainable growth for DPC DASH (01405).

Recently, DPC DASH (01405) (referred to as the "Company" hereafter) announced its mid-term performance for 2025 (referred to as the "financial report" hereafter), delivering impressive results. The financial report shows that the company achieved record highs in several financial indicators in the first half of the year: revenue increased by 27% year-on-year to 2.593 billion yuan, maintaining double-digit growth for several years in a row; profits also steadily increased, with adjusted net profit reaching 91.42 million yuan, a significant increase of 79.6% year-on-year; attributable net profit reached 65.92 million yuan, a substantial increase of 504.4% year-on-year. The company's outstanding performance can be attributed to its long-standing implementation of the "4D strategy" high-quality store development, delicious pizza value, efficient delivery experience, and digital capabilities. By synergizing efforts in product, brand, and store operations, the company's differentiated competitive advantage is continuously strengthened. With the continuous expansion of the Western fast food market, the company is expected to maintain high-quality and sustainable growth momentum. Innovation combined with classics to create a high-quality and value-for-money delicious experience For food and beverage brands, "delicious" is the core competitive advantage, and DPC DASH clearly understands this. The company has long been committed to creating a high-quality and value-for-money delicious experience for consumers, capturing consumers' taste buds and hearts with excellent products. On one hand, the company has not raised menu prices for many years and has retained perennial popular items such as classic Italian meat sauce pizza, Sultan Durian Pizza, and American-style potato bacon pizza, allowing consumers to continually revisit classic flavors for repeat purchases. On the other hand, the company actively innovates in products by continuously introducing new options in crusts, ingredient combinations, and providing personalized customization choices. Through the company's own mini-program, consumers can freely add or subtract ingredients from their pizzas, easily creating personalized pizzas that suit their tastes. This highly customized model fully stimulates consumers' creativity. On platforms such as "Xiaohongshu," many users voluntarily share "hidden eating methods at DPC DASH" and "treasure ordering strategies." These popular posts have received over 10,000 likes, leading to the spontaneous spread of brand awareness and forming a positive interaction between the brand and consumers. Additionally, the company has always adhered to the positioning of "good and inexpensive, affordable," serving the mass market with its cost-effective route. It continues to launch various discount activities to reward consumers. In menu design, it clearly distinguishes between "value for money," "classic flavor," and "selected luxury" for different consumer needs. The company also regularly conducts various promotional activities on its official website in mainland China, allowing members to redeem their points for discounts, with the highest conversion rate of 10%. This helps users save more and eat more economically. Scale expansion + refined operation driving high-quality growth As the saying goes, "good wine needs no bush." If delicious, high-quality, and value-for-money products are the foundation of DPC DASH, then the balance between scale expansion and refined store management has become a crucial engine driving its sustainable growth. In recent years, DPC DASH has accelerated its store expansion. In the first half of this year, the company opened 1,198 new stores in mainland China and successfully entered 48 Shenzhen New Land Tool Planning & Architectural Design projects. The performance of new stores has been particularly outstanding, with the first store in Shenyang breaking Xiamen SM Phase III store's global annual sales record of 31 million yuan after being open for 198 days; the first store in Handan surpassed the sales record of 540,000 yuan on the opening day, setting a new record for Debonair global new store sales on the first day. Existing stores have maintained steady growth and new stores have contributed significantly to revenue growth, collectively driving a rapid increase in the company's overall scale. At the same time, in terms of brand operations, the company has always focused on a youthful and diverse strategy, continuously enhancing brand popularity and deepening brand value through various means such as cross-brand collaborations. Since last year, the company has actively explored cross-brand collaborations and launched joint activities with Tencent's "White Jing Corridor," Hello Kitty, and the popular game "Egg Party" to promote a spring-themed joint event. These partnerships aim to effectively link online game interactions with offline consumption scenarios, stimulating user participation and consumption desires. The company has also introduced six Snoopy "Sports Puppies" blind box series in collaboration with IP rights holders, further enhancing the brand's fun and trendy labels and strengthening emotional connections with young consumers. In terms of digital marketing, the company has been actively promoting on short video and live streaming platforms such as Douyin since last year, launching various promotional forms such as Douyin group-buying and live-exclusive deals, attracting a large number of potential customers and significantly increasing brand influence. The digital membership system has also become a key factor in increasing user stickiness. Members not only can use points to directly offset their expenses but also enjoy various benefits such as joining gifts and points draws. On social platforms such as "Xiaohongshu," users often share strategies for maximizing benefits, such as receiving pizza snack coupons for new members joining the "influencer club," having the opportunity to win free pizza coupons with 50 points, and playing mini-games to win discounts. This further enhances the brand's reputation for being delicious and affordable. As of the first half of this year, the company has accumulated 30.1 million members, an increase of 55.2% from the same period last year. The revenue contribution of members has increased from 63.6% to 66%, demonstrating a steady growth in the user base. Furthermore, the company upholds its commitment to "deliver within 30 minutes for takeout, with free pizza coupons for delayed delivery," establishing an efficient and punctual delivery service system with an overall on-time delivery rate of up to 94%. This efficient operation not only meets consumers' high demands for timeliness but also significantly improves customer satisfaction and trust. Leading the growth in the Western fast-food track and contributing new value through market expansion With the acceleration of life pace and the increasing diversification of consumer demand, street food is becoming more popular among young consumers due to its affordability, quick service, and wide variety. According to the China Catering Industry Research Institute's "2024 China Fast Food Industry Development Trend Report," as of Q2 2024, the scale of fast-food stores reached nearly 3.827 million, accounting for 48.0%, continuing to lead in the catering category. Against this backdrop, Western fast food has achieved rapid market expansion due to its rich product line and highly standardized operating model. The "Western Fast Food Category Development Report for 2025" released by the Red Catering Industry Research Institute indicates that the national market for Western fast food reached 297.5 billion yuan in 2024, a year-on-year increase of 11.0%, leading in growth rate among snack fast food sub-categories. As of March 2025, the number of Western fast-food stores nationwide has reached 325,000, a year-on-year increase of 6.6%, with the market size expected to maintain a growth rate of over 10% for the whole year. In addition to first-tier cities with higher consumer spending, the focus is shifting to lower-tier markets, which are becoming a new target for major food and beverage brands. According to Red Catering Big Data, as of March 2025, the proportion of stores in third-tier and below cities continues to increase, with third-tier cities, fourth-tier cities, and fifth-tier and below cities increasing by 1.6, 1.5, and 0.7 percentage points respectively compared to 2024. This trend indicates that Western fast-food brands are accelerating penetration into lower-tier markets. With the upgrading of consumption and the improvement of market education, consumers are shifting their focus from simply seeking "value for money" to emphasizing "quality and value for money." While they still pay attention to reasonable prices, they also value the stability of food quality and overall dining experience, seeking to ensure that every penny is well spent. In response to these new consumer trends, DPC DASH adheres to its brand positioning of "delicious, affordable, high-quality and value-for-money" and has developed a strategy of "going deep and wide" in store development, accelerating penetration into lower-tier cities to maintain healthy and rapid growth of its store network. Conclusion Overall, DPC DASH has built a solid core competitive barrier with its strong product power. By relying on the dual driving forces of scale expansion and refined store operation, the company continuously strengthens its high-quality growth momentum, gradually forming a virtuous cycle of sustainable growth. As a leading brand in the Western fast-food field with a solid foundation and clear strategy, DPC DASH has the potential for continuous growth and is worth long-term investor attention.