BUSYMING (01768) saw its share price rise more than 10% in afternoon trading. At the time of writing, the stock was up 8.84% to HK$361.8, with a turnover of HK$149 million.
The increase follows news that the two leading discount retail chains, BUSYMING and Wanchen Group, have initiated a new round of store opening subsidies in regions like Southwest and Northwest China.
Guosheng Securities noted that these subsidies are fundamentally different from the nationwide subsidies in 2024. The market landscape was unclear at that time, with fierce competition for regional dominance. The current subsidies are more targeted, focusing on specific strategies for individual stores in untapped markets. The overall impact is expected to be manageable, and the subsidies are likely to accelerate the national store expansion process, quickly filling gaps in the discount snack market.
Macquarie released a research report stating that recent market concerns about BUSYMING and its competitor Wanchen Group offering additional franchisee subsidies for new stores opened near rivals in some regions are overblown. According to the report, these concerns are excessive because the subsidy policies have strict application criteria and are more prudent than the situation in 2024. Macquarie's analysis suggests the impact of the subsidies is controllable.
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