External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

Haidilao International Holding / Equity Bottom-Up

<ul><li>We think Haidilao’s downside is protected by its dividend (5.6% FY24E yield and the 90% payout ratio should sustain into the future), while the upside is highly dependent on its speed of store expansion (which is still very slow but we tend to think it will accelerate once the franchising model is finalized).</li><li>Hence, we maintain BUY with a TP of HK$ 21.52, based on a 20x FY24E P/E. Noted that in the long run, the lack of growth drivers is still a concern.</li><li>The momentum so far in 2024 is still intact. While the industry is still suffering (most of the brands are experiencing SSS decline), management highlighted that Haidilao’s table turnover has further increased by over 30% in Jan-Feb 2024 (table turnover for CNY/ Valentine’s Day were at around 5x/ 6x).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We think Haidilao’s downside is protected by its dividend (5.6% FY24E yield and the 90% payout ratio should sustain into the future), while the upside is highly dependent on its speed of store expansion (which is still very slow but we tend to think it will accelerate once the franchising model is finalized).Hence, we maintain BUY with a TP of HK$ 21.52, based on a 20x FY24E P/E. Noted that in the long run, the lack of growth drivers is still a concern.The momentum so far in 2024 is still intact. While the industry is still suffering (most of the brands are experiencing SSS decline), management highlighted that Haidilao’s table turnover has further increased by over 30% in Jan-Feb 2024 (table turnover for CNY/ Valentine’s Day were at around 5x/ 6x).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Haidilao (6862 HK) - Looking for Expansion Opportunities with Downside Protection

<ul><li>1H23 result was strong (resilient table turn plus strong margin uptick) but with limited surprises.</li><li>While we are still cautious about the sector in 2H23E, Haidilao is one of our preferred picks, and the next catalyst could be the speed up in store expansion (likely in FY24E).</li><li>We maintain BUY, based on this short-term turnaround. But in long-run, lack of growth drivers is still a big concern. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

1H23 result was strong (resilient table turn plus strong margin uptick) but with limited surprises.While we are still cautious about the sector in 2H23E, Haidilao is one of our preferred picks, and the next catalyst could be the speed up in store expansion (likely in FY24E).We maintain BUY, based on this short-term turnaround. But in long-run, lack of growth drivers is still a big concern. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Haidilao (6862 HK) – Store Expansion May Be the Next Catalyst

Thematic (Sector/Industry)

<ul><li>A mixed CNY, robust topline was likely aided by seasonality while the fall in spending power and price war continued.</li><li>We do agree both passenger flows and overall sales were strong during the CNY holiday, given that the spending power was somewhat diluted by the resumption of outbound tourism.</li><li>But on the other hand, the 2024 CNY holiday was a longer-than-usual one and contained one more Saturday and also the Valentine’s Day, hence the recovery rate after adjustment may just be stable (instead of improvements vs 4Q23).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

A mixed CNY, robust topline was likely aided by seasonality while the fall in spending power and price war continued.We do agree both passenger flows and overall sales were strong during the CNY holiday, given that the spending power was somewhat diluted by the resumption of outbound tourism.But on the other hand, the 2024 CNY holiday was a longer-than-usual one and contained one more Saturday and also the Valentine’s Day, hence the recovery rate after adjustment may just be stable (instead of improvements vs 4Q23).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Consumer Sector – CNY Was Mixed and We Stay Conservative

<ul><li>Numbers for catering sector did rebound strongly YoY, but since SSS/ table turnover recovery rate were not as good as expected, de-rating was massive in 1H23E.</li><li>After a disappointing 2Q23 plus worrying macro outlook, we downgrade the sector to MARKET-PERFORM as we see more downside in earnings.</li><li>However, as valuation turned more attractive, we can start to accumulate industry leaders. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Numbers for catering sector did rebound strongly YoY, but since SSS/ table turnover recovery rate were not as good as expected, de-rating was massive in 1H23E.After a disappointing 2Q23 plus worrying macro outlook, we downgrade the sector to MARKET-PERFORM as we see more downside in earnings.However, as valuation turned more attractive, we can start to accumulate industry leaders. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Catering Sector – Staying cautious after a disappointing 2Q23E

<ul><li>Impressive recovery vs Feb-Apr 2023, while both consumer and investors sentiment should be boosted, the post holidays purchasing power is still important.</li><li>We find the data points during this 5-1 golden week in 2023 slightly better than expectation and encouraging, esp. after the weakening consumption trend post CNY 2023.</li><li>We are highly delighted to see a surge in recovery rate of domestic tourism volume/ spending during this holiday to 119%/ 101%, which is far better than the 83%/ 51% in Qingming Festival and 89%/ 73% in CNY, according to Ministry of Culture and Tourism/文化和旅游部.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Impressive recovery vs Feb-Apr 2023, while both consumer and investors sentiment should be boosted, the post holidays purchasing power is still important.We find the data points during this 5-1 golden week in 2023 slightly better than expectation and encouraging, esp. after the weakening consumption trend post CNY 2023.We are highly delighted to see a surge in recovery rate of domestic tourism volume/ spending during this holiday to 119%/ 101%, which is far better than the 83%/ 51% in Qingming Festival and 89%/ 73% in CNY, according to Ministry of Culture and Tourism/文化和旅游部.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Consumer Sector – A Strong Comeback in 5-1 Golden Week

China

Haidilao International Holding Ltd. operates Chinese cuisine restaurant brand focusing on hot pot cuisine. The Company provides hot pots, soup bases, dipping sauces, drinks, prepared food, and other products. Haidilao International Holding opens restaurants in Taiwan, Hong Kong, Singapore, South Korea, Japan, and the United States.

Haidilao International Holding (6862 HK)

Haidilao (6862 HK) - Looking for Expansion Opportunities with Downside Protection

Hence, we maintain BUY with a TP of HK$ 21.52, based on a 20x FY24E P/E. Noted that in the long run, the lack of growth drivers is still a concern.

CMB International

Haidilao (6862 HK) – Store Expansion May Be the Next Catalyst

While we are still cautious about the sector in 2H23E, Haidilao is one of our preferred picks, and the next catalyst could be the speed up in store...

CMB International

China Consumer Sector – CNY Was Mixed and We Stay Conservative

We do agree both passenger flows and overall sales were strong during the CNY holiday, given that the spending power was somewhat diluted by the...

CMB International

China Catering Sector – Staying cautious after a disappointing 2Q23E

Numbers for catering sector did rebound strongly YoY, but since SSS/ table turnover recovery rate were not as good as expected, de-rating was...

CMB International

China Consumer Sector – A Strong Comeback in 5-1 Golden Week

Impressive recovery vs Feb-Apr 2023, while both consumer and investors sentiment should be boosted, the post holidays purchasing power is still...

CMB International