Goldman Sachs | Mingming Henmang (1768.HK): NDR Takeaways — Reinforced Confidence in Long-Term Store Potential with Healthy Unit Economics and Diverse Same-Store Growth Levers

Abstract

Goldman Sachs hosted an NDR with Mingming Henmang's (1768.HK) CFO on August 28, 2026, following results, and reiterated Buy with a 12-month target price of HK$610, based on 17x 2027E target P/E discounted to mid-2027 at a 9.4% cost of equity, implying 37.1% upside from HK$444.80. Store economics remain healthy: franchisee average payback is around two years, the closure rate is only about 0.6%, roughly 200 stores opened in Hunan in 1H26 with new-store profitability above the national average, and township penetration stands at just 10-20%, where lower rent and labor costs keep stores with monthly sales of about RMB300,000 solidly profitable. Same-store growth levers are diverse, spanning product availability and display, store upgrades, added shelving, membership operations and category expansion: bulk snacks account for about 40% of GMV (typically 40-50%, higher in South China), sausages and egg tarts are stocked in over 10,000 stores, frozen food has room to increase, and toys are viewed as a natural extension. Management sees 1H26 gross/net margins of 11.5%/5.4% as sustainable with gradual improvement from scale and end-to-end efficiency, with no long-term margin cap set. At 15x/11x 2026/27E P/E versus a 26% 2026-28E earnings CAGR (2026-28E EPS of RMB24.12/33.20/38.33), the shares screen attractively. Key risks: intensified competition and price investment, network density and self-cannibalization, franchise-model and expansion complexity, and supply chain/food safety/logistics.