Core Viewpoint - The company is experiencing operational pressure but has significantly reduced losses in H1 2025, with a focus on brand adjustments and internal partnership models to stabilize and expand store presence [1][2] Group 1: Financial Performance - In H1 2025, the company achieved revenue of 1.942 billion yuan, a year-on-year decrease of 18.88%, with the brand "Xiabuxiabu" generating 1.135 billion yuan (down 13.5%) and "Coucou" generating 745 million yuan (down 25.8%) [1] - The net profit attributable to the parent company was -84 million yuan, a significant reduction from -272 million yuan in the same period last year, primarily due to improved raw material costs and reduced asset impairment losses [1] Group 2: Store Operations - As of H1 2025, "Xiabuxiabu" had a total of 763 stores, with a distribution of 42.6% in first-tier cities, 41.0% in second-tier cities, 16.0% in third-tier and below, and 0.4% overseas; the number of stores decreased by 63 year-on-year but increased by 3 compared to the end of 2024, indicating stabilization [1] - The company has implemented improvements in "Xiabuxiabu" stores, including promoting a small store model and controlling engineering costs, resulting in an overall turnover rate of 2.6 times, up from 2.3 times last year [1] - The "Coucou" brand had a total of 174 stores, with a year-on-year decrease of 71 stores, indicating it is still in a closure phase; the turnover rate for "Coucou" was 1.4 times, down from 1.6 times last year [2] Group 3: Strategic Initiatives - The company began implementing an internal partnership system for "Xiabuxiabu" in July 2025, with 5 partnership stores currently operating, showing better operating profit margins compared to regular stores; the company plans to add 60 partnership stores by the end of 2026 [1] - "Coucou" is undergoing a painful adjustment phase, with a new "dual-point" model being tested, which has shown significantly better performance than regular stores, and plans to roll it out to all mainland stores [2] Group 4: Ratings and Future Outlook - The company maintains a "Hold" rating with a target price of 1.15 HKD per share, reflecting a potential upside of 17.3% from the current price; projected net profits for 2025-2027 are expected to be -242 million yuan, -21 million yuan, and 11 million yuan respectively [2]

Investment Rating - The report maintains a "Hold" rating for the company with a target price of HKD 1.15 per share, indicating a potential upside of 17.3% from the current price of HKD 0.98 [6][17]. Core Insights - The company has experienced significant operational pressure in recent years, but it has managed to reduce losses substantially in the first half of 2025, with a net loss of HKD 0.84 billion compared to HKD 2.72 billion in the same period last year. This improvement is attributed to lower raw material costs and reduced asset impairment losses [8][6]. - The company has initiated an internal partnership system aimed at stabilizing and expanding its store network, with plans to add 60 partnership stores by the end of 2026. Currently, there are 763 stores under the main brand, with a slight increase in the number of stores compared to the end of 2024 [4][11]. - The "Couch" brand is under significant pressure, currently in a phase of store closures, with a total of 174 stores as of the first half of 2025. The brand's same-store sales have declined by 14.0% [5][12]. Summary by Sections Financial Performance - For the first half of 2025, the company reported total revenue of HKD 19.42 billion, a year-on-year decrease of 18.88%. The main brand contributed HKD 11.35 billion, down 13.5%, while the "Couch" brand generated HKD 7.45 billion, down 25.8% [8][6]. - The company expects net profits for 2025 to be -HKD 2.42 billion, improving to -HKD 0.21 billion in 2026, and turning positive with HKD 0.11 billion in 2027 [6][17]. Store Network and Strategy - As of the first half of 2025, the company operates 763 stores, with a breakdown of 42.6% in first-tier cities, 41.0% in second-tier cities, and 16.0% in lower-tier cities. The store count has stabilized, with a net increase of 3 stores compared to the end of 2024 [4][10]. - The company has implemented a "dual-point" model for the "Couch" brand, which has shown promising results, with a 49% increase in performance compared to traditional stores [12][5]. Cost Management - The company has seen a reduction in raw material costs by 22.5% to HKD 6.41 billion, contributing to an improved cost-to-revenue ratio of 33.02% [8][6]. - Employee costs have decreased by 18.1% to HKD 6.67 billion, with a reduction in workforce from 24,606 to 17,930 employees [8][6].

Core Insights - The hot pot industry is experiencing a shift from "incremental competition" to "stock competition," with a noticeable slowdown in market growth and a decline in per capita consumption [3][4] - The company, Xiabuxiabu, has launched a dual-point model for its brand "CaoCao," which includes a "selected single point + all-you-can-eat" approach, now available in 130 stores nationwide [1][2] - The company has introduced a single-person lunch set priced at 78 yuan per person, currently available in six cities in South China [2] Industry Trends - The hot pot market's growth rate is slowing, with per capita consumption expected to drop from 86.7 yuan in 2022 to 77.1 yuan by 2025, marking an 11% decline over four years [3] - There is a significant reduction in the proportion of stores with per capita consumption above 90 yuan, which has decreased by 16.9 percentage points, while stores with prices below 70 yuan have increased by 20.9 percentage points [3] Company Strategy - To support the "all-you-can-eat" model, the company emphasizes the need for a robust supply chain, which is crucial for maintaining quality and price competitiveness [4] - The company employs a supply chain management system that combines centralized control with regional operations, ensuring fresh produce and flexibility in menu offerings [4] - The company has invested in its supply chain by acquiring a halal meat processing company and establishing its own organic pastures and vegetable bases to ensure high-quality ingredients [4]

Group 1: Starbucks and Strategic Partnerships - Starbucks has announced a strategic partnership with Boyu Capital to establish a joint venture for its retail operations in China, with Boyu holding up to 60% equity and Starbucks retaining 40% [1][20] - The joint venture is based on an enterprise value of approximately $4 billion, and Starbucks expects its retail business in China to exceed $13 billion [1][20] - The new joint venture will be headquartered in Shanghai and aims to expand the number of Starbucks stores in China from 8,000 to 20,000 [1][20] Group 2: Market Trends and Performance - The trend of international restaurant brands, including Starbucks and Pizza Hut, focusing on lower-tier cities is becoming increasingly significant due to better revenue prospects in these markets [3] - Starbucks has reported that new stores opened in the last two years have contributed to same-store sales growth above average, with many of these new locations in lower-tier markets [3] - Yum China reported a 4% year-over-year revenue growth to $3.2 billion in Q3 2025, with KFC and Pizza Hut also showing positive revenue trends [3] Group 3: Consumer Behavior and Pricing - There is a noted decline in average transaction value for Starbucks, Pizza Hut, and KFC, which may benefit their expansion into lower-tier markets [5] - The overall dining market in major cities like Beijing and Shanghai is contracting, prompting brands to seek growth in less saturated markets [4]

Core Insights - The recent drop in temperatures across China has led to a surge in hot pot consumption, prompting the company to prepare for the peak season [1] - The company has launched its innovative "Selected Single Order + Unlimited Eating" dual ordering model in over 130 locations nationwide [1] - The new menu features an expanded selection of dishes, with significant increases in the number of items across various price tiers, all while maintaining the same price [1][2] Group 1 - The company’s brand, Cuocuo, has introduced the "Selected Single Order + Unlimited Eating" model to cater to diverse consumer needs through flexible ordering [1] - The dual ordering model was first tested in September in cities like Beijing and Shanghai, achieving high rankings on local dining platforms [1] - The menu expansion includes an increase from 87 to 94 items in the 158 RMB tier, from 99 to 107 items in the 198 RMB tier, and from 117 to 121 items in the 258 RMB tier [1] Group 2 - The company has launched a new dish, "Imperial Style Spicy Chicken Feet Pot," along with several other meat and vegetable options that reflect regional specialties [2] - The supply chain management system combines centralized control with regional operations, ensuring fresh ingredients and menu flexibility [2] - The company acquired a meat processing company in 2019, which has a large organic pasture and significant processing capacity, enhancing its supply chain stability [2]

Core Insights - The company Xiabuxiabu's mid-to-high-end hot pot brand, Coucou, has launched a nationwide "selected single point + unlimited eating" dual-point model in 130 stores [1] - The new unlimited menu features an expanded selection, increasing the number of high-quality dishes from 87 to 94 in the 158 RMB tier, from 99 to 107 in the 198 RMB tier, and from 117 to 121 in the 258 RMB tier [1] Summary by Sections - **Menu Expansion**: The new unlimited menu includes innovative dishes such as "Imperial Style Spicy Chicken Feet Hot Pot" and various new meat options like Coucou's signature beef rolls and spicy beef [1] - **Supply Chain Management**: The company employs a "centralized control + regional operation" supply chain management system, sourcing locally to ensure freshness and flexibility in menu offerings [1] - **Regional Adaptation**: In regions like South China, the menu has been enhanced with local specialties such as colorful potatoes and fresh vegetable options, showcasing a blend of national integration and regional characteristics [1] - **Market Positioning**: The dual-point model allows consumers to choose between "precise single ordering" and "unlimited eating within a time limit," differentiating Coucou from traditional single self-service or single-point models in the market [1]

Core Insights - The company, Xiaobuxiang Group, has launched a nationwide rollout of its innovative "Selective Single Order + Unlimited Enjoyment" dual ordering model across 130 stores, enhancing consumer dining experiences [1][2] - The new menu features an expanded selection of 121 items, maintaining the same price for unlimited dining, thus providing more choices for consumers [1][2] Expansion of Dual Ordering Model - The dual ordering model was initially introduced in September in 46 stores across major cities like Beijing and Shanghai, receiving positive consumer feedback [2] - The unlimited dining menu has been significantly enriched, with the 158 RMB tier increasing from 87 to 94 items, the 198 RMB tier from 99 to 107 items, and the 258 RMB tier from 117 to 121 items [2] Menu and Product Upgrades - The core competitive advantage of Xiaobuxiang lies in its "rich broth" offerings, which now include the newly developed "Premium Taiwanese Spicy Chicken Feet Hot Pot" [3] - The menu has been enhanced with high-quality meat options and local specialty vegetables, showcasing a blend of national integration and regional characteristics [3] Supply Chain Management - The company employs a centralized control and regional operation supply chain management system, ensuring fresh ingredients and flexible menu options [3][4] - The sourcing strategy includes direct procurement from the source, with strategic partnerships established in quality production areas to ensure stable quality and cost advantages [3][4] Quality Control and Innovation - Xiaobuxiang Group controls the quality and safety of its ingredients through its own organic farms and vegetable bases, supported by a mature supply chain developed over nearly 30 years [4] - The continuous innovation in the dual ordering model and product matrix aims to provide consumers with a more flexible and diverse dining experience, reinforcing the brand's leadership in the hot pot industry [4]

Core Viewpoint - Huaxing Securities maintains a "Hold" rating on Xiaobuxiang (00520) with a target price of HKD 1.00, corresponding to 0.2 times the 2026 P/S ratio [1] Financial Projections - The company is expected to see revenue changes from 2025 to 2027 with a decline of 15.0% in 2025, followed by growth of 3.0% in 2026 and 2.0% in 2027, reaching revenues of CNY 4.04 billion, CNY 4.16 billion, and CNY 4.25 billion respectively [1] - Projected net losses attributable to shareholders are CNY 145 million in 2025 and CNY 66 million in 2026, with a small net profit of approximately CNY 240 thousand anticipated in 2027 [1] Store Count Analysis - The number of Xiaobuxiang brand stores peaked at 1,061 in 2020 and has since been declining, expected to bottom out at 760 stores in 2024, with a slight increase to 763 stores in the first half of 2025 [1] - The Coucou brand reached a peak of 257 stores in 2023 but began to decline, with projections showing a reduction to 197 stores in 2024 and further down to 174 stores in the first half of 2025 [1] Investment Opportunities - The company suggests that if the number of Xiaobuxiang stores continues to increase or stabilizes at the first half of 2025 levels, it may indicate that a phase of adjustment has been completed, warranting attention to future developments [1] - The Coucou brand's store count has not yet reached its bottom, and monitoring its recovery could signal improvements in the company's fundamentals, historically indicating a higher probability of marginal improvement rather than continued decline [1]

Core Viewpoint - Huaxing Securities maintains a "Hold" rating on Xia Bo Xia Bo (00520) with a target price of HKD 1.00, corresponding to 0.2 times the 2026 P/S ratio [1] Revenue Forecast - The company is expected to see revenue changes from 2025 to 2027 with a decline of 15.0% in 2025, followed by growth of 3.0% in 2026 and 2.0% in 2027, reaching revenues of CNY 40.4 billion, CNY 41.6 billion, and CNY 42.5 billion respectively [1] Net Profit/Loss Projections - The forecast indicates net losses attributable to shareholders of CNY 145 million in 2025 and CNY 66 million in 2026, with a projected net profit of approximately CNY 240 million in 2027 [1] Store Count Analysis - The number of Xia Bo Xia Bo stores peaked at 1,061 in 2020 and has been in decline, expected to bottom out at 760 stores in 2024. As of the first half of 2025, the store count has slightly increased to 763 [1] - If the store count continues to increase or stabilizes at the first half of 2025 level, it may indicate that a phase of adjustment has been completed, warranting attention to the company's future development [1] Coucou Brand Performance - The Coucou brand reached a peak of 257 stores in 2023 but has since begun to decline, with store numbers expected to drop to 197 in 2024 and further to 174 in the first half of 2025 [1] - The analysis suggests that the Coucou brand's store count has not yet bottomed out, and its future development should be monitored [1] Investment Opportunities - Historically, when the company's fundamentals have bottomed out, the likelihood of marginal improvement is significantly higher than the risk of continued decline, indicating potential investment opportunities as the Coucou brand stabilizes and recovers [1]

Group 1 - The core point of the article is that He Guangqi increased his stake in Xia Bo Xia Bo (00520) by purchasing 1 million shares at an average price of 0.9982 HKD per share, totaling 999,820 HKD [1] - After the transaction, He Guangqi's total shareholding in Xia Bo Xia Bo reached approximately 429 million shares, representing a 39.50% ownership stake [1] - The transaction involved other related parties, specifically Chen Suying [1]