Single-store GMV grows alongside scale, Wanchen Group’s simultaneous improvements and challenges

The scale effect of Wancheng Group, the leader in bulk snack retail, is accelerating its positive transmission to the profit side. In the first quarter, the company achieved operating income of 16.63 billion yuan, up 53.7% year-on-year; net profit excluding non-recurring items was 570 million yuan, an increase of 168.2% year-on-year, with profit growth significantly outpacing revenue growth. Excluding the impact of share-based payment expenses, the net profit of the bulk snack business reached 960 million yuan, with a net profit margin rising to 5.84%, up 1.99 percentage points year-on-year. Changes in gross margin and cost structure further confirm the release of scale effects. In the first quarter, the company's overall gross margin was 12.9%, up 1.9 percentage points year-on-year. Sales expense ratio was optimized under the dilution effect of enlarged revenue, falling 0.67 percentage points year-on-year to 2.64%; management expenses increased 64.3% year-on-year to 452 million yuan due to higher personnel input during business expansion. Meanwhile, the company increased investment in digital systems, with R&D expenses soaring more than 13 times year-on-year to 16 million yuan, mainly for business software and system capabilities. The financial report shows the company purchased 100% equity of a software R&D firm during the period to improve its intellectual property layout. This move also pushed intangible assets up 75.47% compared to the end of last year. Store expansion has not slowed down. According to the company's previously disclosed Hong Kong IPO prospectus, by the end of February 2026, the number of bulk snack stores had exceeded 19,500, netting around 1,100 more than by the end of 2025. Single-store operational efficiency has also improved, with average monthly GMV per store rising from 382,000 yuan in the same period last year to 406,000 yuan for January-February 2026. The company stated in its report that by continuously offering high quality-price products and optimizing supply chain and store operations, both single-store revenue and profitability increased, and brand momentum was also strengthened. Despite the impressive growth rate, on the threshold of 20,000 stores, the flipside of scale expansion is also worth examining. On one hand, the geometric expansion of the management radius requires more refined operations. Surging management expenses and R&D input both suggest that "running a store well" costs more than just "opening a store." Service disputes and consumer complaints in bulk snack stores are typical friction costs during the rapid expansion of the franchise system. On the other hand, Wancheng Group's balance sheet remains in a high-leverage state. At quarter-end, total liabilities stood at 7.337 billion yuan; although the asset-liability ratio declined from 74.6% at the end of last year, it still reached 68%. For this bulk snack industry leader, whether the pace of deleveraging and H-share financing can be smoothly coordinated is a key variable for financial stability. Risk Warning and Disclaimer The market is risky and investment should be cautious. This article does not constitute personal investment advice and has not taken into account the individual investment goals, financial situation, or needs of specific users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular situation. Investment based on this article is at your own risk.