Investment Rating - The report maintains a "BUY" rating for Haidilao with a target price of HK$21.52, indicating a potential upside of 46.6% from the current price of HK$14.68 [5][7]. Core Views - The management change at Haidilao, with Yang Lijuan resigning as CEO and Gou Yiqun taking over, is viewed as neutral for the company's operations, which continue to improve [2][3]. - Haidilao's financial performance has exceeded expectations, with significant improvements in table turnover rates and successful completion of operational programs [3]. - The company is confident in achieving its FY24E target of single-digit percentage growth in new store openings, despite a slow expansion pace in the near term [7]. Financial Summary - Revenue is projected to grow from RMB 41,453 million in FY23A to RMB 47,018 million in FY24E, reflecting a year-on-year growth of 13.4% [4]. - Net profit is expected to increase from RMB 4,495.4 million in FY23A to RMB 4,996.6 million in FY24E, with a diluted EPS of RMB 0.89 for FY24E [4][8]. - The company’s P/E ratio is projected to decrease from 16.9x in FY23A to 15.3x in FY24E, indicating an attractive valuation for long-term investors [4][9]. Operational Insights - Haidilao has successfully reopened 50 to 100 previously closed stores, contributing to a remarkable table turnover rate of approximately 4.3 times in the first five months of 2024 [3]. - The introduction of new products and enhanced customer engagement strategies have positively impacted the brand's market presence and customer loyalty [3]. - The potential for new store openings is bolstered by the upcoming launch of franchising stores and the success of campus stores [3]. Market Position - Haidilao's market capitalization stands at HK$81,826.3 million, with significant shareholding by Mr. Zhang Yong (60.4%) and Mr. Shi Sean (9.4%) [4]. - The stock has shown a relative performance of -20.6% over the past month, indicating a potential buying opportunity for investors [4][5].

Investment Rating - The report maintains a "Hold" rating for Haidilao (6862.HK) due to high current valuation despite strong recovery in table turnover rates [1]. Core Views - Haidilao has shown a strong recovery in table turnover rates, outperforming other players in the restaurant sector, attributed to effective marketing strategies and store management [1]. - The company is expected to face short-term challenges with a slowdown in table turnover growth in 2Q24 and a decline in profit margins in 1H24 due to high base effects [1]. - The current valuation is considered high, with 11x 2024E EV/EBITDA and 20x 2024E P/E, leading to potential downside risks for the stock price [1]. Financial Performance and Forecast - Revenue is projected to grow from 41,453 million RMB in 2023 to 46,861 million RMB in 2024, reflecting a 13% year-on-year increase [2][4]. - Net profit is expected to increase from 4,499 million RMB in 2023 to 5,018 million RMB in 2024, representing an 11.5% year-on-year growth [2][4]. - The operating profit margin is forecasted to slightly expand in 2024, despite facing pressure in 1H24 due to increased labor costs [1][4]. Store Expansion Plans - Haidilao plans to open between 60 to 100 new stores in 2024, primarily in second-tier cities, with a focus on the second half of the year [1]. - The company has opened only 4 new stores year-to-date, indicating a cautious approach to expansion [1]. Customer Metrics - The average customer spending is expected to rise to approximately 102 RMB in 2024, up from 99 RMB in 2023 [1]. - The overall table turnover rate is anticipated to exceed 30% year-on-year growth in 1Q24, with expectations of maintaining a high range of 3-4 times in 2Q24 [1].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][23]. Core Views - The company is experiencing a high level of operational performance against industry trends, with significant growth in customer traffic and revenue, particularly in lower-tier markets [1][4]. - The company's revenue for 2023 reached 41.6 billion yuan, and net profit attributable to shareholders was 4.5 billion yuan, both marking new highs since its listing [2][4]. Summary by Sections Company Performance - From May 1 to May 4, the company received approximately 7.5 million customers, a year-on-year increase of about 15% [1]. - The company's table turnover rate has shown a remarkable recovery, with rates for the second half of 2023 reaching 120% to 200% compared to the same period in 2022 [2][4]. Organizational Changes - The company has implemented a new compensation structure for management, shifting from a "high base salary + low commission" model to a "low base salary + high commission" model, which has motivated store managers to improve operational efficiency [7][11]. - The average number of employees per store has been optimized, reducing costs and improving profitability, with the break-even point for table turnover decreasing from 3.0 to approximately 2.5 times [11][12]. Supply Chain Efficiency - The company benefits from a robust supply chain, which includes subsidiaries focused on logistics, seasoning, and human resources, enhancing cost control and quality management [12][14]. Future Outlook - The market remains cautious about the company's ability to further increase table turnover rates and expand its store network in 2024, but there are positive indicators for continued growth [3][16]. - The company has resumed store expansion, opening 9 new standard stores and 26 existing stores in 2023, and is exploring new store formats and a franchise model [20][23]. New Brand Development - The company launched a new sub-brand, "Hi Lao Hotpot," aimed at the budget segment, and is also venturing into the barbecue market with a new brand in Xi'an [20][22]. Financial Projections - The projected net profit for 2024-2026 is 5.17 billion, 5.74 billion, and 6.33 billion yuan, respectively, with corresponding growth rates of 15%, 11%, and 10% [23][27].

Summary of Conference Call Company and Industry Involved - The conference call involves Tianfeng Commerce, a company in the commerce sector [1]. Core Points and Arguments - The analysis manager, Ross Lee, addressed investors, indicating a focus on investor relations and communication strategies [1]. Other Important but Possibly Overlooked Content - No specific financial data, industry trends, or detailed insights were provided in the excerpt [1].

Revenue Growth - Group revenue increased by 33.6% from RMB31,038.6 million in 2022 to RMB41,453.3 million in 2023[48] - Haidilao restaurant operation accounted for 94.7% of total revenue in 2023, with revenue increasing by 35.7% from RMB28,942.6 million in 2022 to RMB39,266.6 million in 2023[51] - Revenue from sales of condiment products and food ingredients increased from RMB662.2 million in 2022 to RMB788.7 million in 2023, accounting for 1.9% of total revenue[50] Customer Spending - Average spending per guest decreased from RMB104.9 in 2022 to RMB99.1 in 2023, primarily due to increased price concessions[51] - Average spending per guest in Tier 1 cities decreased from RMB114.2 in 2022 to RMB105.7 in 2023[53] - Average spending per guest in Tier 2 cities decreased from RMB104.3 in 2022 to RMB98.3 in 2023[53] - Average spending per guest in Tier 3 cities and below decreased from RMB97.9 in 2022 to RMB92.8 in 2023[53] Operational Efficiency - Average table turnover rate for Haidilao restaurants in 2023 was 3.8 times per day, up from 3.0 times per day in 2022[51] - Table turnover rate in Hong Kong, Macau, and Taiwan regions increased from 3.5 times per day in 2022 to 4.2 times per day in 2023[53] Delivery Business - Revenue from delivery business decreased from RMB1,280.1 million in 2022 to RMB1,041.5 million in 2023, accounting for 2.5% of total revenue[50]

Investment Rating - The report gives a "Buy" rating to Haidilao (06862 HK) with a target price of HKD 19 88 per share based on a 20x PE multiple for 2024 [4] Core Views - Haidilao is the leader in the hotpot industry with a 30-year history and a market share ranking first in the industry As of the end of 2023 the company operated 1 374 Haidilao restaurants serving nearly 400 million customers [2] - The company has optimized its store model and improved operational efficiency after the "Woodpecker Plan" which involved closing or suspending some underperforming stores The turnaround rate reached 3 8 times in 2023 up 0 8 times year-on-year [2] - Haidilao's management model is a key driver of its success with a focus on employee incentives and decentralized decision-making This has enabled the company to maintain high service standards and innovate continuously [2] - The company has significant room for expansion in mainland China and is exploring new store formats themes and product categories to drive future growth [2] - The report forecasts Haidilao's net profit to grow by 13 7% 10 8% and 10 2% year-on-year from 2024 to 2026 reaching RMB 5 12 billion RMB 5 67 billion and RMB 6 25 billion respectively [2] Financial Summary - Revenue for 2023 was RMB 41 45 billion up 33 6% year-on-year with EBITDA of RMB 8 80 billion and net profit of RMB 4 50 billion a 227 3% increase [3] - The company's ROE was 39 0% in 2023 and is expected to remain strong at 31 9% 27 0% and 23 7% from 2024 to 2026 [3] - EPS for 2023 was RMB 0 83 and is projected to grow to RMB 0 92 RMB 1 02 and RMB 1 12 from 2024 to 2026 [3] Industry Overview - The hotpot industry is the largest segment in the Chinese dining market accounting for 14% of the total Chinese dining market in 2022 The market size reached RMB 529 3 billion in 2023 with Sichuan-style hotpot being the dominant category [18][19] - The industry is highly fragmented with the top five players accounting for less than 10% of the market Haidilao leads with a 5 8% market share in 2020 [31] - Hotpot is a highly standardized and scalable dining category with a strong social dining appeal making it suitable for chain expansion The industry's chain rate was 20 7% in 2021 higher than the overall dining industry's 18% [23] Company Overview - Haidilao was founded in 1994 and has grown to become a leading hotpot chain with 1 374 stores globally as of 2023 The company serves nearly 400 million customers annually and has 150 million registered members [36] - The company has gone through four stages of development: exploration (1994-2009) management transformation (2010-2016) rapid expansion (2017-2020) and operational adjustment (2021-present) [38] - Haidilao's core business is restaurant operations which accounted for over 95% of its revenue in 2023 Other businesses include delivery and condiment sales [43] Competitive Advantages - Haidilao's management model emphasizes employee incentives and decentralized decision-making enabling the company to maintain high service standards and innovate continuously [54] - The company's "mentorship system" encourages talent development and store expansion with store managers incentivized to train new managers and share in the profits of their mentees' stores [56] - Haidilao's service is a key differentiator with a focus on personalized and attentive customer experiences The company has also invested in technology to enhance the dining experience such as DIY hotpot bases and smart dining systems [63][64] Future Growth Drivers - Haidilao has significant room for expansion in mainland China with a focus on optimizing its store model and exploring new formats and themes [2] - The company is also exploring new growth opportunities such as night economy services and concert-related dining experiences to capture emerging consumer trends [66] - Haidilao's introduction of a franchise model in 2024 is expected to further accelerate its expansion and diversify its revenue streams [38]

Core Insights - The rising prices of hot pot bases have sparked significant public debate, with 75% of respondents considering a base price of over 60 yuan to be expensive [1][3] - The hot pot industry is experiencing intense competition, with a notable increase in new establishments and a higher rate of closures, indicating a challenging market environment [3][4][7] Industry Trends - In Q1 2024, 11,400 new hot pot-related businesses were registered, while 12,700 were closed, highlighting the competitive pressure in the sector [3] - The trend of aggressive expansion by hot pot brands continues, with some offering zero franchise fees and substantial subsidies to attract franchisees [4][10] - The market is witnessing a shift towards lower-priced offerings, with many establishments engaging in price wars to attract customers, leading to reduced profit margins [9][11] Consumer Behavior - Consumers are increasingly sensitive to pricing, with many expressing dissatisfaction over high base prices for hot pot, leading to a decline in patronage [1][6] - The emergence of alternative dining options, such as small hot pots and street food, is fragmenting consumer demand and further intensifying competition [9][10] Business Challenges - Many hot pot establishments are struggling to maintain profitability, with reports of significant losses shortly after opening, indicating a high-risk environment for new entrants [4][6] - The oversaturation of the market, particularly in densely populated areas, is making it difficult for new businesses to attract and retain customers [6][7] Future Outlook - Industry experts predict that the hot pot sector will continue to face challenges in 2024, with ongoing competition and a potential for further market consolidation [4][10] - The focus on brand differentiation and understanding consumer needs will be crucial for survival in an increasingly competitive landscape [10][11]

Investment Rating - The report maintains a "Buy" rating for Haidilao with a target price of HK$20.51, representing a potential upside of 16% from the current price of HK$17.64 [1][2][4]. Core Views - Haidilao is expected to achieve revenue and net profit growth of 11.4% and 15.1% respectively in 2024, reaching RMB 46.18 billion and RMB 5.18 billion [4][6]. - The company is positioned as a leading player in the industry with verified earnings certainty and excellent dividend yield, justifying a valuation premium [4][6]. - The report highlights the improvement in table turnover rate to 3.8 times per day in 2023, indicating a recovery to pre-pandemic levels, and anticipates further growth in 2024 [4][6]. Summary by Sections Financial Projections - Revenue for 2024 is projected at RMB 46.18 billion, with a net profit of RMB 5.18 billion, reflecting year-on-year growth of 11.4% and 15.1% respectively [7][12]. - Earnings per share (EPS) for 2024 is estimated at RMB 0.93, with subsequent years showing growth to RMB 1.04 in 2025 and RMB 1.15 in 2026 [6][7]. Market Position and Strategy - Haidilao's strategy includes opening 44 new stores in 2024 and enhancing customer retention and acquisition through targeted marketing strategies [4][5]. - The company has begun franchising, which is expected to contribute modestly to revenue in the short term, with projections of 25 franchise stores generating approximately RMB 2.2 billion in revenue [5][6]. Valuation and Market Capitalization - The report suggests a market capitalization range of HK$858 billion to HK$1,143 billion based on a P/E ratio of 15-20 times for 2024, with a midpoint of HK$1,000 billion compared to the current market cap of HK$983 billion [6][11]. - The adjusted target price of HK$20.51 corresponds to a 20 times P/E for 2024, reflecting a 15% reduction from the previous target price of HK$24.10 [2][6].

Investment Rating - The report maintains a BUY rating for Haidilao with a target price (TP) of HK$ 21.52, reflecting a 25.1% upside from the current price of HK$ 17.20 [2][4][9]. Core Insights - Haidilao's downside is protected by a 5.6% dividend yield for FY24E and a 90% payout ratio, while the upside is linked to the acceleration of store expansion once the franchising model is finalized [2][7]. - The company has shown strong momentum in 2024, with table turnover increasing by over 30% in January-February, despite a slight seasonal retreat in March [2][7]. - Management is targeting a single-digit percentage increase in store counts for FY24E, focusing on a cautious expansion strategy after lessons learned from previous overexpansion [2][7]. Financial Performance - In FY23, Haidilao's revenue increased by 34% YoY to RMB 41.5 billion, and net profit surged by 175% YoY to RMB 4.5 billion, both in line with prior positive profit alerts [7]. - The company has revised its FY24E and FY25E net profit forecasts upward by 12% and 15%, respectively, due to improved table turnover recovery and better sourcing costs [2][8]. - The operating profit margin is expected to increase to 14.6% in FY24E from 14.3% in FY23, driven by a lower breakeven point for table turnover [2][8]. Earnings Summary - Revenue projections for FY24E are set at RMB 47,018 million, with a YoY growth of 13.4% [3][12]. - Net profit for FY24E is estimated at RMB 4,996.6 million, reflecting a 10.6% increase from FY23 [3][12]. - The earnings per share (EPS) for FY24E is projected at RMB 0.89, with a P/E ratio of 16.0x [3][12]. Store Expansion and Strategy - The company currently has 13 stores with signed lease agreements, primarily in tier 2 cities, and plans to refine its franchising model to enhance local knowledge and capital utilization [2][11]. - The total number of restaurants is expected to grow to 1,424 by FY24E, with a focus on maintaining quality over rapid expansion [11].

港股公司报告 | 公司点评 海底捞（06862） 证券研究报告 2024年04月 03日 投资评级 23 年业绩符合预期、派息率升至 90%股息率接近 5%，看好基 行业 非必需性消费/旅游及 本面 α 延续和股东回报改善 消闲设施 6个月评级 买入（维持评级） 当前价格 18.06港元 公司发布2023年全年财报：2023年实现营业收入414.5 亿元/yoy+33.6%， 目标价格 港元 归母净利润 45.0 亿元/yoy+174.8%，对应归母净利率 10.85%。符合盈利预 告的收入414亿+、净利润不低于44 亿元的指引。 基本数据 单23H2来看：23H2实现营收225.7 亿元/yoy+42.1%，归母净利润22.4亿 港股总股本(百万股) 5,574.00 元/yoy+43.3%，归母净利率9.9%/yoy+0.1pct、环比-2.0pct。若剔除外汇收 港股总市值(百万港元) 100,666.44 每股净资产(港元) 2.28 益及亏损影响，23H1/23H2 归母净利润约20.7 亿/23.5 亿、23H2 环比 H1 资产负债率(%) 53.33 增长13.7%，23H1/23H2 归母 ...