Investment Rating - Maintain "Overweight" rating [1] Core Views - The company's same-store sales for major brands (Tai Er, Song Hotpot, and Jiumaojiu) showed double-digit declines in 3Q24, but the bottom of same-store performance has been confirmed [1] - Tai Er's average customer spending stabilized QoQ, while Song Hotpot and Jiumaojiu brands saw narrowing declines [1] - The company is expected to benefit from cost-side improvements and potential demand recovery driven by macro stimulus policies [1] - The company's net profit attributable to the parent company is forecasted to be RMB 190 million, RMB 280 million, and RMB 330 million for 2024E, 2025E, and 2026E, respectively, with P/E ratios of 24X, 16X, and 13X [1] Financial Performance - Revenue for 2024E, 2025E, and 2026E is projected to be RMB 6,156 million, RMB 7,023 million, and RMB 7,904 million, with growth rates of 2.84%, 14.08%, and 12.55%, respectively [3] - Net profit attributable to the parent company for 2024E, 2025E, and 2026E is expected to be RMB 185 million, RMB 275 million, and RMB 334 million, with growth rates of -59.15%, 48.59%, and 21.33%, respectively [3] - ROE (attributable to the parent company) is forecasted to be 5.26%, 7.25%, and 8.09% for 2024E, 2025E, and 2026E, respectively [3] Operational Highlights - Tai Er's same-store sales declined by 18.3% YoY in 3Q24, with a stable average customer spending of RMB 69 and a turnover rate of 3.6 times [1] - Song Hotpot's same-store sales declined by 32.5% YoY in 3Q24, with a narrowing decline of 4.1 percentage points QoQ and a turnover rate of 3 times [1] - Jiumaojiu's same-store sales declined by 10.3% YoY in 3Q24, with a narrowing decline of 2.3 percentage points QoQ and a turnover rate of 2.8 times [1] - The total number of Tai Er stores reached 654 by the end of 3Q24, with 642 directly operated stores and 12 franchised stores [1] - The total number of Song Hotpot stores reached 79 by the end of 3Q24, with 6 new stores added in Q3 [1] - The total number of Jiumaojiu stores remained unchanged at 72 by the end of 3Q24 [1] Future Outlook - The company expects cost-side improvements, particularly in labor and rental costs, to provide operational leverage [1] - The company anticipates demand recovery in Q4 due to lower YoY comparables and macro stimulus policies introduced since late September [1]

Investment Rating - The report maintains an "Outperform" rating for the company [1] Core Views - The company's main brands, including Tai Er, Song, and Jiu Mao Jiu, have maintained steady expansion, with a high likelihood of achieving the full-year expansion targets [2][4] - The company has adjusted its menu to offer more cost-effective products and optimized costs at both the store and headquarters levels, which could contribute to future growth [9] - The company's PE valuation for 2024 is around 20x, which is at the bottom of its historical range, indicating potential for strong profit elasticity if turnover rates improve [9] Expansion and Performance - As of Q3 2024, Tai Er, Song, and Jiu Mao Jiu had 654, 79, and 72 stores respectively, with Tai Er opening 68 new stores in the first three quarters of 2024 [2][4] - The company adjusted its full-year store opening plan for Tai Er to 93 stores (80 in mainland China and 13 overseas) and for Song to 25 stores, which is considered highly achievable [2][4] - The average customer spending per visit for Tai Er, Song, and Jiu Mao Jiu in Q3 2024 was 69, 97, and 54 yuan respectively, with Song experiencing a larger decline due to increased group dining during the summer [2][4] - The turnover rates for Tai Er, Song, and Jiu Mao Jiu in Q3 2024 were 3.6, 3.0, and 2.8 times respectively, showing marginal improvement compared to Q2 [2][4] - Same-store sales for Tai Er, Song, and Jiu Mao Jiu in Q3 2024 were -18.3%, -32.5%, and -10.3% respectively, indicating a bottoming out of the decline compared to Q2 [2][4] Brand Optimization and Innovation - The company has sold off non-core brands such as "Na Wei Da Shu Shi Da Chu" and "Lai Mei Li" to focus on its core brand portfolio [3][6] - Tai Er has opened over 30 "satellite stores" in cities like Guangzhou, Shenzhen, Shanghai, and Xiamen, with plans to expand further. These stores are compact, focusing on takeout services, and are expected to complement traditional mall stores [3][8] Financial Forecasts - The report revised the company's revenue forecasts for 2024-2026 to 6.315, 7.281, and 8.738 billion yuan respectively, with net profits adjusted to 219, 292, and 384 million yuan [9] - The PE ratios for 2024-2026 are projected at 20x, 15x, and 12x respectively, reflecting the impact of cost pressures and external operating environment challenges [9]

Financial Performance - Jiumaojiu International Holdings Limited reported a significant increase in revenue, achieving HK$1.2 billion for the first half of 2024, representing a 25% year-over-year growth[3]. - Revenue for the six months ended June 30, 2024, was RMB 3,064,227, an increase of 6.4% from RMB 2,879,422 in the same period of 2023[21]. - Profit for the period decreased to RMB 67,970,000 in 2024 from RMB 238,401,000 in 2023, reflecting a decline of 71.5%[184]. - The total comprehensive income for the period was RMB 86,510,000, down from RMB 320,934,000 in the previous year, indicating a decrease of 73%[186]. - Adjusted net profit for the period was RMB 77,154, a decrease of 69.1% from RMB 247,887 in the same period last year[21]. - The Group's revenue increased by 6.4% from RMB 2,879.4 million for the six months ended June 30, 2023, to RMB 3,064.2 million for the same period in 2024[53]. - The Group recorded revenue of RMB 3,064.2 million for the six months ended June 30, 2024, representing an increase of 6.4% compared to RMB 2,879.4 million for the corresponding period in 2023[26]. Customer Engagement and Market Expansion - The company expanded its user base, reaching 1.5 million active customers, a 30% increase compared to the previous year[3]. - Future outlook indicates a projected revenue growth of 20% for the second half of 2024, driven by new product launches and market expansion strategies[3]. - Jiumaojiu plans to open 50 new locations across China by the end of 2024, aiming to increase market penetration[3]. - The Group opened 59 new restaurants in the first half of 2024, including 38 Tai Er restaurants and 13 Song Hot Pot restaurants[28]. - The Group plans to open 25 new Song Hot Pot restaurants and 80 new Tai Er restaurants (self-operated) in mainland China in 2024, along with 13 new Tai Er restaurants (self-operated) outside mainland China[45]. Operational Efficiency and Cost Management - Gross profit margin improved to 65%, up from 60% in the previous year, reflecting better cost management and pricing strategies[3]. - The company has implemented a new digital ordering system, resulting in a 15% increase in order efficiency[3]. - The management remains committed to optimizing cost structures to mitigate the impact of declining profits[20]. - Staff costs rose by 24.6% from RMB 717.6 million to RMB 894.1 million, with staff costs as a percentage of revenue increasing from 24.9% to 29.2%[66]. - Depreciation of right-of-use assets increased by 26.1% from RMB 227.4 million to RMB 286.7 million, with depreciation as a percentage of revenue rising from 7.9% to 9.4%[67]. Strategic Initiatives and Investments - The company is investing HK$200 million in research and development for new product lines, focusing on enhancing customer experience and menu diversity[3]. - The Company is focusing on expanding its market presence and enhancing brand recognition through new product offerings and marketing strategies[20]. - Future strategies include leveraging data analytics to improve customer experience and operational efficiency[155]. - The Group has commenced the construction of a supply chain center in Southern China and a central kitchen in Eastern China to enhance supply chain capabilities[46]. - The Group continues to seek potential targets for investment in the catering service industry to create synergies with its business[45]. Financial Position and Liabilities - The Group's total assets increased from RMB 6,520.9 million as of December 31, 2023, to RMB 6,525.2 million as of June 30, 2024[118]. - Total liabilities rose from RMB 3,163.9 million as of December 31, 2023, to RMB 3,359.9 million as of June 30, 2024, resulting in a liabilities-to-assets ratio increase from 48.5% to 51.5%[121]. - Cash and cash equivalents decreased by 32.4% from RMB 1,326.9 million as of December 31, 2023, to RMB 897.2 million as of June 30, 2024[122]. - Lease liabilities increased by 5.3% from RMB 2,084.5 million as of December 31, 2023, to RMB 2,194.5 million as of June 30, 2024, mainly due to restaurant network expansion[127]. Shareholder Information and Corporate Governance - The Board did not recommend the payment of an interim dividend for the six months ended June 30, 2024, consistent with the previous year where no dividend was paid[134]. - The Company has complied with all provisions of the Corporate Governance Code during the six months ended June 30, 2024, except for a deviation from code provision C.2.1[166]. - The Audit Committee consists of three independent non-executive Directors, ensuring independent review of the Group's financial information and internal controls[169]. - The Company emphasizes maintaining high standards of ethics, transparency, and accountability in its operations[166]. - The Group's success depends on its ability to attract, retain, and motivate qualified personnel[134]. Share Repurchase and Stock Options - As of June 30, 2024, the company repurchased 21,459,000 shares, representing 1.50% of the issued shares, at an aggregate cost of approximately HKD 93.2 million (approximately RMB 84.9 million)[160]. - The share repurchase occurred at prices ranging from HKD 3.91 to HKD 5.47 per share, with the highest price being HKD 5.47 and the lowest HKD 3.91[164]. - The number of shares available for further grant under the Share Option Scheme increased from 118,167,100 on January 1, 2024, to 119,083,600 on June 30, 2024, representing 8.31% of the total shares in issue[158]. - The share options granted on November 3, 2023, will vest on November 3, 2024, after a 12-month period[157]. - The company believes that the share repurchase reflects confidence in its long-term business prospects and aims to create value for shareholders[160].

Investment Rating - The report assigns a rating of "Accumulate" to the company, down from a previous rating of "Buy" [4]. Core Views - The company continues to expand its restaurant network cautiously, facing challenges in store operations due to external environmental factors. Same-store sales have declined, impacting current performance [2][3]. - The company has reported a revenue of 3.064 billion yuan for H1 2024, a year-on-year increase of 6.4%, while the net profit attributable to shareholders decreased by 67.5% to 72 million yuan [1][3]. - The company is focusing on optimizing its brand portfolio and enhancing supply chain capabilities, with plans to accelerate expansion through franchise and partnership models [7]. Summary by Sections Financial Performance - For H1 2024, the company achieved a revenue of 3.064 billion yuan, with a breakdown by brand showing Taier at 2.248 billion yuan (+2.7%), Jiamao at 0.292 billion yuan (-8.1%), Song Hotpot at 0.431 billion yuan (+22.7%), and other brands at 0.092 billion yuan (+328.2%) [1]. - The same-store sales for Taier, Song Hotpot, and Jiamao decreased by 15.5%, 34.7%, and 8.5% respectively, with operating profit margins declining [2][3]. Operational Insights - As of H1 2024, the number of Taier restaurants reached 614, an increase of 118 year-on-year, while Jiamao saw a decrease of 3 restaurants to 72 [2]. - The company is adjusting its expansion targets for 2024, planning to open 25 new Song Hotpot restaurants and 80-100 new Taier restaurants in mainland China [3][7]. Future Projections - Revenue projections for 2024-2026 are estimated at 6.405 billion yuan, 7.356 billion yuan, and 8.377 billion yuan respectively, with net profits expected to be 213 million yuan, 349 million yuan, and 478 million yuan [8][13]. - The current stock price corresponds to a price-to-earnings ratio (P/E) of 14.9x for 2024, 9.1x for 2025, and 6.6x for 2026 [7][8].

Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Views - The company reported a revenue of 3.064 billion HKD for the first half of 2024, representing a year-on-year increase of 6.42%. However, the operating profit at the store level decreased by 31.7% to 393 million HKD, and the adjusted net profit fell by 68.88% to 77.154 million HKD [5]. - The company is facing pressure on customer traffic and average spending, with same-store sales declining across its brands. The company is adjusting its brand structure and exploring potential opportunities for expansion [5][6]. - The company is focusing on building a central kitchen to enhance supply chain capabilities and reduce costs, which is expected to improve profitability in the future [6]. Summary by Sections Revenue and Profitability - In the first half of 2024, the company achieved a revenue of 3.064 billion HKD, up 6.42% year-on-year. However, the operating profit decreased by 31.7% to 393 million HKD, and the adjusted net profit dropped by 68.88% to 77.154 million HKD [5]. Operational Performance - The company’s brands, including Tai Er, Song Hot Pot, and Jiu Mao Jiu, experienced a decline in table turnover rates and average spending. The table turnover rates were 3.8, 2.9, and 2.8 times per day, showing a year-on-year decrease of 0.5, 1, and flat respectively. Average spending per customer decreased by 5.3%, 9.1%, and 5.1% for the respective brands [5]. Store Expansion and Brand Structure - The company opened 59 new restaurants in the first half of 2024, including 38 Tai Er restaurants and 13 Song Hot Pot restaurants. The company plans to sell three restaurants and has adjusted its annual opening expectations [5]. Profit Margin and Cost Structure - The cost of raw materials and consumables accounted for 35.8% of total revenue, while employee costs rose to 29.2%. The restaurant-level profit margin and adjusted net profit margin were 13% and 2.5%, respectively, both showing a decline compared to the previous year [6]. Future Outlook - Revenue forecasts for 2024-2026 are projected at 6.277 billion, 7.225 billion, and 8.336 billion HKD, with net profits of 179 million, 239 million, and 305 million HKD respectively [6].

Investment Rating - The investment rating for the company is downgraded to Neutral with a target price of HKD 2.60, reflecting a cautious outlook on the industry and the company's performance challenges [2][5]. Core Insights - The company's revenue for the first half of 2024 was RMB 3.064 billion, a year-on-year increase of 6.4%. However, operating profit decreased by 32% to RMB 392 million, resulting in an operating profit margin of 12.8%, down from 20.0% in the same period of 2023 [1]. - Net profit attributable to shareholders fell by 67.5% to RMB 72.29 million, with a net profit margin dropping over 5 percentage points to 2.36% [1]. - Despite the opening of 59 new restaurants in the first half of 2024, the overall performance remained under pressure, particularly for the main brand, which saw declines in key metrics such as table turnover rate and same-store sales [1][2]. Summary by Sections Financial Performance - Revenue for 2024 is projected to be RMB 6.499 billion, with a growth rate of 8.6%. Net profit is expected to be RMB 257 million, a decrease of 43.3% compared to the previous year [4][6]. - The company has decided not to distribute an interim dividend due to the significant drop in net profit [1]. Store Expansion and Guidance - The company has adjusted its store opening guidance, planning to open only 80 new restaurants in mainland China and 13 overseas, down from previous targets of 80-100 and 15-20 respectively [1][2]. - The performance of the main brand, which accounts for 73% of revenue, has been negatively impacted by a decline in table turnover rate from 4.3 to 3.8, marking the lowest since 2019 [1]. Market Context - The report reflects a cautious stance on the restaurant industry, noting that competition remains intense and the overall consumer environment is weak, which has contributed to the downward revision of performance expectations [2][5].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 3.7, indicating a potential upside of 50% from the current stock price of HKD 2.49 [3][8]. Core Insights - The company reported a revenue of RMB 3.06 billion for the first half of 2024, a year-on-year increase of 6.4%, but net profit fell by 71% to RMB 68 million due to a challenging consumer environment [1]. - The report anticipates a decline in net profit for 2024, 2025, and 2026, projecting RMB 240 million, RMB 290 million, and RMB 320 million respectively, with corresponding EPS of HKD 0.20, HKD 0.24, and HKD 0.27 [1][14]. - The company is expanding its store count, with a total of 771 stores as of June 2024, an increase of 45 stores from the end of 2023, primarily through its brands Tai Er and Song Hotpot [1]. Financial Performance Summary - Tai Er's revenue for the first half of 2024 was RMB 2.24 billion, a decrease of 1.6%, with an operating profit margin of 13.8%, down 7.5 percentage points year-on-year [1]. - Song Hotpot's revenue was RMB 430 million, down 5%, with an operating profit margin of 8.6%, a decline of 5.1 percentage points [1]. - The overall gross margin improved to 64.2%, up 0.4 percentage points year-on-year, attributed to lower raw material costs and economies of scale from the central kitchen [1][15]. Future Projections - The company plans to open 80 new stores domestically and 13 overseas in 2024, although the pace of expansion has slightly slowed compared to earlier plans [1]. - The report projects a modest revenue growth rate of 1.3% for 2024, followed by 14.1% and 12.8% for 2025 and 2026 respectively [15]. Valuation Analysis - The report employs both comparable company analysis and DCF methods for valuation, concluding a target price of HKD 3.7 based on a PE multiple of 13x for 2025 projected EPS of HKD 0.24 [8][10]. - The DCF analysis suggests a fair value of HKD 4.3, indicating a significant upside potential [8][11].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 2.61, based on a 15x PE for 2024 [2][4]. Core Insights - The company has issued a mid-year earnings forecast indicating performance below expectations, with projected revenue of CNY 3.064 billion (+6.4%) and a net profit of no less than CNY 67 million (-69.8%) for H1 2024. This decline is attributed to high base effects from the previous year, changes in consumer habits due to external factors, and delayed cost control measures leading to negative operating leverage [1]. - The company is strengthening its partnership with Meituan by opening satellite stores, with plans to establish 50 new brand satellite stores in 2024. Meituan will provide commission rebates and operational support for these new stores [1]. - The company is introducing lower-priced menu items to attract a diverse customer base, significantly reducing prices for its signature dishes and rice to enhance value perception among consumers [1]. Financial Summary - The company’s revenue for 2024 is projected at CNY 6.065 billion, with a growth rate of 1.3%. The operating profit is expected to be CNY 429 million, reflecting a decline of 45.4% year-on-year. The net profit attributable to the parent company is forecasted at CNY 220 million, down 51.6% [3][7]. - Earnings per share (EPS) for 2024 is estimated at CNY 0.16, with subsequent projections of CNY 0.23 in 2025 and CNY 0.28 in 2026 [2][3]. - The gross margin is expected to be 62.5% in 2024, with a net margin of 3.6% [3][7].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company reported a revenue of 3.064 billion yuan for H1 2024, representing a year-on-year increase of 6.4%, while the net profit attributable to shareholders was 72 million yuan, a decrease of 67.5% year-on-year [3] - The company is facing pressure on profit margins due to weak demand, with a net profit margin of 2.4% for H1 2024, down 5.36 percentage points year-on-year [3] - The company is adjusting its expansion strategy, lowering its store opening targets due to the complex external environment [4] Financial Summary - Total revenue (in million yuan) is projected to be 6,357 in 2024E, with a year-on-year growth of 6.2% [2] - The net profit attributable to shareholders is expected to be 180 million yuan in 2024E, reflecting a significant decrease of 60.4% year-on-year [2] - The latest diluted EPS is projected to be 0.13 yuan per share for 2024E, with a P/E ratio of 18 [2] Brand Performance - The brand "Tai Er" achieved a revenue of 2.248 billion yuan in H1 2024, with a store operating profit margin of 13.8%, down 7.5 percentage points year-on-year [4] - "Song Hot Pot" reported a revenue of 431 million yuan in H1 2024, with a store operating profit margin of 8.6%, down 5.1 percentage points year-on-year [4] - The company has seen a decrease in customer traffic and profitability across its brands due to external demand weakness [4] Store Expansion Strategy - The company has revised its store opening targets for the year, with "Tai Er" planning to open 80 new stores in mainland China, down from the original target of 80-100 [4] - "Song Hot Pot" plans to open 25 new stores, reduced from 35-40 [4] Profit Forecast - The company’s net profit forecasts for 2024, 2025, and 2026 are 180 million, 231 million, and 302 million yuan respectively, reflecting a downward adjustment due to ongoing operational pressures [5] - The dynamic P/E ratios for the company are projected to be 18, 14, and 11 for 2024, 2025, and 2026 respectively [5]

Investment Rating - The report downgrades the investment rating of Jiujiu (9922 HK) to "Overweight" from a previous higher rating, reflecting the company's short-term performance pressure but acknowledging its potential for stable growth post-adjustments [5] Core Views - Jiujiu's H1 2024 performance was under pressure, with revenue increasing by 6 4% YoY to RMB 3 064 billion, but net profit attributable to shareholders plummeting by 67 5% YoY to RMB 72 291 million [3] - The company faced challenges with declining demand, leading to both volume and price drops across its major brands, including Tai Er, Song Hotpot, and Jiujiu [3] - Jiujiu has adjusted its full-year store opening guidance downward due to weak consumer demand and intensified industry competition, with Tai Er and Song Hotpot reducing their expansion plans [4] Performance by Brand Tai Er - H1 2024 revenue increased by 2 7% YoY to RMB 2 248 billion, but same-store sales declined by 15 5% YoY [3] - The brand added 36 new stores, bringing the total to 614 nationwide, but saw a decline in key metrics such as seat turnover rate (down to 2 7 times/day from 3 1 times/day in H1 2023) and table turnover rate (down to 3 8 times/day from 4 3 times/day) [3] - Average customer spending decreased by RMB 4 to RMB 71, reflecting menu and pricing adjustments [3] Song Hotpot - H1 2024 revenue grew by 22 5% YoY to RMB 431 million, but same-store sales dropped sharply by 34 7% YoY [3] - The brand added 11 new stores, but experienced declines in seat turnover rate (down to 2 0 times/day from 2 8 times/day) and table turnover rate (down to 2 9 times/day from 3 9 times/day) [3] - Average customer spending decreased by RMB 11 to RMB 110 [3] Jiujiu - H1 2024 revenue decreased by 8 1% YoY to RMB 292 million, with same-store sales down by 8 5% YoY [3] - The brand closed 5 stores during the period, but saw a slight improvement in seat turnover rate (up to 1 8 times/day from 1 7 times/day) [3] - Average customer spending decreased by RMB 3 to RMB 56 [3] Cost Structure - Employee costs as a percentage of revenue increased significantly by 4 3 percentage points YoY to 29 2% in H1 2024, driven by store network expansion and preparations for a new central kitchen [4] - Raw material costs as a percentage of revenue decreased slightly by 0 4 percentage points to 35 8%, benefiting from reduced procurement costs [4] - The company's net profit margin dropped by 5 4 percentage points YoY to 2 4% in H1 2024 [4] Strategic Adjustments - Jiujiu has opened up franchising for Tai Er and its new brand Shan Waimian to accelerate regional and international expansion [4] - The company is focusing on product quality improvement, menu diversification, and promotional activities to attract customers and increase repeat purchases [4] - Song Hotpot has simplified its brand positioning and is focusing on the Guangdong market, while planning to close some underperforming stores in other regions [4] Financial Forecasts - The report significantly lowers Jiujiu's net profit forecasts for 2024-2026, with 2024 estimates reduced by 68% to RMB 210 million [5] - The company's PE ratios for 2024-2026 are projected at 15x, 10x, and 8x respectively, reflecting the current valuation levels [5]