A：In 2025, the company's financial performance has improved significantly. First, we have experienced a restructuring of the company over the past two years to respond to market changes, especially in the first half of 2024, with a net reduction in the number of stores and a total of more than 1600 stores closed. But by the second half of 2025, we managed to achieve a net increase in the number of stores, adding 22 new stores. This turning point is mainly due to the company's reconstruction of the single-store model and the in-depth adjustment of the ability to improve store management through the fine management of technology applications.

A：As the size of its stores shrank, the company's revenue declined. However, we pay more attention to the construction of store profit model, rather than simply pursuing scale expansion. Consumer market demand changed significantly during the outbreak, so we positioned ourselves as a high-quality, cost-effective fruit expert and leader, and adjusted our products and services to this positioning. After adjustment, the national average number of visitors and gross profit achieved a net increase, and the store operating conditions are healthier.

A：With the optimization of the company's product structure, gross profit and gross margin showed a month-on-month upward trend. In the second half of 2025, the gross profit reached 0.38 billion and the gross profit margin reached 10 percentage points. It is expected that there is still room for improvement in 2026. In terms of net profit, the company suffered a 4.4 billion loss in 2024, but achieved a micro-profit in the second half of 2025, thanks to the increase in gross profit brought about by product restructuring and the orderly reduction of expenses. The core factor of cost saving is the company's continuous investment and achievement transformation in science and technology since 2019, especially in ordering, operation management, staff training and other aspects, which effectively saves labor costs and lays a good foundation for the company's long-term development.

A：Baicuo Orchard currently has more than 4,000 stores in 22 provinces and more than 170 cities across the country. It has declined compared to 2022, but this trend has changed. The number of registered members exceeds 90 million, and the number of WeChat communities has also increased greatly. In terms of store layout, the distribution of first-and second-tier cities and third-and fourth-tier cities is relatively balanced. New stores opened in the second half of 2025 are mainly concentrated in third-tier cities and below. Despite a slight decline in average daily sales per store, average daily visitors and average daily gross profit remained in the mid-single digits. According to the change of price sensitivity in the consumer market, the company divides fruit products into passenger goods and gross profit products, and supports differentiated pricing and marketing strategies to improve the quality of store operation.

A：At the product end, Baiguoyuan focused on creating non-fresh fruit products and gift box products, of which non-fresh category sales increased by about 13% year-on-year. In terms of store scene layout and service, stores are constantly upgrading and building theme stores. For example, different theme scenes are introduced according to different season and solar term. At the same time, refined services are further developed, such as innovative products such as grapefruit cups, which are convenient for consumers to carry and eat. After-sales service is also upgraded in an all-round way, and customers can realize one-click refund within seven days on the small program. In addition, the company attaches great importance to the ecological construction of the community. The number of WeChat communities has reached more than 10 million, and the average sales of community user stores account for more than 6%. It also enhances the stickiness of users through activities such as pre-sale and dragon-connection through the community.

A：Pre-sale can effectively manage inventory, adjust the order quantity of the next day according to the pre-sale situation of the previous day, and avoid the problem of unsalable fruit.

A：We conduct food safety advocacy in the community, including the correct consumption of fruits, cleaning, cutting methods and traceability information sharing, and work with suppliers to ensure food safety at the source. We not only launch personalized fruit gift-giving service on big festivals, but also pay attention to small festivals and realize one-button gift-giving function. Customers can select gift boxes through small programs and deliver them directly to the home of the gift-receiving person, while providing convenient return service.

A：We have launched a key acceptance function, consumers can directly communicate with us about quality or type problems, and the production department will respond in a timely manner. This increased the proportion of gift sales to 14%.

A：In addition to our investment in QC channels, we have also done a lot of work in QB, with a revenue of more than 1 billion yuan. We mainly face government and enterprise customers and Internet enterprises, provide solutions for specific scenarios, and cooperate with trade unions and banks to drive the growth of store passenger flow.

A：At present, Baiguoyuan has 53 categories of brands, such as red ballet strawberries, soft fragrant jade, etc., and through specific trademarks and bases to build. When encountering yield and quality problems, it will adjust the category brand plan, introduce varieties from the source, guide agricultural technology and post-natal preservation technology, and improve quality and yield.

A：Facing the huge store scale and complex operation scenarios, Baoguoyuan actively embraces cutting-edge technologies such as AI, introduces a new generation of cash register system to reduce costs, improve system stability and compatibility, and uses AI to identify fresh products, thus improving the accuracy of cash register, reducing the manpower burden of stores and promoting the overall operation efficiency.

A：The AI intelligent ordering system launched by Baiguoyuan can provide intelligent order suggestions for franchisees based on historical sales data, inventory system, weather conditions and promotional activities. After receiving the order pushed by the system, the franchisee can complete the order work the next day by simply increasing or decreasing, greatly shortening the original order time of more than one hour, and now it only takes more than ten minutes or even a few seconds.

A：The AI store operation diagnosis system uses advanced data analysis capabilities to automatically scan and identify the shortcomings and blind spots in each store operation, and give targeted improvement strategies in real time. In the past, it was necessary to check the store operation data manually on a regular basis, but now the system sends out key information tips every day, paying attention to the store inventory, passenger flow, etc., which helps enterprises to understand and solve the problems of each store in a timely manner and lays the foundation for large-scale development.

A：The fruit knowledge model integrates the professional knowledge, quality control and preservation methods and sales skills accumulated by 100 orchards for more than 20 years to form a reusable and inheritable core digital asset. This measure not only helps employees master the characteristics of different fruits more efficiently, but also provides professional support in the sales process, solves consumer questions, and reduces the pressure on store employees to remember many varieties.

A：Baoguoyuan invests more than 0.1 billion yuan in research and development of science and technology every year, which is mainly used for the construction and optimization of ERP system, WMS, WTS and other self-owned systems, because the use experience of standard systems in the market is not friendly. Since 2016, Baoguoyuan has set up its own science and technology team, which is committed to the research and development of its own system to realize the fine management of the whole link.

A：As a green agricultural product enterprise, Baicuo Orchard bears social responsibility, connects farmers and citizens, and pays special attention to food safety. For food safety issues, Baiguoyuan adopts strict management measures, trains and educates illegal franchisees, guides the resumption of trading, and may take management measures such as punishment or even cancellation of processing qualifications to ensure the provision of safe fruit products.

A：The strategic layout of Baiguoyuan first focuses on optimizing the store model and shortening the return cycle of franchisees; secondly, strengthening the application of AI and AM technology to reduce costs and improve operational efficiency; finally, Baiguoyuan fully opens its supply chain, aiming to build a fruit retail ecosystem with the market and jointly promote industry innovation and development.

A：Yes, the company does have some layout in this area recently. In early 2025, we worked with some regional channels to set up some subsidiaries to jointly build a snack and fruit format, hoping to empower these snack stores through fruit, and not just stay at the fruit level, but hope to expand the scope of the business.

A：We have noticed that fresh snacks are a very hot format, and major retailers are trying to enter. Although fresh snack shops are usually large in scale and have higher unit prices, this market opportunity does exist and can meet the needs of some young people. As a fruit supply chain enterprise, we regard them as an important sales channel and maintain close contact. We may try to combine fruits with fresh snacks with short shelf life, such as baked goods and marinated products, in some CBD stores or street stores, if the franchisee wishes to cooperate, but this will be adjusted according to the characteristics of the business circle.

A：At the group level, profits mainly come from the difference in the price of fruit sales to franchisees, I .e. 90% of the revenue comes from this, while profits are revenue minus labor costs, research and development costs, etc. At the single store level, the gross profit margin is about 30%, and the profit is the balance after deducting rent, labor and utilities. At present, the net interest rate of a single store is about 5%.

A：The published data are all group data, that is, supply chain data. The consumption data of terminal stores needs to be calculated by adding about 30% to the group data.

A：At present, our profit model is mainly the supply chain model, from the retail side is the supply chain model. We are gradually shifting to a platform model, in which QC-side revenue may gradually decrease, while to-B-side platform revenue will gradually increase.

A：The money paid by the consumer's order will go directly to our group's account, and then we will settle the monthly settlement to the franchisee. Therefore, this money is not counted as our revenue, but is processed on a collection and payment basis.

A：Yes, actually through payment data penetration analysis, our group's revenue is actually 20% to 30% higher than the current store display data. This is because the data has already penetrated the calculation, and at present, through the clearing model, the tax department does not think that our collection and payment model needs to be penetrated, which is a common situation in the retail industry.

A：Investors can raise their hands if they are in doubt.

A：The company has indeed lost money since 2025, but in the first half of this year (January-April) it has achieved a micro-profit state and has not lost money from the group side. For the full year, the guidance is expected to be flat and stop falling to profit, although the exact amount of profit is not yet certain.

A：This year, the focus is on adjusting the franchise model. It is estimated that more than 200 new stores will be added, with a relatively limited scale. With the strategy of stopping giving stores and consumers too much profit subsidies and returning to normal levels, revenues and profits will gradually pick up as stores expand and same-store stability.

A：First of all, for loss management, Baiguan has done a relatively good job in fresh loss control, and the loss rate of the whole link is about 5 points. Losses include the process from the origin to the warehouse and then to the store, where the loss from the origin to the warehouse is borne by the supplier, while the store bears the loss (about 3-4 points) after receiving the goods. The causes of loss will be analyzed and processed through the return policy and loss reporting process. At present, the average return cycle of a single store is about two years. The specific calculation is based on the national average cost of a single store of about 23-250000, annual sales of about 2 million, and net interest rate of about 5%, so it can be returned in about 26 months.

A：If it is found that the product is not fresh enough, the store can choose to sell it at a discount or sell it, but it is not allowed to smash it into a fruit plate. In addition, the store is required to handle the remaining fruits after the customer purchases them, such as reducing the price or giving away to employees and customers, but the store is not allowed to provide processing services such as juicing.

A：We adopt a monthly settlement model, automatically allocate goods to the platform every day, automatically reconcile and settle accounts at the end of the month, and return the remaining money to the platform after deducting the cost of the product. The platform is responsible for paying rent and labor.