Sinolink: Maintains a "buy" rating for MXBC (02097), with a key focus on pricing and supply chain construction.

Sinolink released a research report stating that MEXICAN welcomes accelerated overseas expansion, with the first MEXICAN store in the US starting preparations in mid-September, with the location being Manhattan, New York, and the first store in Brazil starting preparations, with the location being a shopping center in So Paulo. In April this year, MEXICAN opened its first store in Central Asia in Almaty, and in August, its coffee brand "Lucky Coffee" opened its first overseas store in Malaysia. The company maintains a "hold" rating, taking into consideration the impact of this year's delivery subsidies and the accelerated overseas business in the next two years, and it is estimated that the company's net profit attributable to shareholders for FY2025/FY2026/FY2027 will be 5.982/6.600/7.295 billion yuan respectively. Sinolink's main points are as follows: \- MEXICAN is beginning to enter regions outside of Southeast Asia, with locations in the core commercial areas of the local districts. \- The store that MEXICAN is preparing to open in So Paulo will be located in the Shopping Cidade So Paulo shopping center on Avenida Paulista in the city center, in the prime location of So Paulo. The store that is being prepared in New York will be at the intersection of Chinatown and the SoHo district, not only radiating the Chinese community in New York but also being a popular area for tourists and locals to spend their weekends. \- Opening experimental stores in various regions will help confirm the priority and difficulty of the overseas markets. \- Different from the strategy of focusing on Southeast Asia in previous years, MEXICAN's overseas expansion strategy has undergone a new change, starting to expand simultaneously in Central Asia, North America, and South America. Sinolink believes that the fundamental reason for this change is that the differences in culture, population, and income levels in different regions lead to differences in the difficulty and ceiling of developing milk tea businesses in different regions. Through experimental store openings, the priority and difficulty of overseas markets can be better confirmed, while also building a business model suitable for different regions. \- The lack of mature milk tea supply in multiple regions overseas provides significant growth space for MEXICAN. \- Central Asia, North America, and South America are all mature coffee consumption regions, where outdoor instant beverage consumption habits are already mature, but they are mainly supplied by chain coffee shops and lack milk tea category supply. These regions have a young population that is growing rapidly, with a strong and significant demand for milk tea, providing a vast space for MEXICAN's overseas expansion. \- Core attention to pricing and supply chain construction, determining the release of overseas expansion profit potential. \- The potential for future profit release from overseas expansion, how big it is, and how fast it is, core attention should be on 2 major factors: pricing determines the profitability level and price competitiveness of a single cup, while supply chain construction determines the speed of store expansion and profit release. Risk warning: \- Risk of intensified industry competition; risk of restaurant consumption falling short of expectations; risk of subsidy reduction in delivery; food safety risks; risk of stores not meeting expectations.