XIAO NOODLES, with nearly a 40% increase in store count, is approaching the 100 million yuan profit club

"The first stock of Chinese noodle restaurants" XIAO NOODLES has released its first performance forecast after going public in Hong Kong. It is expected to record a net profit of RMB 100 million to 115 million in 2025, a year-on-year increase of 64.7% to 89.5%; the adjusted net profit is expected to reach RMB 125 million to 140 million, with a year-on-year growth rate of 95.6% to 119.1%. In the current environment where the restaurant industry is generally under pressure, this profit growth rate far exceeding the revenue growth rate usually indicates that management leverage and operational efficiency are in a period of accelerated release. Scale expansion remains the primary driver of growth. By the end of 2025, the total number of XIAO NOODLES restaurants is expected to reach 503, an increase of nearly 40% from 360 at the end of the previous year. This means that over the past year, an average of more than one new store opened every three days. However, in the face of fierce market competition, XIAO NOODLES is also facing the common dilemma of "declining average spending per customer" in the restaurant industry. From 2022 to 2024, the average order consumption at XIAO NOODLES restaurants decreased from RMB 36.1 to RMB 32, and the average daily sales per store are also in a downward trend. What truly determines profit elasticity beyond scale is the "downward" strategy of site selection and the improvement of operational efficiency. The company pointed out that its restaurants are extending from high-rent core areas in the city center to lower-cost surrounding areas. Meanwhile, as the number of stores increases, the profit contribution from the Hong Kong Special Administrative Region continues to rise. In the first half of 2025, the operating profit margin of XIAO NOODLES' directly operated restaurants in first-tier and new first-tier cities was 14.1%, while in second-tier cities and below, as well as in the Hong Kong Special Administrative Region, this figure reached 19.8% and 21.8%, respectively, with a difference of more than 5 percentage points. Currently, the market landscape for Chinese noodle restaurants remains highly fragmented, with the total gross merchandise volume of the top five companies accounting for only about 3%. This indicates that, relying on standardized store models and strong middle-office support, leading brands still have significant integration potential in the future. Looking to the future from the current point in time, XIAO NOODLES' ambitions have not stopped. According to the plan, the company will open 520 to 610 new restaurants between 2026 and 2028 through a combination of direct operation and franchising. This means that within the next three years, its store scale is expected to double again from the current 500 stores. Risk Warning and Disclaimer The market has risks, and investment should be cautious. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at their own risk.