Investment Value Analysis of the Restaurant Bar Sector: Research Report on COMMUNE Huan Shi

Based on the above data collection and analysis, I will provide you with an in-depth report on the investment value of the restaurant bar sector and COMMUNE Huan Shi.

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A restaurant bar (Restaurant Bar) is a composite business format that integrates the social atmosphere of traditional bars with full-service restaurants, meeting consumers’ dual needs for formal meals and social interaction through the “food + beverage” model. According to Frost & Sullivan data, the total revenue of China’s chain restaurant bar market reached

in 2024, which is in a stage of rapid development and integration [1][2].

• Highly fragmented market structure
  : The industry’s CR5 was only 2.8% in 2024, with low concentration among leading brands
• Clear advantages of leading brands
  : COMMUNE Huan Shi ranks first with a 7.8% market share, which is approximately twice the combined share of the second and third places [2]
• Mature full-time operation model
  : Covers multiple scenario needs such as brunch, afternoon tea, dinner, and nighttime beverage service

China’s current catering market is undergoing structural adjustments, with a significant consumption downgrade trend:

Indicator	Data	Explanation
Consumer Confidence Index	85.7	A significant decline from over 100 in 2023 [3]
Growth Rate of Per Capita Catering Consumption	1.3%	Far lower than the income growth rate of 5.2% [4]
Duration of High Cost-Performance Trend	Until 2027	Predicted by Nut Ventures [5]
Growth Rate of Snack and Fast Food	7.5%	Leads all catering categories [4]

1. Increased price sensitivity
   : 83% of consumers prioritize the “transparent pricing” label [4]
2. Return to rational consumption
   : Demystification of internet-famous restaurants, and downward trend of high-end catering [5]
3. Cost-performance orientation
   : The “formal meal + tipsy socializing” model priced at around RMB 100 is more popular [1]

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• Founding Year: 2016, Wuhan
• Founding Team: 20 years of consecutive entrepreneurship experience in catering
• Financing History:
  • 2021: Series A investment from Hillhouse Capital
  • 2022: Series A+ round led by Dayone Capital (hundreds of millions of RMB)
• Shareholding Structure: Hillhouse Capital holds 9.63%, Dayone Capital holds 1.71% [2]

Dimension	Advantage Description
Market Position	China’s largest restaurant bar brand (112 stores, 7.8% market share) [2]
Brand Recognition	Referred to as the “Food & Beverage Museum” on Dianping and Xiaohongshu [1]
Product Barriers	Popular signature dishes such as Crispy Golden Sand Wings (3 million servings) and Black Truffle Air-Dried Ham Pizza [1]
Supply Chain Capability	Cooperates with American renowned chefs, independently develops and produces core ingredients

Period	Revenue (RMB 100 million)	YoY Growth Rate	Adjusted Net Profit (RMB 10,000)
2023	8.45	-	7,340
2024	10.74	+27.1%	6,620
First Three Quarters of 2025	8.72 (+14.2% YoY)	+14.2%	7,860

• Ultra-high gross profit margin
  : Stable at
  above 65%
  , significantly higher than the industry average (approximately 60%) [1]
• Healthy cash flow
  : Sustained net cash inflow from operating activities from 2023 to 2025 (RMB 275 million → RMB 221 million → RMB 203 million) [2]
• Short investment payback period
  : The average investment payback period for stores is about 17 months, and the first break-even period is about 3 months [2]

COMMUNE Huan Shi: 65% ████████████████████████████████
Helen's:          52% ████████████████████████
Naixue's Tea:     62% ██████████████████████████████
Haidilao:         55% █████████████████████████
Jiumaojiu:        60% █████████████████████████████

1. Product Structure Optimization
   • Starting in 2024, the proportion of food sales increased from 43% to 54%, surpassing beverage sales for the first time [1]
   • The average customer transaction value remains in the range of RMB 80-150, and the “flexible spending” model meets different consumption needs [1]

2. Supply Chain Scale Effect
   • Unified procurement under direct operation model, with strong large-scale bargaining power
   • Increased proportion of self-owned products, gross profit margin of third-party brand beverages is approximately 52% [6]

3. Efficiency Improvement through Full-Time Operation
   • Covers brunch, afternoon tea, dinner, and nighttime beverage service
   • Asset utilization rate is significantly higher than that of single-format catering

Risk Factor	Assessment
Same-store Sales Decline	Phased decline in 2024, requires attention [1]
Cost Pressure	Continuous increase in rent, labor, and raw material costs
Intensified Competition	Increase in cross-sector competitors such as Helen’s and Naixue’s Tea
Consumption Downgrade	Need to continuously provide “high-quality and affordable” experience

• ✅ Promote product innovation (Huan Shi Small Wine Barrel, a hit product with sales of millions of barrels)
• ✅ Optimize store models (hierarchical coverage of standard stores + premium stores) [2]
• ✅ Penetrate sinking markets (obvious cost advantages in third-tier and lower-tier cities) [1]

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• The CR5 of China’s restaurant bar market is only 2.8%, far lower than that of the UK (25.5%) and Japan (15.0%) [6]
• Significant room for industry integration, with great potential for leading brands to increase market share

Brand	Positioning	Number of Stores	Core Advantages
COMMUNE Huan Shi	Mid-to-high-end restaurant bar	112	High gross profit margin, full-time operation
Helen’s	Economy-style pub	500+	Extreme cost-performance, franchise expansion
Hutaoli	Literary-style pub	200+	Music + Cuisine + Beverages
Erma Pub	High-end atmosphere	100+	High-quality environment and service

• Target Customer Group: Generation Z and new middle class
• Consumption Scenarios: Family dinners, intimate socializing, team building, nighttime beverage service
• Value Proposition: Provide “formal meal + tipsy socializing” experience at a price of around RMB 100

1. Sector Dividend
   : The day-time dining and night-time beverage model fits young consumers’ habits
2. Brand Mindshare
   : Strong social attribute, members contribute over 70% of sales [2]
3. Scale Effect
   : 112 direct-operated stores form supply chain barriers

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Highlight	Analysis
Sector Leader	7.8% market share, ranked first in the industry, with first-mover advantage [2]
Steady Profitability	Sustained net profit, healthy cash flow
Growth Potential	Plan to add 105-135 stores in three years, scale is expected to double [1]
Hong Kong Stock Exchange Listing	Hong Kong stock market favors consumer brands, with smooth financing channels [7]
Capital Recognition	Endorsed by renowned institutions such as Hillhouse Capital and Dayone Capital

Risk Type	Specific Description	Impact Level
Consumption Downgrade Risk	Increased consumer price sensitivity, pressure on the high-margin model	★★★★☆
Same-store Sales Decline Risk	Phased decline in same-store sales in 2024 [1]	★★★☆☆
Cost Pressure	Continuous increase in rent, labor, and raw material costs	★★★☆☆
Intensified Competition	Increase in cross-sector competitors such as Helen’s and Naixue’s Tea	★★★☆☆
Expansion Risk	Rapid expansion may dilute single-store profitability	★★★★☆
Post-listing Performance Risk	Differentiation in Hong Kong stock market’s consumer sector, some companies broke issue price [7]	★★★☆☆

1. Sector Dimension
   : The restaurant bar is a segmented track in a hundred-billion-level market, with an obvious trend of industry concentration improvement, and leading brands are expected to continue to benefit
2. Company Dimension
   : As the industry leader, COMMUNE Huan Shi has a clear business model, and its high-margin model has differentiated advantages in affordable competition
3. Time Window
   : Amid the consumption downgrade trend, brands positioned for high cost-performance have better anti-cyclical capabilities, and COMMUNE’s average customer transaction value of RMB 80-150 is in the “affordable access” range

• Same-store sales growth rate
• Whether the gross profit margin can remain above 60%
• Sinking effect in third- and fourth-tier cities
• Market valuation performance after listing on the Hong Kong Stock Exchange

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• Market size of RMB 13.5 billion, CR5 of only 2.8%, significant room for integration
• Amid the consumption downgrade trend, the “affordable socializing” model is more resilient
• The industry is shifting from “story-telling” to “performance-focused”, and profitability has become the key

• Short-term (1-2 years)
  : Sustainable. The 65% gross profit margin is significantly higher than the industry average, supported by product structure optimization (full-time operation)
• Mid-term (3-5 years)
  : Needs observation. If the consumption downgrade trend continues, a balance must be struck between scale expansion and profit margin
• Key Success Factors
  : Supply chain efficiency improvement, product innovation capability, sinking market penetration rate

• For investors pursuing
  certainty
  : Can be used as a core allocation target in the restaurant bar sector
• For investors pursuing
  growth
  : Need to pay attention to its post-listing valuation performance and expansion execution
• It is recommended to allocate opportunistically based on market sentiment and valuation levels after listing on the Hong Kong Stock Exchange

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[1] 36Kr - “112 Stores, Annual Revenue Exceeding RMB 1 Billion: Hillhouse Invests in China’s Largest Restaurant Bar” (https://eu.36kr.com/zh/p/3634674384569345)

[2] Guancha.cn - “COMMUNE Huan Shi Pursues Hong Kong IPO, Hillhouse and Dayone Capital are Shareholders” (https://user.guancha.cn/main/content?id=1581515&s=fwtjgzwz)

[3] CBNData - “Review of Seven Major Changes in the Catering Industry in 2024” (https://www.cbndata.com/information/293566)

[4] Qibang - “2024 China Catering Category Development Report: Category Breakthrough and Regional Transformation in the Cost-Performance Era” (https://www.cnqibang.com/industry/62.html)

[5] Sina Finance - “Catering Survival Battle: In the Era of Affordable Consumption, Don’t Blindly Compete on Low Prices” (https://finance.sina.com.cn/tech/roll/2024-09-29/doc-incqurue0448082.shtml)

[6] Debang Securities - “In-Depth Report on Helen’s: Thriving Under Bright Lights, the Pub Leader Moves Steadily Forward” (https://pdf.dfcfw.com/pdf/H3_AP202206011569321747_1.pdf)

[7] 21st Century Business Herald - “2025 Hong Kong IPO ‘Super Cycle’: Not Enough Gongs to Ring, Consumer Sector Booms” (https://www.21jingji.com/article/20260106/herald/864768ad59c8232d5019514be7839f44.html)

[8] PwC - “2024 Series Report on Capital Path of Chinese Chain Catering Enterprises” (https://www.pwccn.com/zh/retail-and-consumer/report-on-chinese-chain-catering-enterprises-jul2024.pdf)

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January 12, 2026
Jinling AI Financial Research Department