Wanchen Group Posts 116% Profit Growth in H1, Bets on Franchise Model After Scrapping Direct-Retail Plan

Wanchen Group (300972.SZ), parent of the “Haoxianglai” snack brand, reported significant revenue and profit growth for the first half of 2026, propelled by an accelerated expansion of its franchise-based retail network. The results follow a strategic pivot where the company canceled a major investment in directly-operated stores to focus entirely on its capital-light franchise model.

Stellar H1 Performance

According to its mid-term financial report released on August 28, Wanchen Group's performance for the six months ending June 30, 2026, saw substantial gains driven almost entirely by its snack business.

• Revenue: Reached ¥34.84 billion, a 54.26% increase year-over-year.
• Net Profit: Surged 115.95% to ¥1.88 billion.
• Net Profit (Non-recurring items excluded): Grew 153.17% to ¥1.14 billion.

The company's bulk snack retail segment was the primary growth engine, with its revenue climbing 54.49% to ¥34.52 billion, accounting for 99.1% of total income. Its legacy edible mushroom business also grew, with revenue up 32.61% to ¥315 million.

Shift to Franchise-Led Expansion

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This strong financial performance is underpinned by a rapid increase in its physical store footprint. As of June 30, 2026, Wanchen operated 23,802 stores, having added 5,814 new locations and closed 326 in the first half of the year for a net increase of 5,488 stores. This six-month expansion already surpasses the net 4,118 stores added in all of 2025.

The company formalized its franchise-first strategy in May 2026 when it terminated a previously announced plan to invest ¥117 million in opening 100 company-owned stores. Wanchen Group stated that the project was no longer cost-effective and that partnering with franchisees allows for faster market entry, greater market share, and improved economies of scale. As of year-end 2025, franchised locations already accounted for over 98% of the company's revenue.

Competitive Landscape and Outlook

Wanchen's aggressive push comes amid intense competition in China's bulk snack market. Its primary rival, Mingming Henmang (01768.HK), also reported strong growth, with H1 2026 revenue reaching ¥45.00 billion and its store count hitting 26,405. This underscores the high-stakes race for market dominance in the sector.

To fund its expansion, Wanchen refiled for an initial public offering in Hong Kong on March 30, 2026. According to its prospectus, the company plans to use the proceeds to deepen its presence in high-potential domestic regions and to explore overseas markets, targeting Southeast Asian countries like Vietnam, Cambodia, and Malaysia with its franchise model.