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Investing.com - HSBC has initiated coverage on Fujian Wanchen Biotechnology Group (SZ:300972) with a Buy rating and a price target of RMB204.30.
The research firm expects Wanchen to launch 7,500 new stores over the next three years through its franchise model, which has been a key driver of the company’s revenue growth over the past two years.
HSBC projects a 95% net profit compound annual growth rate (CAGR) for Wanchen between 2024 and 2027, alongside a 32% revenue CAGR during the same period, driven by franchisee store expansion and same-store sales growth.
The firm’s store expansion forecast includes 4,000 new locations in 2025, 2,000 in 2026, and 1,500 in 2027, while same-store sales are expected to improve through category expansion and distinctive product offerings.
HSBC also anticipates margin improvement for Wanchen, primarily through better operational efficiency from economies of scale and increased contribution from the company’s self-owned brands and private labels.
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