Investment Rating - Maintain "Overweight" rating with a target price of HKD 1.32 [49][50] Core Views - The company is undergoing a period of adjustment and reform, with profitability under pressure and high uncertainty in the actual results of the reforms [2] - The target price is adjusted to HKD 1.32 based on a 5X 2025E EV/EBITDA, reflecting a discount due to the company's consecutive losses and ongoing adjustments [2][49] - The company is expected to achieve a turnaround in 2026, with a projected net profit of RMB 2.49 million [6][20] Financial Projections Revenue and Profit - Revenue for 2024-2026 is projected at RMB 4.913 billion, RMB 4.630 billion, and RMB 4.719 billion, with YoY changes of -17%, -6%, and +2% respectively [6][30] - Net profit attributable to shareholders for 2024-2026 is projected at RMB -451 million, RMB -229 million, and RMB 2.49 million [6][20] - EBITDA for 2024-2026 is projected at RMB 321 million, RMB 827 million, and RMB 1.257 billion [6][19] Costs and Margins - Gross margin is expected to improve to 64.1%, 64.6%, and 65.6% for 2024-2026, driven by supply chain optimization [34] - Labor costs as a percentage of revenue are expected to decline slightly to 37.26% and 35.82% in 2025 and 2026, respectively [20] - Depreciation and amortization as a percentage of revenue are expected to decrease to 17.83%, 17.52%, and 16.24% for 2024-2026 [20] Store Performance Xiabu Xiabu - Average single-store revenue for Xiabu Xiabu is projected at RMB 3.07 million, RMB 3.03 million, and RMB 3.09 million for 2024-2026, with YoY changes of -17%, -1.4%, and +2% [1] - The brand is focusing on cost-effectiveness and optimizing its store model, with a target of achieving profitability across all stores by 2H24 [44] Coucou - Average single-store revenue for Coucou is projected at RMB 9.37 million, RMB 9.56 million, and RMB 9.85 million for 2024-2026, with YoY changes of -15%, +2%, and +3% [1] - Coucou is expanding into lower-tier markets and reducing store sizes, which may impact average spending per customer [1] Store Expansion and Closure - Xiabu Xiabu is expected to close 50 stores in 2024 and 5 stores in 2025, with a net addition of 6 stores in 2026, bringing the total to 784 stores [43] - Coucou is expected to close 37 stores in 2024 and 35 stores in 2025, with no net additions in 2026, maintaining a total of 215 stores [43] Valuation Metrics - The company's EV/EBITDA for 2024-2026 is projected at 10.14X, 4.41X, and 3.14X [38] - The PE ratio for 2026 is projected at 421.34X, reflecting the expected turnaround in profitability [38] Industry and Market Context - The company faces intense competition and a challenging consumer environment, with both Xiabu Xiabu and Coucou experiencing declines in same-store sales [45] - The company is focusing on membership value and supply chain optimization to improve long-term profitability [42][45]
呷哺呷哺：经营调整，供应链优化，静待改善