Guohai Securities Initiates Coverage on Auntea Jenny with 'Buy' Rating, Citing Expansion in Lower-Tier Cities

Financial Highlights for H1 2026

Guohai Securities has released a research report on Shanghai Aunt (02589), covering the company's first-half 2026 performance:

• Revenue: RMB 2.589 billion, up 42.4% year-on-year
• Net profit attributable to shareholders: RMB 321 million, up 58.3% year-on-year
• Adjusted net profit: RMB 345 million, up 41.6% year-on-year
• Adjusted net profit margin: 13.33%, broadly stable year-on-year

Store Expansion and Market Penetration

As of the end of H1 2026, the company operated a total of 13,155 stores globally, representing a 39.4% increase year-on-year. This includes:

• 13,120 franchised stores
• 35 directly operated stores

During H1 2026, the company opened 2,253 new franchised stores and closed 556, resulting in a net increase of 1,697 stores. The number of franchisees reached 8,014, up 40.4% year-on-year.

Notably, stores in third-tier and below cities totaled 7,022, accounting for 53.4% of all stores, an increase of 2.3 percentage points year-on-year.

The rapid expansion in store count drove growth in the franchising business:

• Revenue from sales of goods to franchisees: RMB 2.083 billion, up 41.6% year-on-year
• Franchising service revenue: RMB 397 million, up 40.3% year-on-year

Profitability and Cost Structure

The company's gross margin for H1 2026 stood at 31.6%, up 0.2 percentage points year-on-year.

Cost structure showed divergent trends:

• Sales and marketing expense ratio: 11.3%, up 1.0 percentage point year-on-year, primarily due to increased investment in brand building and market promotion, as well as higher employee costs from business expansion
• Administrative expense ratio: 3.7%, down 1.4 percentage points year-on-year
• R&D expense ratio: 1.3%, down 0.1 percentage point year-on-year

Net profit margin attributable to shareholders was 12.4%, up approximately 1.2 percentage points year-on-year, while the adjusted net profit margin was 13.3%, broadly flat year-on-year.

Product Innovation and Membership Growth

In H1 2026, the company launched 142 new products under its "Daily Health+" initiative. Key developments include:

• Continued enrichment of the fruit and vegetable tea series
• Accelerated product iteration of the kale series
• Introduction of new coffee offerings such as Amber Caramel Macchiato and Four-Coconut Macchiato, supported by the gradual rollout of coffee machines

On the membership front, as of the end of June:

• WeChat mini-program registered members reached 170 million, an increase of 38.6 million year-on-year
• Average quarterly active members stood at 16.3 million, up 0.5 million year-on-year
• Quarterly repurchase rate reached 42.3%, up 1.7 percentage points year-on-year

Earnings Forecast and Rating

Guohai Securities forecasts the following for 2026–2028:

| Year | Revenue (RMB) | Adjusted Net Profit (RMB) | Adjusted P/E Ratio | |------|---------------|---------------------------|---------------------| | 2026 | 5.41 billion | 680 million | 9.2x | | 2027 | 6.15 billion | 770 million | 8.1x | | 2028 | 6.77 billion | 850 million | 7.3x |

The brokerage notes that the company's core brand is expanding steadily, with product innovation and membership operations continuing to support per-store performance. The expansion of the franchise network and economies of scale in the supply chain are expected to drive sustained revenue and profit growth. Guohai Securities initiates coverage with a "Buy" rating.

Risk Factors

• Store expansion progress falling short of expectations
• Same-store sales performance below expectations
• Intensified industry competition
• Rising raw material prices
• Food safety risks