Analysis of Accounts Payable and Supplier Bargaining Power of Yuanji Food

Based on the public information searched, I have conducted the following analysis on the accounts payable and supplier bargaining power of Yuanji Food:

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The proportion of accounts payable to total assets of Yuanji Food is

[1][2]. According to the data disclosed in the prospectus, this proportion reflects the company’s liability structure and financial management characteristics. From a financial perspective, the 9.97% accounts payable proportion is within the normal range of the restaurant chain industry.

• In the first three quarters of 2024, the company’s bank borrowings increased significantly from RMB 95 million to RMB 250 million[1]
• The asset-liability ratio rose from 14.8% at the beginning of 2024 to 20.9% at the end of September 2025[1]
• In the liability structure, the proportion of accounts payable is moderate, and there is no over-reliance on supplier credit

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Yuanji Food has

supplier concentration, with the largest supplier being Bayan Wanrun, accounting for of total procurement[3]. This company mainly supplies pork, and Yuanji Food also holds a 10% equity stake in it. The two parties have maintained a cooperative relationship since 2017[3].

• The proportion of the single largest supplier is less than 10%
• The combined proportion of the top five suppliers is expected to be in the range of 30-40%
• The supply chain has a high degree of diversification, reducing the risk of dependence on a single supplier

• Scale Advantage:
  As of September 30, 2025, Yuanji Food has
  4,266 stores
  , including 4,247 franchise stores[3][4]. The large procurement scale endows the company with strong procurement bargaining power
• Integrated Supply Chain:
  The company has built a fully integrated supply chain system “from source to store”, with 5 central factories and 24 warehouses[1][3]
• Stable Cooperative Relationships:
  Long-term cooperative relationships have been established with core suppliers (such as Bayan Wanrun), and supply stability is enhanced in part through equity binding

• Risk of Raw Material Price Fluctuations: As a food enterprise, fluctuations in the prices of major raw materials such as pork will directly affect procurement costs
• Supply Chain Pressure from Rapid Expansion: Store growth reached 58% in 2023, putting higher demands on suppliers’ delivery capacity and response speed[1]

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Based on industry characteristics and Yuanji Food’s business model, its accounts payable management presents the following characteristics:

1. Account Period Management:
   Restaurant chain enterprises typically enjoy a supplier account period of 30-60 days. As a large-scale enterprise, Yuanji Food is in a relatively favorable position in account period negotiations

2. Cash Flow Contribution:
   As a short-term financing source, accounts payable helps optimize the company’s working capital management and supports the capital needs of rapid store expansion

3. Financial Health:
   The company’s adjusted net profit margin remains in the range of 7%-9.7%, with an adjusted net profit of RMB 192 million in the first three quarters of 2025[4], demonstrating good solvency

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Indicator	Evaluation	Explanation
Accounts Payable Proportion	Moderate	The 9.97% proportion is within the reasonable industry range
Supplier Concentration	Low	The largest supplier accounts for 9.9%, with good dispersion
Procurement Bargaining Power	Strong	Supported by scale advantage and integrated supply chain
Supply Chain Stability	Good	Enhanced by long-term cooperation + equity binding

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1. Fluctuations in raw material prices may affect procurement costs and profit margins
2. Rapid store expansion puts higher demands on supply chain management capabilities
3. Increased bank borrowings bring pressure of rising financial costs

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[1] Bamboo Works - “Analysis of Yuanji Food’s Hong Kong IPO” (https://thebambooworks.com/cn/)
[2] Financial data from Yuanji Food’s prospectus
[3] 36Kr - “Yuanji Dumplings Pursues Hong Kong IPO” (https://m.36kr.com/p/3636531115901954)
[4] Eastmoney - “Yuanji Food Races Towards Hong Kong IPO” (https://finance.eastmoney.com/a/202601143617824131.html)