HAIDILAO(06862) 浦银国际证券·2024-10-15 04:37Investment Rating - Upgraded to "Buy" rating for Haidilao (6862 HK) with a target price of HKD 19 5 based on 19x 2025 P/E or 10x 2025 EV/EBITDA [2] Core Views - Haidilao's multi-brand strategy visibility has improved with the new brand "Yanqing" expected to accelerate store openings in the next two years [2] - The company plans to open 40-50 new stores in 2H24 and expects net store growth for the full year with annual store openings reaching mid-to-high single-digit percentages of existing stores in 2025-2026 [2] - The new brand "Yanqing" is expected to leverage synergies with Haidilao in procurement labor and rental costs with plans to open 50 stores in 2024 and 150 stores in 2025 [2] - Haidilao's main brand is expected to see stable performance with a slight improvement in operating profit margin in 2H24 due to optimized employee incentives and stable or slightly increased average customer spending [2] Financial Performance and Forecast - Revenue is expected to grow by 7 5% in 2024E reaching RMB 44 571 million with a slight increase to RMB 46 505 million in 2025E [6] - Net profit attributable to shareholders is forecasted to remain flat in 2024E at RMB 4 498 million but grow by 12 2% in 2025E to RMB 5 047 million [6] - Operating profit margin is projected to improve from 12 3% in 2024E to 12 8% in 2025E [6] - Gross margin is expected to increase from 60 8% in 2024E to 60 9% in 2025E [6] Store Expansion and Operational Metrics - Haidilao opened 11 new stores in 1H24 but closed 43 stores resulting in a net decrease of 32 stores to a total of 1 343 stores [2] - The company plans to accelerate store openings in 2H24 with 40-50 new stores and reduce store closures to single digits [2] - The overall table turnover rate remained stable in July-August 2024 with a slight decline in September but exceeded 5 times per day during the National Day holiday [2] New Brand "Yanqing" - The new brand "Yanqing" is expected to benefit from synergies with Haidilao in procurement labor and rental costs [2] - Management plans to open "Yanqing" stores near existing Haidilao locations and utilize Haidilao store managers for multi-brand management [2] - The company aims to open 50 "Yanqing" stores in 2024 and expand to 150 stores in 2025 with a long-term goal of 300-400 stores in 3-5 years [2] Market Expectations and Valuation - The market expectation for Haidilao's stock price ranges from HKD 12 4 to HKD 26 2 with SPDBI's target price set at HKD 19 5 [4] - The stock's current price is HKD 16 6 with a total market capitalization of HKD 92 640 million [3]