HAIDILAO(HK:06862) Huajing Securities·2024-04-10 16:00Investment Rating - The report maintains a "Buy" rating for Haidilao with a target price of HK$20.51, representing a potential upside of 16% from the current price of HK$17.64 [1][2][4]. Core Views - Haidilao is expected to achieve revenue and net profit growth of 11.4% and 15.1% respectively in 2024, reaching RMB 46.18 billion and RMB 5.18 billion [4][6]. - The company is positioned as a leading player in the industry with verified earnings certainty and excellent dividend yield, justifying a valuation premium [4][6]. - The report highlights the improvement in table turnover rate to 3.8 times per day in 2023, indicating a recovery to pre-pandemic levels, and anticipates further growth in 2024 [4][6]. Summary by Sections Financial Projections - Revenue for 2024 is projected at RMB 46.18 billion, with a net profit of RMB 5.18 billion, reflecting year-on-year growth of 11.4% and 15.1% respectively [7][12]. - Earnings per share (EPS) for 2024 is estimated at RMB 0.93, with subsequent years showing growth to RMB 1.04 in 2025 and RMB 1.15 in 2026 [6][7]. Market Position and Strategy - Haidilao's strategy includes opening 44 new stores in 2024 and enhancing customer retention and acquisition through targeted marketing strategies [4][5]. - The company has begun franchising, which is expected to contribute modestly to revenue in the short term, with projections of 25 franchise stores generating approximately RMB 2.2 billion in revenue [5][6]. Valuation and Market Capitalization - The report suggests a market capitalization range of HK$858 billion to HK$1,143 billion based on a P/E ratio of 15-20 times for 2024, with a midpoint of HK$1,000 billion compared to the current market cap of HK$983 billion [6][11]. - The adjusted target price of HK$20.51 corresponds to a 20 times P/E for 2024, reflecting a 15% reduction from the previous target price of HK$24.10 [2][6].