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

<ul><li>Tai Er’s SSS decline has already stabilized and its restaurant OP margin has started to improve HoH in 1H25.</li><li>Backed by an array of positive signs in 2H25E, including Tai Er’s store revamp, improved breakeven point, less impairment losses, launch of Song hotpot’s new store format and a new brand, we believe the turnaround is near.</li><li>Hence, we raise our rating to BUY with TP of HK$ 3.18.</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.

Tai Er’s SSS decline has already stabilized and its restaurant OP margin has started to improve HoH in 1H25.Backed by an array of positive signs in 2H25E, including Tai Er’s store revamp, improved breakeven point, less impairment losses, launch of Song hotpot’s new store format and a new brand, we believe the turnaround is near.Hence, we raise our rating to BUY with TP of HK$ 3.18.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.

Jiumaojiu (9922 HK) - Multiple Positive Signs Suggest a Turnaround

<ul><li>We are delighted to see SSS decline to narrow in 2Q25E with some initial success in the store format upgrades.</li><li>However, while the turnaround is still on track in general and fairly constructive, it is just kind of inline with the market’s expectation.</li><li>What is more important is the sustainability into 2H25E and FY26E and potential beat on top of that. </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 are delighted to see SSS decline to narrow in 2Q25E with some initial success in the store format upgrades.However, while the turnaround is still on track in general and fairly constructive, it is just kind of inline with the market’s expectation.What is more important is the sustainability into 2H25E and FY26E and potential beat on top of that. 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.

Jiumaojiu (9922 HK) - SSS Recovery and Store Revamp on Track

Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>Sentiment driven rally is fading. Although COVID exit remains swing factor, individual company’s performance will increasingly be driven by their business models.</li>
<li>Our proprietary store expansion framework suggests divergent growth outlook for major players - stretched for Haidilao, moderate for Jiumaojiu and Yum China, and ample for Xiabuxiabu.</li>
<li>Xiabuxiabu is our top pick due to its strong turnaround not yet priced in depressed valuation. We also like Yum China but stay cautious on Jiumaojiu and Haidilao on valuation.     </li>
</ul>


Sentiment driven rally is fading. Although COVID exit remains swing factor, individual company’s performance will increasingly be driven by their business models.
Our proprietary store expansion framework suggests divergent growth outlook for major players - stretched for Haidilao, moderate for Jiumaojiu and Yum China, and ample for Xiabuxiabu.
Xiabuxiabu is our top pick due to its strong turnaround not yet priced in depressed valuation. We also like Yum China but stay cautious on Jiumaojiu and Haidilao on valuation.     


China Catering Sector: In Search of Alpha

<ul><li>Jiumaojiu’s FY24 results were inline with profit warning. 1Q25 trend was weak but improved QoQ.</li><li>While we are increasingly positive about the company’s reforms, we still expect low margins in FY25E given the SSS drop and potential impairments. Maintain HOLD.</li><li>Series of transformations are still undergoing in FY25E. For the group in FY25E, they will: 1) continue to focus on product quality as their lifeline and ensure the high standard of every dish</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.

Jiumaojiu’s FY24 results were inline with profit warning. 1Q25 trend was weak but improved QoQ.While we are increasingly positive about the company’s reforms, we still expect low margins in FY25E given the SSS drop and potential impairments. Maintain HOLD.Series of transformations are still undergoing in FY25E. For the group in FY25E, they will: 1) continue to focus on product quality as their lifeline and ensure the high standard of every dishContent 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.

Jiumaojiu (9922 HK) - A Better Reform Plan but More Time Is Needed

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>Chinese restaurant sector could see 15% YoY revenue growth in Q1 2023, as Total Retail Sales of Meals in China rose 16.4% YoY during Jan-Feb 2023.</li>
<li>
<a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings Inc (9987 HK)</a>'s 1Q23 OP may reach a record high of $350m, and annual profitability is expected to double as restaurant footfall recovers.</li>
<li>We suggest buying Yum China for potential multiple expansion due to rapid profitability growth.</li>
</ul>


Chinese restaurant sector could see 15% YoY revenue growth in Q1 2023, as Total Retail Sales of Meals in China rose 16.4% YoY during Jan-Feb 2023.

Yum China Holdings Inc (9987 HK)'s 1Q23 OP may reach a record high of $350m, and annual profitability is expected to double as restaurant footfall recovers.
We suggest buying Yum China for potential multiple expansion due to rapid profitability growth.


Yum China: Looking Delicious with Record Profits Expected in 1Q23 and Potential for Further Growth

China

Jiumaojiu International Holdings Limited operates as a holding company. The Company, through its subsidiaries, focuses on manufactures food products. Jiumaojiu International Holdings serves customers in China.

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Jiumaojiu (9922 HK)