ZhiKe | The "Snow Ice City of Snacks" is about to go public. Is Mingming Busy in the right place at the right time?

Author | Fan Liang

Editor | Ding Mao

In 2022, Wanchen Group, a company selling enoki mushrooms, entered the bulk snack market by establishing subsidiaries and gradually operated several snack store brands such as Luxiaocan and Haoxianglai.

In 2024, the revenue from Wanchen Group's bulk snack business reached 31.79 billion yuan, accounting for 98.3% of the total revenue. The completion of the business structure transformation drove the company's stock price to rise from 12.0 yuan per share at the end of 2022 to 164.3 yuan per share in April 2025, with a cumulative increase of over 12 times.

In recent years, bulk snack stores have become another phenomenon - level consumer format after milk tea shops, and the capital market also highly approves of this new consumer format. In addition to the sharp rise in Wanchen Group's stock price, the continuous upward trend of "new consumer" stocks such as Mixue Bingcheng, Pop Mart, and Laopu Gold in the Hong Kong stock market also confirms this view.

Against this background, another leading company in the bulk snack industry, Mingming Henmang, submitted a prospectus to the Hong Kong Stock Exchange in an attempt to share this capital feast. Mingming Henmang holds two snack store brands, Lingshi Henmang and Zhaoyiming Snacks. Its revenue scale and the number of stores are slightly ahead of Wanchen Group. It is well - known in the industry as "Wanchen in the north, Henmang in the south".

So, is the bulk snack store a good business? What kind of valuation can Mingming Henmang get?

Similar Business Model to Mixue Bingcheng

If only one word can be used to describe Mingming Henmang's business progress in recent years, that word can only be "fast".

In terms of revenue, Mingming Henmang's total revenue was 4.286 billion yuan in 2022 and reached 39.344 billion yuan in 2024, an increase of 8.14 times.

In terms of the number of stores, Mingming Henmang had 1,902 stores in 2022 and 14,394 stores in 2024, an increase of 6.57 times. Wanchen Group also showed a similar trend. The number of its snack stores was 4,726 at the end of 2023 and reached 14,196 in 2024.

The rapid growth of Mingming Henmang's stores to over ten thousand was partly due to the acquisition of 2,433 stores from Zhaoyiming through a share - swap deal in 2023. However, the underlying reason was the adoption of the franchise model for expansion. From 2022 to 2024, the number of Mingming Henmang's franchise stores was 1,898, 6,569, and 14,379 respectively, while the number of self - operated stores was only 4, 16, and 15 respectively. It can be seen that the company was quite cautious in expanding self - operated stores and was reluctant to be dragged into the heavy - asset model by store rent, staff costs, etc.

Chart: Changes in Mingming Henmang's Revenue and Number of Stores. Source: Prospectus, Compiled by 36Kr

Since Mingming Henmang mainly expands its stores through franchising, it is inevitable to discuss whether the company makes money from franchise fees or product sales. The prospectus shows that in 2024, the sales amount of products from Mingming Henmang to its franchise and self - operated stores was 39.151 billion yuan, accounting for 99.5%. The sales revenue including franchise fees and service fees was only 192 million yuan, accounting for 0.5%.

Therefore, Mingming Henmang's business model is similar to that of Mixue Bingcheng. Both make profits by selling products to franchise stores through the continuous operation of franchise stores rather than relying on franchise fees. In essence, the company is also a supply - chain management company. However, different from Mixue Bingcheng's full - scale shift to self - owned production capacity, Mingming Henmang is currently only in the stage of testing self - owned brands and laying out self - owned production capacity. Currently, it mainly supplies goods to franchisees through trade means.

Chart: Mingming Henmang's Revenue Structure. Source: Prospectus, Compiled by 36Kr

In terms of financial performance, Mingming Henmang's business model can be accurately summarized by three words: low gross profit, light assets, and high turnover.

From 2022 to 2024, Mingming Henmang's gross profit margins were 7.45%, 7.50%, and 7.62% respectively, maintaining a stable and low - level range. It was higher than the average gross profit margin of 5.66% of the Wind Trade Index and close to the median gross profit margin of 7.44%.

Due to Mingming Henmang's large sales scale and the fact that it does not bear store rent, it effectively dilutes the selling, general, and administrative expenses. In 2024, the company's selling expense ratio and management expense ratio were only 3.75% and 0.99% respectively. The low expense ratio also enabled the company to obtain a certain profit margin even with a low gross profit margin. From 2022 to 2024, Mingming Henmang's net profit margins were 1.67%, 2.11%, and 2.11% respectively, higher than the average of 1.14% and the median of 1.03% of the Wind Trade Index.

Chart: Mingming Henmang's Gross Profit Margin and Net Profit Margin. Source: Prospectus, Compiled by 36Kr

In terms of asset structure, in the upstream supply, since Mingming Henmang is in the initial exploration stage of self - owned snack brands, its sales products mainly rely on external procurement. In the downstream channels, Mingming Henmang mainly adopts the franchise model and does not bear high rent and labor costs. Therefore, it generally belongs to the light - asset operation model. The prospectus shows that as of 2024, Mingming Henmang's total assets were 10.168 billion yuan, of which fixed assets were only 158 million yuan, which is a typical light - asset characteristic.

However, there are also some flaws in Mingming Henmang's balance sheet. In 2023, the acquisition of Zhaoyiming through a share - swap deal generated 2.25 billion yuan in goodwill and 903 million yuan in trademark intangible assets, totaling 3.153 billion yuan, accounting for 31.01% of the total assets. However, judging from the company's current store - opening progress and revenue growth, the possibility of goodwill impairment for Mingming Henmang in the short term is very low.

In terms of turnover, in 2024, Mingming Henmang's inventory turnover days were only 11.42 days, and the accounts receivable turnover days were only 0.98 days. This means that the company basically settles sales payments immediately, and the efficiency of goods procurement and distribution is also extremely high. The company and its downstream stores do not need to stock up a large amount of goods.

According to the prospectus, Mingming Henmang's warehousing and logistics system can generally supply goods to stores within 24 hours. At the same time, Mingming Henmang pays advance payments to snack suppliers to ensure that it can get the goods in time. A series of operations have greatly improved Mingming Henmang's supply turnover ability, thus ensuring the richness and stability of goods in offline stores.

From a financial perspective, except for the relatively low gross profit margin, Mingming Henmang's other financial data are excellent.

How Does the Low Price Come About?

The snack industry mainly has four major retail channels: supermarkets, grocery stores, e - commerce, and snack specialty stores. According to historical data from Frost & Sullivan, from 2019 to 2024, the compound annual growth rate of the retail sales of the snack industry was 5.5%. Among them, the compound annual growth rate of the specialty store channel was 13.9%, the e - commerce channel was 9.6%, while the compound annual growth rate of the supermarket and grocery store channels was only about 4%.

An obvious trend is that although the overall snack industry is growing, the specialty store and e - commerce channels have captured a part of the incremental share of the supermarket and grocery store channels.

Chart: GMV of the Snack Industry (by Channel). Source: Prospectus, Compiled by 36Kr

From the perspective of consumers, the choice of snack purchase channels is mainly considered from three aspects: cost - effectiveness, product variety, and immediacy. As offline snack specialty stores, bulk snack stores themselves have the characteristics of rich product variety and high immediacy. Therefore, the key lies in analyzing how the cost - effectiveness of bulk snack stores is achieved.

Comparing three offline formats: supermarkets, grocery stores, and snack stores, the factors affecting the cost - effectiveness of snack retail mainly lie in the length of the sales chain from the production end to the retail end and the operating costs such as rent and sales of retailers.

Although the operating costs such as store rent and sales of the grocery store channel are relatively low, it often involves multi - level distribution and price increases at each level. Although some supermarket channels adopt direct procurement with large quantities in form and have a relatively short sales chain, under the pressure of operating costs such as rent and sales, they will charge additional service fees such as shelf fees. Therefore, the prices of snacks in these two channels are relatively high.

Bulk snack stores combine the low rent of grocery stores and the characteristics of direct procurement with large quantities and short sales chains of supermarkets. From snack production to sales to consumers, it only goes through a few links: snack producers - bulk snack brand owners (Mingming Henmang) - bulk snack franchise stores - consumers, without price increases by distributors at each level. At the same time, offline bulk snack stores make profits from product sales rather than charging various service fees such as shelf fees. Therefore, they can purchase snacks from producers at low prices and sell them.

In 2024, Mingming Henmang's snack business revenue reached 39.151 billion yuan, and the offline retail sales reached 55.531 billion yuan. This retail sales figure is even close to the total revenue of the comprehensive retailer Gaoxin Retail. Therefore, Mingming Henmang's large - scale procurement ability gives it relatively high bargaining power with snack producers.

Take Liuliu Orchard, which recently submitted a prospectus, as an example. After significantly increasing its sales to bulk snack stores such as Mingming Henmang and Wanchen Group, the gross profit margin of its retailer channel decreased from 48.2% in 2022 to 36.3%. The gross profit margin of Qiaqia Foods' direct - sales channel (including supermarkets and snack stores) decreased from 29.33% in 2023 to 25.01% in 2024.

In addition to large - scale procurement, factors such as fast payment cycles also enable bulk snack stores like Mingming Henmang to obtain price discounts from snack producers.

The prospectus shows that in 2024, Mingming Henmang's accounts payable was 1.495 billion yuan, and the turnover days were only 10.5 days. At the same time, Mingming Henmang also had 1.639 billion yuan in advance payments to suppliers on its books, which means that it basically settles procurement payments to suppliers immediately. According to the Shenwan Food and Beverage Index, the average payment collection cycle in the industry is about 2 months. Therefore, Mingming Henmang's fast payment method is undoubtedly very attractive to snack producers.

The snack products that Mingming Henmang purchases at low prices are also sold to offline franchise stores at a very low markup rate. For example, its gross profit margin has been around 7.5% for many years, which is a proof. In the store sales link, if GMV is regarded as the store's revenue and Mingming Henmang's business revenue is regarded as the store's operating cost, then the average gross profit margin is about 29.50% according to this calculation.

However, according to the research reports of CICC and Huachuang Securities, Mingming Henmang previously estimated the gross profit margin of its bulk snack franchise stores to be 18%, which is far from the 29.5% gross profit margin calculated above. The reason for this difference may be the failure to consider the impact of the points system, membership prices, and membership - day activities on revenue.

Generally speaking, the markup rate of Mingming Henmang and its franchise stores in the entire sales chain is not high, which is the main source of the cost - effectiveness of its products.

Has the Industry Entered a New Stage of Intensive Operation?

From a financial perspective, Mingming Henmang's light - asset and high - turnover operation model is unlikely to fall into financial difficulties such as capital chain breaks and huge losses in the traditional sense. Even though Mingming Henmang's gross profit margin and net profit margin are relatively low, as long as the company maintains the model of large - scale procurement + fast payment, the gross profit margin and net profit margin will not fluctuate significantly.

Currently, the most core issue is that the low gross profit margin of offline franchise stores may restrict the company's growth. The underlying logic is that the low gross profit margin will restrict the ability of offline franchise stores to bear rent and labor costs. When expanding to high - tier cities with a denser population and stronger consumption ability, they need to match more refined operation capabilities. On the other hand, when the terminal stores of bulk snacks gradually tend to be saturated, the industry as a whole will experience a phased switch from high - speed expansion to stable operation. If Mingming Henmang's large - scale procurement advantage cannot be further magnified, the enterprise needs to pay more attention to supply - chain optimization rather than simply relying on rapid expansion to drive growth.

Calculating the cost - benefit from the perspective of franchise stores, using the method of dividing GMV by the total number of stores, the average annual retail sales of Mingming Henmang's offline stores in 2022/