The leading discount snack retailer is entering a cycle of profit realization. On the evening of March 17, Fujian Wanchen Food Group Co.,Ltd. disclosed its 2025 annual report, revealing full-year operating revenue of 51.459 billion yuan, a year-on-year increase of 59.17%. Excluding share-based payment expenses, the core net profit margin for its discount snack business reached 4.98%, nearly doubling compared to 2024. The significant improvement in profitability is primarily attributed to its procurement system of "direct sourcing from manufacturers + centralized negotiation," which continuously compresses cost margins. In 2025, the gross profit margin for Wanchen's discount snack business was 12.32%, an increase of 1.46 percentage points year-on-year. While the pace of Wanchen's store expansion has slowed slightly compared to previous periods, it continues to advance intensively, even as the combined store count of leading players approaches 40,000 nationwide. As of the end of 2025, the company's total number of operating stores reached 18,314, with a net increase of 4,118 stores during the reporting period. Regionally, new store additions primarily came from continued densification in its core East China market. Simultaneously, penetration speeds significantly accelerated in the Northwest, Southwest, and Northeast markets, where store counts each surpassed one thousand, with growth rates exceeding 50%. Store expansion has further strengthened the company's bargaining power within the industrial chain. By the end of 2025, the balance of accounts payable for Fujian Wanchen Food Group Co.,Ltd. reached 3.075 billion yuan, a year-on-year increase of 52.85%. The cash flow statement indicated that the "increase in operating payables" contributed 1.437 billion yuan in cash inflow, highlighting the working capital advantage enjoyed by the leading supply chain. Although the theoretical potential for national store expansion remains substantial, competition has intensified to a fever pitch in some regions. Against this backdrop, Wanchen has begun piloting new store formats such as "Hao Xiang Lai Savings Supermarket" and "Quan Shi You Xuan." These formats introduce high-frequency, essential categories like fresh fruits, freshly baked goods, frozen foods, and personal care products on top of the snack assortment, aiming to replicate the traffic and supply chain capabilities from the snack sector into the broader community retail scene. A surge in R&D expenses underscores the company's intent to drive efficiency through digitalization. In 2025, R&D investment soared by 788.28% year-on-year to 35 million yuan, primarily allocated to digital operation systems, AI-assisted decision-making, smart logistics, and warehouse management platforms, aiming to enhance precision scheduling and inventory turnover capabilities. On the capital operations front, Fujian Wanchen Food Group Co.,Ltd. acquired a 49% equity stake in its core subsidiary, Nanjing Wanyou (the operating entity of Lai You Pin), for 1.379 billion yuan in cash during the year. Post-transaction, the group's ownership stake increased to 75.01%. In 2025, Nanjing Wanyou achieved an adjusted net profit of 522 million yuan, exceeding the performance commitment of 320 million yuan made at the time of the initial agreement. Although large-scale acquisitions and related loans pushed up long-term borrowing, the efficient generation of operating cash flow led to a counter-trend decrease in Fujian Wanchen Food Group Co.,Ltd.'s asset-liability ratio, which dropped from 79.85% at the end of 2024 to 74.61%. Market expectations regarding Wanchen's dividend distribution capability are also quietly rising. In the annual report, Fujian Wanchen Food Group Co.,Ltd. explicitly outlined a mid-term dividend arrangement for 2026, with the cash dividend payout ratio potentially reaching up to 50% of the net profit attributable to the parent company's shareholders for the period. Following a period of high-intensity capital expenditure, Wanchen may be transitioning towards a phase of high-quality development that balances scale expansion with shareholder returns, aiming to bolster the confidence of long-term investors by increasing its cash dividend payout ratio.
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