Guming - H: Proposed offering of HK$1,960mn convertible bonds and concurrent share repurchase

Research evidence excerpt

Guming - H: Proposed offering of HK$1,960mn convertible bonds and concurrent share repurchase

Jessie Xu AC Asia Pacific Equity Research

(852) 2800-8590 24 June 2026 J P M O R G A N

jessie.j.xu@jpmorgan.com

Investment Thesis, Valuation and Risks

Guming - H (Overweight; Price Target: HK$38.00)

Investment Thesis

We like Guming for: 1) its low-profile management, focused strategy and strong execution;

2) its regional densification strategy has proved to be highly efficient and replicable (top

eight provinces collectively accounted for over 80% of its GMV); 3) fresh ingredients &

affordable price-centered positioning – the future prototype of the modern teahouse, in our

view; and 4) best-in-class supply chain to support fast expansion (cold-chain delivery to

97% of Guming stores every two days). The “Good me” brand is well known for its

attractive selling prices, especially in smaller towns. Management is aiming high with a

target of 30,000 stores in five years. Guming’s store number reached 13,554 by end-2025,

implying a net opening of 3,640 stores in FY25.This fast pace should continue into 2026,

in our view, and we model 3.5k and 3.4k net openings for 2026E and 2027E (to reach 20k

stores by 2027). We expect the company to deliver a 19% EPS CAGR and 19% revenue

CAGR over 2025-2028E.

Valuation

Our Dec-26 price target of HK$38 is based on 20x 2027E P/E. We think a higher than

Chinese peers valuation is justified, considering its solid market share gains in a fast

growing sector. The market seems too conservative on 2026 SSSG given the high base in

2025, and we expect earnings upward revisions to trigger a further rerating.

Risks to Rating and Price Target

Key downside risks to our rating and price target include: 1) rapid changes in consumer