Investment Rating - The report maintains a HOLD rating for Jiumaojiu with a target price raised to HK$ 2.99 from the previous HK$ 2.56, indicating an upside potential of 11.4% from the current price of HK$ 2.68 [1][3][14]. Core Insights - The company is experiencing a recovery in same-store sales (SSS), with a decline narrowing in 2Q25E, attributed to initial successes in store format upgrades. The sustainability of this recovery into 2H25E and FY26E is crucial [1][10]. - The management has implemented a store format upgrade focusing on fresh ingredients, which has shown positive results. The upgrades are expected to enhance traffic and sales significantly [10][14]. - The financial forecasts have been revised upwards, with net profit estimates for FY25E, FY26E, and FY27E increased by 9,042%, 33%, and 22% respectively, reflecting lower impairment losses and improved operating margins [14]. Financial Summary - Revenue projections for FY25E are set at RMB 6,140 million, with a slight year-on-year growth of 1.1%. For FY26E and FY27E, revenue is expected to grow to RMB 6,911 million and RMB 7,088 million respectively [2][18]. - Operating profit is forecasted to increase from RMB 327.3 million in FY25E to RMB 532.6 million in FY26E, with net profit expected to rise from RMB 142 million in FY25E to RMB 298 million in FY26E [2][18]. - The report highlights a significant increase in diluted EPS for FY25E to RMB 0.103, reflecting a growth of 9,154.1% compared to the previous year [11][18]. Share Performance - The market capitalization of Jiumaojiu is approximately HK$ 3,897.3 million, with a 52-week high of HK$ 5.54 and a low of HK$ 2.19 [4]. - Recent share performance shows a 1-month increase of 3.9%, but a decline of 31.1% over the past 6 months [6]. Shareholding Structure - The largest shareholder is Mr. Guan Yi Hong, holding 37.4% of the shares, followed by JPMorgan Chase & Co with 7.5% [5]. Valuation Metrics - The report indicates a P/E ratio of 23.9x for FY25E, which is expected to decrease to 11.4x in FY26E and further to 9.5x in FY27E [2][18]. - The projected dividend yield for FY25E is approximately 2.1%, with a payout ratio assumed at 50% of net profit [14].
九毛九：SSS recovery and store revamp on track-20250612