Judging from the evolution of mature categories of optional foods, the vitality of casual food choices basically entered a deceleration period 10 years ago: during the period 2012-2022, apart from the accelerated growth in sales of nuts, meat foods, and aquatic optional foods, the annual growth rate of most optional food categories fell below double digits, but categories such as potato chips and puffed foods that had little to do with consumption upgrades or health were still able to maintain growth.

In terms of demand, all categories of optional foods have a good foothold: there are few categories of jelly that can be replaced. In the past, consumer pain points mainly focused on issues related to product health, child choking, etc.; instant noodles solve the demand for “pasta+fast food”; in casual braised flavors, if chicken claws and duck neck remove the addictive nature of spicy food, we think its core foothold is probably the act of bone removal, that is, consumers can spend a certain amount of energy processing food to better pass the time and stay full. It exists, but as the second and third most consumed meat, chicken, and Duck offal has an advantage in the supply chain.

How can the takoyaki company Hotland achieve sustainable single-store revenue growth and long-term same-store revenue growth: Hotland is a leading Japanese takoyaki company, and the consumption attributes (optional) and single-store model are similar to delicious foods. Hotland's same-store revenue was rising for most of the nearly 10 years from 2014-24. Unlike food brands such as Salia and Food House, which have fast food attributes and follow a cost-effective model, Hotland does not place too much emphasis on the low price model, which is particularly valuable in the Japanese market where consumption is sluggish.

The core of Hotland's continued increase in same-store revenue is that it attaches great importance to data and serves as the foundation for promotion, marketing, and store opening activities. This makes the number of important products continue to increase, and IP co-branding methods are effective.

Implications for delicious food: 1) When it comes to optional consumption, the low price/cost ratio is not the only development paradigm; 2) IP co-branding is an important means of maintaining brand vitality; 3) From the perspective of opening a store, store types need to adapt to local conditions and be rich in forms (such as restaurants, carts, self-service); 4) Takeout penetration may continue to increase, and companies should pay attention to it; 5) Valuing data is a prerequisite for development.

Profit forecasting, valuation and ratings: The short-term boom in the casual marinated food industry still needs to be improved, and the market also questions the long-term development prospects of exquisite food. However, we believe that with reference to other mature casual snack companies, the casual brine industry still has strong vitality, and the key is how to adapt to changes in channels. Judging from Japan's experience, cost performance is not the only development direction; focusing on data is conducive to more accurate promotion and marketing, thus achieving long-term single-store revenue growth. We are optimistic about the long-term development logic of exquisite food, but considering that short-term consumption is still under pressure, we lowered the company's net profit forecast for 24-26 to 0.647/0.841/0.933 billion yuan (down 23%/14%/19% from the previous time). The current stock price corresponds to PE valuation 14/11/10 times, maintaining a “buy” rating.

Risk warning: Raw material costs are rising, downstream consumption is weak, and store expansion falls short of expectations.