Value Retailers: Market concerns overdone; strong store expansion with healthier closure ratio/resilient SSSG; Reiterate Buy

Research evidence excerpt

Value Retailers: Market concerns overdone; strong store expansion with healthier closure ratio/resilient SSSG; Reiterate Buy

Equity Research

23 July 2026 | 10:32PM HKT

CHINA STAPLES

Value Retailers: Market concerns overdone; strong store expansion with

healthier closure ratio/resilient SSSG; Reiterate Buy

Following recent market concerns about store open cadence and subsequent share Leaf Liu

+852-3966-4169 | leaf.liu@gs.com

price volatility in the value retail/snack discount sector today, we reiterate our BUY Goldman Sachs (Asia) L.L.C.

ratings on industry leaders Busy Ming and Wanchen. While short-term sentiment Christina Liu

has been impacted by concerns over normalizing store payback periods vs. rapid +852-2978-6983Goldman Sachs (Asia)| christina.liu@gs.comL.L.C.

store opening pace (Busy Ming Group (1768.HK): Total signed store exceeds 30k now Valerie Zhou

surpassing GSE store number for 2026), we believe that the structural transition of +852-2978-0820Goldman Sachs (Asia)| valerie.zhou@gs.comL.L.C.

the F&B retail channels actually favors the scale leaders, accelerating the exit of

weaker regional players, and solidifying a profitable duopoly. GS: 1H26/2Q26

Preview expect strong Earnings Growth: We forecast 54% sales growth / 98%

adjusted net profit (NP) growth for Busy Ming in 1H26, and 41% sales growth /

102% pre-MI NP growth for Wanchen in 2Q26, highlighting robust operational

momentum and resilient fundamentals for the two sector leaders:

n Accelerated Store Expansion: Store openings in 1H26 have significantly

outpaced expectations. Wanchen’s gross openings in 1H26 (c. 4,700+) have

already exceeded its full-year 2025 level, while Busy Ming tracked at similar gross

openings (compared to 1.5k/2.5k in 1H25).

n Healthier store closure ratio vs.