ab Global Research owered by UBS Evidence Lab YES P 25 August 2025 China Economic Perspectives Softer labour market, continued policy support - UBS Evidence Lab inside UBS Evidence Lab survey points to a slightly softer labour market The latest UBS Evidence Lab Labour Market Business Survey (>Access Dataset) of over 200 firms showed a slightly softening momentum in hiring in Q225, which differs a bit from the message of edging-down official unemployment rate. On a net basis, 41% of firms increased hiring on ...

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **China Consumer Sector** and its performance as indicated by the **Five-factor Consumer Activity Z-Score** compared to the **MSCI China** index [1][2]. Core Insights - **Consumer Activity Decline**: Consumer activity in China weakened further in July 2025, as evidenced by a decline in the Five-factor Consumer Activity Z-Score [7]. - **Key Factors**: The decline is attributed to softening in commodity retail sales and passenger car sales, indicating a lackluster consumer appetite [7]. - **Economic Pressures**: Deflation in wage growth and a softening property market are identified as significant drags on consumption [7]. - **Stability in Certain Areas**: Household loans, air passenger travel, and consumer catering remain relatively stable, with the latter two potentially benefiting from seasonal support during summer [7]. - **Future Outlook**: There are concerns that the payback of export front-loading and any delays in incremental fiscal stimulus may put additional pressure on consumer sentiment in the coming months [7]. Additional Important Information - **Data Sources**: The analysis is based on data from MSCI, CEIC, and Morgan Stanley Research, with the five factors considered being household loan year-over-year change, retail sales in catering, retail sales in commodities (excluding autos), passenger car retail sales, and air passenger traffic [4]. - **Analyst Team**: The report is prepared by a team of equity strategists at Morgan Stanley, including Laura Wang, Chloe Liu, and Vicky Wu [5]. This summary encapsulates the critical insights and data points from the conference call, providing a comprehensive overview of the current state and outlook of the consumer sector in China.

Summary of Haidilao International Holding (6862.HK) Earnings Review Company Overview - **Company**: Haidilao International Holding - **Ticker**: 6862.HK - **Market Cap**: HK$82.9 billion / $10.6 billion - **Enterprise Value**: HK$76.9 billion / $9.8 billion - **Current Price**: HK$14.88 - **12-Month Price Target**: HK$14.70 Key Highlights from the Earnings Call Industry Context - The catering industry is facing competition and changing consumer demands, prompting management to enhance service differentiation and product offerings [1][2] Operational Strategies 1. **Service Differentiation**: Management is focusing on providing unique services and enhancing product offerings, including freshly sliced products and frequent regional product launches [1] 2. **Store Format Diversification**: Introduction of themed stores, such as night snack venues, has resulted in a 10%-20% increase in table turnover compared to previous formats [1] 3. **"Pomegranate Plan"**: This initiative aims to lower barriers for launching new brands and attract external business opportunities, such as the acquisition of the conveyor belt hot pot brand Jugaogao [1][8] Growth and Expansion 1. **Store Openings**: The company targets a mid-single-digit percentage (MSD%) growth in gross openings for the Haidilao brand, with expectations of over 40 new store openings in the second half of 2025 [1][11] 2. **Franchise Strategy**: The franchise business is set for steady expansion, focusing on converting existing stores to franchise operations, which helps ensure operational consistency [9] Financial Performance 1. **Delivery Sales Growth**: Delivery sales increased nearly 60% year-over-year, attributed to a more diversified product offering, particularly in single-serving fast food [1][10] 2. **Earnings Forecast Revision**: Earnings forecasts for 2025-2027 have been revised down by 7%-14% due to slower store count and sales growth, alongside near-term margin pressures [2] Shareholder Returns - The company maintains a strong cash position with net cash of RMB 9 billion in the first half of 2025, indicating a commitment to balanced shareholder returns while continuing business expansion [1][12] Financial Metrics - **Revenue Estimates**: - 2025E: RMB 42.631 billion (down 1.1% from previous estimate) - 2026E: RMB 44.391 billion (down 2.2%) - 2027E: RMB 46.922 billion (down 2.3%) [13] - **Net Income**: - 2025E: RMB 3.843 billion (down 14.2% from previous estimate) [13] Risks and Considerations - Key risks include variability in table turnover recovery, expansion pace, and potential cost inflation or food safety issues [2][15] Conclusion - Haidilao is navigating a challenging catering environment with strategic initiatives aimed at enhancing service differentiation and expanding its brand portfolio. Despite facing margin pressures and a revised earnings outlook, the company remains committed to shareholder returns and operational growth. The current investment rating is Neutral with a target price of HK$14.70, reflecting a cautious outlook on future performance [2][15].

Core Insights - Caliber has announced a 10-year exclusive partnership with Wolfgang Puck Catering for its PURE Pickleball & Padel™ development, which will include various food and beverage services across multiple venues within the facility [1][3] - The PURE facility aims to be the largest indoor pickleball and padel facility globally, covering over 196,726 square feet and featuring a 1,200-seat pro arena, 40 indoor pickleball courts, and 8 indoor padel courts [2][6] - The partnership will also focus on co-marketing events that combine sports and culinary experiences, enhancing the overall guest experience [1][3] Company Overview - Caliber is a real estate investor and developer with over $2.9 billion in managed assets, specializing in hospitality, multi-family residential, and multi-tenant industrial sectors [5] - The company has created the Pickleball at Riverwalk Fund to attract investments from accredited investors and qualified opportunity zone funds, targeting the growing pickleball and padel markets [3][5] Industry Context - The rise of pickleball and padel is noted as a significant trend in the U.S. and globally, with increasing popularity among sports enthusiasts [3] - The PURE facility is expected to attract approximately 500,000 visits annually and host major tournaments, positioning it as a key player in the rapidly growing sports sector [6]

Core Insights - Caliber's joint venture, PURE Pickleball & Padel, has signed a 10-year exclusive agreement with Wolfgang Puck Catering to provide food and beverage services for its new facility [1][3] - The facility aims to be the largest indoor pickleball and padel venue globally, covering over 196,726 square feet and featuring a 1,200-seat pro arena, 40 indoor pickleball courts, and 8 indoor padel courts [2][8] - The partnership will also focus on co-marketing events that combine sports and culinary experiences, enhancing the overall guest experience [1][3] Company Overview - Caliber is a real estate investor and developer with over $2.9 billion in managed assets, specializing in hospitality, multi-family residential, and multi-tenant industrial sectors [7] - The company has a 16-year track record and aims to invest in overlooked projects and strategies, providing a competitive advantage [7] - PURE Pickleball & Padel is positioned as a member-focused facility that connects the rapidly growing sports of pickleball and padel with the local community [8] Project Details - The PURE facility will include various amenities such as a restaurant and bar, pro shop, fitness center, special event spaces, and childcare [2][8] - The target opening date for the facility is late 2026, with an estimated 500,000 visits annually expected [8] - The project is part of the Riverwalk Development Project in the Talking Stick Entertainment District, which spans 100 acres [2]

Company Overview - Beyond Oil Ltd. is a food-tech innovation company focused on reducing health risks associated with fried food, lowering operational costs, minimizing waste, and enhancing sustainability [6] - The company has over 15 years of experience and its patented technology has received regulatory clearances from the FDA and Health Canada [6] - Beyond Oil's solution addresses the widespread practice of reusing frying oil, which poses health risks linked to cancer and cardiovascular diseases [6] Partnership with Sodexo - Sodexo Israel has selected Beyond Oil as its new supplier after a successful pilot program, expanding the use of Beyond Oil's patented filter powder across its catering network [1][4] - The partnership aligns with Sodexo's commitment to social and environmental responsibility, aiming to reduce its ecological footprint while improving food quality [3] - Sodexo Israel utilizes approximately 400,000 liters of frying oil annually, with initial pilot results showing improved food quality and reduced oil consumption [4] Product Benefits - Beyond Oil's filter powder is a proprietary formulation that significantly reduces contaminants produced during frying, enhancing food quality and extending oil life [2] - The product targets harmful compounds such as free fatty acids, trans fats, and polycyclic aromatic hydrocarbons, thereby lowering toxic emissions in kitchen fumes [2] - The implementation of this technology has led to high satisfaction levels among kitchen teams and diners [4]

Company Overview - Sodexo Israel is the largest provider of catering and building-maintenance services in the country, employing 1,800 professionals and serving clients such as CAL, Isracard, and the Ministry of Defense [5] - Beyond Oil Ltd. is a food-tech innovation company focused on reducing health risks associated with fried food, improving sustainability, and lowering operational costs [6] Partnership Announcement - Sodexo Israel has selected Beyond Oil as its new supplier of choice after a successful pilot program at several key locations, expanding the use of Beyond Oil's patented filter powder across its catering network [1][4] - The partnership aligns with Sodexo's global strategy to enhance food quality and reduce its ecological footprint [3] Product Benefits - Beyond Oil's filter powder significantly reduces contaminants produced during frying, improving food quality, extending oil life, and lowering toxic emissions [2] - Initial pilot results indicated improved food quality, reduced oil consumption, and high satisfaction levels among kitchen teams and diners [4] Market Impact - Sodexo Israel uses approximately 400,000 liters of frying oil annually, indicating a substantial market for Beyond Oil's technology [4] - Beyond Oil's solution addresses critical health concerns related to the reuse of frying oil, which is common in various food service settings [6]

Company Overview - Premium Catering (Holdings) Limited is a certified Halal food caterer specializing in Indian, Bangladesh, and Chinese cuisine with over 11 years of experience in the catering services industry in Singapore [3] - The company primarily supplies budget prepared meals to foreign construction workers in Singapore and operates food stalls, buffet catering services for private functions, and ancillary delivery services [3] - Since 2019, the company has introduced smart incubators for secure, hygienic, and contactless meal delivery at a pre-set temperature [3] Share Consolidation - The company announced a Share Consolidation (Reverse Split) of its Class A Ordinary Shares on July 11, 2025, with a Reverse Stock Split ratio of 1:9 [1] - The record date for the Reverse Stock Split is July 21, 2025, and trading on a Reverse Stock Split adjusted basis is expected to begin on July 22, 2025, under the existing ticker symbol "PC" [1] - Currently, there are 18,652,750 Class A Ordinary Shares issued and outstanding, which will reduce to 2,072,528 following the Reverse Stock Split [1]

Company Overview - Premium Catering (Holdings) Limited is a certified Halal food caterer specializing in Indian, Bangladesh, and Chinese cuisine with over 11 years of experience in the catering services industry in Singapore [3] - The company primarily supplies budget prepared meals to foreign construction workers in Singapore and operates food stalls, buffet catering services for private functions, and ancillary delivery services [3] - Since 2019, the company has introduced smart incubators for contactless meal delivery, which are custom-made heated and insulated food vending lockers [3] Share Consolidation Announcement - The company announced a share consolidation (Reverse Stock Split) approved by members at an Extraordinary General Meeting, with a ratio ranging from 1 for 2 to 1 for 18, and a final decision of 1:9 for all shareholders of record on July 21, 2025 [1][2] - The Ordinary Shares are expected to begin trading on a Reverse Stock Split adjusted basis on the Nasdaq Capital Market starting July 22, 2025, under the existing ticker symbol "PC" [1] Compliance with Nasdaq Requirements - The Board of Directors believes that the Reverse Stock Split is necessary to maintain compliance with Nasdaq Listing Rule 5550(a)(2), which requires a minimum bid price of $1.00 for continued listing on the Nasdaq Capital Market [2] - The Board anticipates that the 1:9 Reverse Stock Split will facilitate compliance with these Minimum Bid Requirements [2]

Core Viewpoint - The "Su Super" football league has gained significant popularity, breaking attendance records and stimulating local economies through increased tourism and food consumption [1][5][6]. Group 1: Attendance and Records - The match between Nanjing and Suzhou on July 5 attracted 60,396 spectators, setting a new attendance record for the "Su Super" league [1]. - This attendance figure is close to the all-time record of 65,769 set during a 2012 match between Jiangsu Shuntian and Guangzhou Evergrande [5]. Group 2: Economic Impact - The popularity of the "Su Super" league has led to a 50% week-on-week increase in tourism orders for Jiangsu Province, making it the top destination in the country during the weekend of June 14-15 [6]. - Food consumption has also surged, with a 49% year-on-year increase in dining orders from non-local consumers during the matches [6]. - A specific event in Huai'an saw a total of 48,000 visitors over three days, consuming 103 tons of crayfish, marking a 15% increase in sales compared to the previous year [9]. Group 3: Sponsorship and Commercial Opportunities - The excitement surrounding the "Su Super" league has attracted numerous brands as sponsors, with the official sponsorship price reaching 3 million yuan [12]. - Major brands from the Alibaba ecosystem, including Taobao and Alipay, have quickly entered the sponsorship arena, indicating a competitive environment among sponsors [10][12]. - The league is redefining the commercial value of football in a more relatable manner, enhancing its visibility and marketability [14].