Investment Rating - The report maintains a "Buy" rating for Jiumaojiu (9922 HK) with a target price of HKD 9.90, indicating a potential upside of 76.8% from the current price of HKD 5.60 [1][12]. Core Insights - Jiumaojiu's 2023 performance exceeded expectations, with net profit rebounding by 820% to RMB 453 million and revenue growing by 49% to RMB 5.986 billion, both reaching historical highs [5][6]. - The strong growth momentum is driven by the brands Taier and Song Hot Pot, with sales growth of 44% and 210% respectively in 2023 [5][7]. - The franchise model is being tested, which is expected to accelerate growth with relatively low risk, particularly in remote provinces and overseas markets [1][2]. Financial Performance Summary - 2023 Financials: Revenue reached RMB 5,986 million, a 49.4% increase year-on-year, while net profit surged 820.9% to RMB 453 million [3][5]. - Profitability Metrics: Gross margin improved to 64.2%, operating margin to 18.0%, and net margin to 7.6%, reflecting effective management despite competitive pressures [5][6]. - Future Projections: For 2024, revenue is projected to grow to RMB 8,076 million, with a compound annual growth rate (CAGR) of 40% in earnings per share expected from 2024 to 2026 [2][3]. Brand Performance Breakdown - Sales by Brand: In 2023, Taier accounted for 75% of total sales, with Song Hot Pot contributing 13% and Jiumaojiu itself at 11% [1][7]. - New Openings: Jiumaojiu plans to open 80-100 new Taier restaurants in mainland China and 15-20 in Hong Kong, Taiwan, and overseas markets in 2024 [2][3]. Market Dynamics - Consumer Trends: Despite a tightening consumer wallet impacting the restaurant sector, Jiumaojiu is positioned as a high-growth company, distinguishing itself within the Chinese consumer market [2][3]. - Franchise Model Interest: The franchise model has generated significant interest, with expectations of minimal financial impact in 2024 as the first franchise locations are set to open [1][2].
怂火锅势头强劲；加盟模式是潜在利润扩张引擎