as a result of format superiority. Instead, it stems from a unique combination of manufacturing industry, a highly efficient and cost-effective logistics network, a densely aging and less efficient traditional retail formats. Fundamentally, the snack discounter subsidies. By eliminating brand premiums, streamlining distribution channels and optimising turnover efficiency, we think these interconnected factors collectively form The current stage, and upside for snack discounters place: Snack discounters transitioned from incubation to rapid expansion over 2017-21, and gradually evolved into a duopoly over 2022-25 with two leading groups dominating. o aa au yanoun o laqaon u! pay dnog busn Asna (l au au Busy For You and ZhaoYiMing, with around 21,000 stores as of end-2025; 2) Wanchen Group consolidated five brands under the HaoXianglai banner, exceeding 15,000 stores as of June 2025. In 2025, our channel checks suggest the total number of snack discount stores has exceeded 56,0oo, with Busy Ming and Wanchen each owning over one third of the total store count, while other regional players have limited market shares (each below 10%), indicating an accelerating degree of market consolidation. Ming Group, consolidating two leading brands Busy Ming Group securedYankershop exited Rmb1.05bn from Yankershop Source: Company data, Baidu Map, Hongcan, UBS estimates Store economics--payback extends to 24-30 months, but still attractive among