Wanchen Group further strengthens control over its core brand.

On the evening of August 11, Wanchen Group announced plans to acquire a 49% stake in Nanjing Wanyou Commercial Management Co., Ltd. (referred to as "Nanjing Wanyou") from the brand's founder and minority shareholders for RMB 1.379 billion in cash.

Nanjing Wanyou is the operating entity of Wanchen's core brand "Laiyoupin." As of the end of May, it managed 3,212 directly operated and franchised stores, covering provinces such as Anhui, Henan, Hebei, and Inner Mongolia.

As one of the core brands under Wanchen Group, Laiyoupin achieved revenue of RMB 7.712 billion in 2024, with a net profit of RMB 246 million.

The launch of "Laiyoupin Savings Supermarket" at the beginning of the year marked the company's exploration of a full-category discount supermarket. From January to May this year, the company achieved revenue of RMB 4.1 billion, with a slight improvement in profitability compared to 2024.

After the completion of this transaction, the listed company’s shareholding in Nanjing Wanyou will significantly increase from 26.01% to 75.01%.

According to performance commitments, Nanjing Wanyou's net profit for 2025-2027 will not be less than RMB 320 million, RMB 330 million, and RMB 350 million, respectively. Based on this, the transaction is expected to contribute at least RMB 150 million in net profit to the listed company each year.

This transaction will also deepen the binding relationship with the core management team through equity binding.

Laiyoupin's founder Zhou Peng will receive 9.89 million shares (accounting for 5.27% of the share capital) transferred from the controlling shareholder of the listed company, Wang Zeneng, and others.

After the transfer of the target shares, Zhou Peng and his spouse Li Xiaoyu plan to entrust the voting rights of their 12.29 million shares (accounting for 6.55% of the total share capital) to Wang Zeneng to strengthen the stability of control.

Another founder of Laiyoupin, Yang Jun, who is also the deputy general manager of Wanchen Group, has committed to increasing his shareholding in the company within the next 12 months with no less than the funds obtained from the transaction.

The current equity structure is a historical legacy of Wanchen's early acquisition strategy.

Since entering the bulk snack market in 2022, Wanchen Group has leveraged a joint venture holding mechanism to integrate leading brands with limited capital, quickly becoming an industry oligarch in just two years.

For the acquired brands, the company adopts a unified management structure: a joint venture company established and held by Wanchen Group with over 51% shareholding serves as the integration platform; then, through this joint venture, an operating entity is formed with the brand founding team, creating a 51%/49% equity structure.

In actual operations, the original team is retained to manage daily operations, while the group provides support in supply chain, digitalization, and store expansion. Once the business stabilizes, the shareholding ratio is increased by acquiring minority stakes in the joint venture to strengthen profit consolidation and control.

In March of this year, "Haoxianglai Brand Snacks" announced that the number of signed stores exceeded 15,000, more than tripling compared to the initial merger of the four brands: "Luxiaochan, Haoxianglai, Yadiyadi, and Laiyoupin."

Even with asset-light expansion, there are still costs and pressures involved.

From 2022 to the end of 2024, Wanchen Group's asset-liability ratio rose from 43.46% to 79.85%.

This year, benefiting from the expansion of revenue scale, the company's asset-liability ratio had decreased.

However, the loan financing involved in this transaction may once again raise Wanchen Group's financial costs and profit pressures The "Review Report" issued by ZhongShen ZhongHuan predicts that after the transaction, the company's asset-liability ratio will rise from 67.57% to 90.97% from January to May this year.

However, Wanchen Group stated that the increase in the asset-liability ratio is mainly due to accounting treatment, and the target company's profitability is relatively strong, expecting that the debt ratio will gradually decrease after the transaction is completed.

As the scale of stores in the mass snack industry gradually reaches its peak, if the company's revenue growth slows down coupled with increased merger interest expenses, the net capital accumulation rate may slow down, while the asset valuation of the target company continues to rise.

In August last year, when Wanchen Group acquired a 49% stake in the operating entity of "Hao Xiang Lai," the transaction amount was less than 300 million yuan.

Currently, in the Wanchen Group's portfolio, the listed company has not yet achieved full control over the two brands "Lao Po Da Ren" and "Ya Di Ya Di."