Restart expansion, Baiguoyuan (02411) may see a turning point in performance in 2026?

It was learned that on March 26th, Bai Guo Yuan (02411) released its 2025 performance, achieving revenue of 8.174 billion yuan, gross profit of 597 million yuan, and a net loss of 317 million yuan for shareholders, narrowing by 17.8% year-on-year, and its profitability has improved. Looking at the first and second half of the year, the performance in the second half of the year was outstanding, with gross profit of 380 million yuan, representing an increase of 161.7% year-on-year and 77.1% quarter-on-quarter. The performance this time was attributed to the contribution in the second half of the year. The company continued to optimize its store network and improve store operations quality. After proactively optimizing the store network for the past two years, it has returned to a sustainable store expansion strategy, adding 82 stores in the second half of the year, thus significantly improving profitability. As of December 2025, the company's offline store network had a total of 4,468 stores, including 4,460 franchise stores and 8 self-owned stores, located in more than 170 cities in 22 provinces and municipalities in China. Bai Guo Yuan's main sources of income are twofold. One is from the C end, mainly through offline franchise and self-operated store sales, and the other is from the B end, through direct sales wholesale model to distributors. Its income structure shows a trend of diversification, with franchise stores, self-operated stores, regional agents, direct sales, and online channels contributing 72.3%, 0.3%, 10.5%, 14.6%, and 0.7% of the revenue in 2025, respectively. Driven by "C end + B end" dual engines, the company's performance resilience is evident. The C end continuously optimizes store layout and product innovation. In 2024, it completed store facelifts for all stores to standardize Bai Guo Yuan's brand and IP image. In the first half of 2025, it continued to actively optimize stores and guide franchisees to evaluate store openings for cost reduction and efficiency enhancement. In the second half of the year, store operations efficiency significantly improved, with performance indicators basically reversing, initiating an expansion strategy. By December 2025, it operated 4,460 franchise stores and 8 self-owned stores. In terms of specific measures, the company focused on both store and product optimization. For example, it conducted more than 50 themed store renovations, including the Spring Festival-themed store and the Thailand Fruit Festival-themed store. On the product side, it promoted a combination of "high-traffic attributes of major products" and "extreme value-for-money seasonal products," as well as the "Good Fruit Repayment" activity. It also upgraded the gift business from multiple dimensions such as products, standards, services, to continuously enrich the product matrix. The gift business was favored by consumers, with gift sales accounting for 14% in 2025. Furthermore, the company developed an Online Merge Offline (OMO) model, acquiring traffic from multiple channels and implementing fan economy into the business. In 2025, orders placed through its self-operated APP and Mini Program, Meituan, and Eleme and other online channels accounted for around 26.6% of total orders, with Meituan orders accounting for about 51.4%. The Douyin channel performed exceptionally well, with a 21.6% increase in order volume, retail sales reaching 107 million yuan, a year-on-year increase of 30.9%. By the end of 2025, Bai Guo Yuan's accumulated members in all distribution channels exceeded 95.3 million, a year-on-year increase of 5.0%. The cumulative user visits to its WeChat Mini Program reached 81.96 million, a year-on-year increase of about 8.3%. The total number of WeChat groups in stores increased to about 32,000, with a total of about 16.9 million fans, of which sales through WeChat community chain exceeded 1.16 billion yuan, a year-on-year increase of about 14%. For the B-end, the company expanded its channels, innovated service models, and enhanced core competitiveness in the TO B business through in-store, home, and gift modes, while fully opening the supply chain, continually expanding high-quality customers, and building an efficient and collaborative supply chain system through category brand strategy. In 2025, the company's TO B direct sales totalled 1.191 billion yuan, maintaining relative stability, accounting for 10.32% of total sales (retail + direct sales), a year-on-year increase of 1.33 percentage points. Under the multi-channel expansion, domestic direct sales recorded contrary growth, accounting for 81.37% of direct sales, while overseas direct sales mainly sold quality local products to supermarkets and wholesalers in regions and countries such as Hong Kong, Singapore, Indonesia, and Thailand, with overseas direct sales accounting for 18.63% of direct sales. Building a technological foundation, optimistic about the company's long-term growth In fact, Bai Guo Yuan's competitive advantages are very obvious. As China's largest fruit retail operator, which has been the best-selling fruit for ten consecutive years, the company focused on the C-end and B-end during the industry adjustment cycle, firmly implementing the core strategy of "high-quality and cost-effective fruit expert and leader". It established three major business groups: retail, 2B, and category, and implemented multidimensional measures to promote store optimization and efficiency improvement. At the same time, the company closely follows the AI trend, upgrades intelligent systems around the retail core, builds a technological base, empowers business growth and operational efficiency improvement. The company newly launched the fruit knowledge big model, and in 2025, AI intelligent ordering covered 3,010 stores, introducing an AI store operation diagnosis system providing over 200,000 AI precise data diagnostics for stores annually. In summary, Bai Guo Yuan's "B-end + C-end" dual-driven approach has seen the C-end shift from contracting to expanding cycles. With product and store innovations and the Wuxi Online Offline Communication Information Technology Co., Ltd. integrated mode, the C end performance showed a significant turning point in the second half of the year, while the B end performance remains relatively resilient through multi-channel expansion and supply chain control. The overseas market is also accelerating. The company has established three major business groups, continuously innovates, improves the product and service structure of B + C end, and promotes the company's high-quality development. Bai Guo Yuan actively rewards shareholders, even during industry adjustment cycles, by maintaining dividends every year since 2022. According to data from Eastern Choice, the company accumulated dividends of 2.35 billion yuan over four years. The company is currently in a strategic adjustment period, actively promoting strategic upgrades to empower long-term growth, gradually recovering same-store growth, and increasing store expansion pace. It is optimistic about the company's long-term growth prospects, and valuation is expected to be reshaped.