The number of Guoquan Shihui stores has grown nearly sixfold in less than four years.
During the National Day holiday, on October 4, Guoquan Shihui (شنغهاي) Co., المحدودة. updated its prospectus, continuing its process of listing on the main board of the Hong Kong Stock Exchange.
According to the updated prospectus, Guoquan Shihui has only six directly-operated stores, with the rest being franchise stores. The number of franchise stores increased from 1,441 at the beginning of 2020 ل 9,216 by the end of 2022, and as of September 26, 2023, the number of Guoquan Shihui stores further increased to 9,978.
Store expansion over the past three years has directly driven its performance growth.
For the years 2020, 2021, 2022, and the four months ending April 30, 2023, Guoquan Shihui’s revenue was 2.965 billion yuan, 3.958 billion yuan, 7.174 billion yuan, and 2.078 billion yuan, على التوالى. The company also achieved profitability in 2022, with a net profit of 240 مليون يوان, and net profit for the first four months of 2023 reaching 120 مليون يوان.
Guoquan Shihui is often referred to as a low-cost version of “Hema Hotpot” and “Shuhai.” It was established in Zhengzhou in 2015, positioned as a one-stop “new retail chain supermarket for hotpot and barbecue ingredients,” primarily selling hotpot and barbecue ingredients, including frozen products, fresh food, وجبات خفيفة, base ingredients, dipping sauces, seasonal drinks, and hotpot and barbecue utensils.
From an expansion model perspective, Guoquan Shihui adopts a franchise model, signing franchise agreements with franchisees, selling self-branded products to them, and providing store operation management strategies without charging franchise fees. Guoquan Shihui’s income mainly comes from product sales to franchisees.
According to Frost & Sullivan data, based on retail sales of home dining products in 2022, Guoquan ranked first among all retailers in China, with a market share of 3.0%. بالإضافة إلى ذلك, based on 2022 retail sales, Guoquan is the largest home hotpot and barbecue brand in China.
The business model of hotpot supermarkets is tailored for home scenarios. Besides the “hotpot” category, Guoquan Shihui is also expanding into other areas, such as barbecue, which shares similar social attributes and dining scenes.
The updated prospectus shows that Guoquan Shihui is building a second growth curve around the barbecue scene.
The prospectus indicates that as of April 30, 2023, Guoquan Shihui’s revenue from hotpot products, barbecue products, and others was 1.518 billion yuan, 249 مليون يوان, and 263 مليون يوان, على التوالى, المحاسبة ل 74.8%, 12.3%, and 12.9% of total revenue.
Compared to the past few years, the revenue proportion from hotpot products is decreasing, while the share of barbecue products and other ingredients is increasing. From 2020 ل 2022, the revenue proportion from hotpot products was 81.9%, 79.7%, and 75.8%, على التوالى.
Besides meeting the demand for “eating hotpot/barbecue at home,” Guoquan Shihui also benefits from its layout in lower-tier markets.
According to the latest prospectus, as of September 26, 2023, the number of Guoquan Shihui stores increased to 9,978. The distribution includes 703 stores in municipalities, 2,117 stores in provincial capitals, 2,820 stores in prefecture-level cities, 2,667 stores in county-level cities, and 1,671 stores in towns—these three categories account for 70% of all Guoquan Shihui stores.
In lower-tier markets, farmers’ markets naturally dominate short-shelf-life products and supermarkets primarily handle frozen foods. لكن, Guoquan Shihui penetrates these markets more flexibly by opening community stores through franchisees, filling the gap left by supermarket frozen food near communities.
To further scale its network in lower-tier markets, Guoquan Shihui needs to streamline its supply chain.
According to the updated prospectus, besides collaborating with 266 ingredient suppliers such as Anjoy and Sanquan, as of April 30, 2023, Guoquan Shihui also owns three ingredient production plants: “Heyi Factory” for beef products, “Wanlaiwanqu Factory” for meatballs, and “Chengming Factory” for hotpot base ingredients. It has also invested in “Daixiaji” for shrimp paste production.
بالإضافة إلى ذلك, Guoquan Shihui has built 17 central warehouses and over 1,000 frozen forward warehouses nationwide, coupled with Huading Cold Chain, to facilitate next-day delivery to township-level stores. According to the prospectus, one of the main uses of IPO proceeds will be to enhance supply chain capabilities by increasing upstream production capacity and efficiency.
With a maturing franchise model, supply chain foundation, and product matrix supporting its scale of nearly 10,000 stores, Guoquan Shihui’s future focus may shift to product research and innovation, seeking more growth opportunities in the existing market and adding more certainty to its post-listing performance development.
