Mingming Busy: Careful on category expansion. Can niche snacks win?

On the evening of Mar 31 (Beijing time), $BUSYMING(1768.HK) released its 2H25 results. As this was the first annual report since listing, expectations were light, and the prints looked broadly fine to us.$BUSYMING(01768.HK)

Key takeaways:

1) Revenue modestly beat. Driven by rapid store expansion, 2H25 revenue reached RMB 38.1bn, up 57% YoY, clearly ahead of the market. This was almost the full-year 2024 level, underscoring that the company remains in a high-growth phase.

2) Store count topped 20k. On rollout pace, net adds were 5,165 in 2H25, a clear acceleration vs. 1H, taking the total store base past 20,000.

Dolphin Research expects that, as the Zhao Yiming Snacks and Snacks Busy teams were more deeply integrated and the supply chain and operating systems were connected, franchisee appeal improved. These changes likely enhanced partner confidence and willingness to open stores.

By mix, with high penetration already achieved in lower-tier cities and counties, new stores in 2H skewed to Tier-1 and New Tier-1 cities, with the share up 1.4ppt to 19%.

3) Same-store declines narrowed vs. 1H. Although the company did not disclose exact figures, channel checks suggest 2H same-store sales saw a low single-digit decline, improving from a double-digit drop in 1H.

By volume/price, with near-term over-density from rapid network build, we infer that lower ticket size was the key drag on same-store trends.

4) GMV grew rapidly. 2H25 GMV (store net takings ex user discounts and returns) was RMB 52.5bn, +56% YoY. High net new store adds were the main driver.

4) GPM moved into double digits. With greater purchasing scale strengthening upstream bargaining power, and a larger mix of own-brand SKUs in 2H, GPM expanded by 190bps to 10.2%.

5) Operating leverage unlocked profitability. On selling expenses, as competition eased, the company reduced defensive promo subsidies and franchise marketing incentives, and with private-domain membership growing, reliance on paid external traffic fell; selling expense ratio decreased by 50bps to 3.6%. G&A rose temporarily due to one-off IPO-related professional fees, and core OPM reached a record 5.2% in 2H (5.3% ex IPO fees).

6) Financial snapshot:

Dolphin Research view:

Looking solely at 2H25, we view growth quality as solid. While store openings accelerated, the same-store decline narrowed, and more importantly, profitability improved with GPM expansion, easing prior market concerns.

From here, for a high-growth company like this, the key question is the durability of growth. Sustainability matters more than the near-term beat.

On store expansion, Dolphin Research previously modeled in From 10k Stores to 10k SKUs: Opportunity or Trap? that an optimistic upper bound is ~35k stores.

From a rollout perspective, the current base has reached ~22k, and competition for rents and locations is far tougher in higher-tier cities than in counties, with longer timelines from site acquisition to property coordination. This suggests a high likelihood that store growth will slow starting in 2026.

On same-store growth, for both franchisees and brands, the medium-term SSS outlook hinges on how far the format can evolve from a 'snack shop' to a 'community discount grocer'.

Based on our latest checks, early results for new low-turn categories such as personal care and staples are not ideal, so category expansion will likely focus on fresh and short-shelf-life items. Purchase frequency per store may rise, but a step-change will be challenging.

The positive is that disciplined category expansion helps manage inventory turns and protects margins. In snacks, margin control is as important as scale, reflecting competitiveness, supply-chain control, and merchandising capability.

With guidance for 5,000 new stores in 2026, this implies about 22% store growth. Adding traffic and order uplift from fresh and short-shelf-life categories, and with weaker rivals post-integration, margin control should remain favorable.

We see room for after-tax core OP to reach RMB 3.3bn in 2026, implying ~22x PE and ~25% EPS CAGR over the next four years. Both on PE and DCF, we estimate 15%–30% upside.

Detailed read-through of the results:

I. Headline performance: revenue modestly beat

Helped by rapid openings, 2H25 revenue was RMB 38.1bn (+57% YoY), modestly ahead of market estimates (RMB 36.8bn). This was close to full-year 2024 revenue, indicating the company remains in a high-growth phase.

For the full year, revenue reached RMB 66.2bn, +68% YoY. The growth trend decelerated vs. the 100%+ pace in the prior two years.

II. Store rollout accelerated in 2H

Net adds were 5,165 in 2H25, a clear pickup vs. 1H, taking the store base past 20k.

One factor, in our view, is that the company modestly loosened franchise policies in 2H25 to sprint ahead of the 2026 listing. This likely pulled forward some openings.

In addition, as the Zhao Yiming Snacks and Snacks Busy teams integrated more deeply and the supply chain and operating systems were connected, franchisee appeal improved (in 2024, soon after the merger, management integration and systems alignment were still in progress).

By mix, given already high penetration in lower-tier cities and counties, new stores in 2H were concentrated in Tier-1 and New Tier-1 cities, with the share up 1.4ppt to 19%—a classic 'countryside encircling the city' path.

III. Same-store declines narrowed vs. 1H

Total GMV reached RMB 52.5bn in 2H25, +56% YoY. On merchandise revenue/GMV, the take rate rose to 71.9% in 2H, broadly flat YoY with limited change.

On SSS, although the company did not disclose specifics, channel checks indicate a low single-digit decline in 2H, narrowing from a double-digit decline in 1H. The trend improved sequentially.

By volume and price, near-term over-density from rapid store clustering likely diluted ticket size, which we believe was the core drag on SSS.

IV. GPM moved into double digits

With larger procurement scale strengthening bargaining power upstream, and with the own-brand SKU mix increased materially in 2H, GPM expanded by 190bps to 10.2%.

V. Operating leverage boosted profitability

On selling expenses, as industry competition eased, the company reduced defensive promo subsidies and franchise marketing incentives, taking the selling expense ratio down by 50bps to 3.6%.

G&A rose due to one-off IPO-related professional fees, and core OPM hit a fresh high of 5.2% in 2H (5.3% ex IPO fees). Profitability trends remain on an improving track.

Excluding

Longbridge Dolphin Research on '鸣鸣很忙' (history):

Deep dives

Dec 5, 2025: 'Snack Sector’s PDD: What Powers the Model?'

Dec 24, 2025: 'From 10k Stores to 10k SKUs: Opportunity or Trap?'

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