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>FY24 results were a small beat, mainly from the robust GP margin expansion.</li><li>Going into FY25E, though the SSSG may be only be stable, we are confident on a mild turnaround, driven by potential store expansion acceleration and margin expansion (better input costs, more efficient supply chain and greater adoption of multi-store management, etc.).</li><li>Maintain BUY and raise TP to HK$ 20.20, based on 18x FY25E P/E (up from 16x, due to faster expansion and sector re-rating). </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.

FY24 results were a small beat, mainly from the robust GP margin expansion.Going into FY25E, though the SSSG may be only be stable, we are confident on a mild turnaround, driven by potential store expansion acceleration and margin expansion (better input costs, more efficient supply chain and greater adoption of multi-store management, etc.).Maintain BUY and raise TP to HK$ 20.20, based on 18x FY25E P/E (up from 16x, due to faster expansion and sector re-rating). 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) - Potential store and margin expansion ahead

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>Giant Biogene was listed in Hong Kong IPO in 2022. It has done well since and is now trading 45% above its IPO price, but its still cheap.</li>
<li>GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.</li>
<li>In this note, we will talk about the company’s past performance and future prospects.</li>
</ul>


Giant Biogene was listed in Hong Kong IPO in 2022. It has done well since and is now trading 45% above its IPO price, but its still cheap.
GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
In this note, we will talk about the company’s past performance and future prospects.


2024 High Conviction - Giant Biogene - Growth Rate Keeps Moving Higher

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

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

<ul>
<li>Hong Kong is now the top-performing major world market this year.  With a large valuation disparity, both Hong Kong's and China's markets have more upside potential.</li>
<li>
<a href="https://www.smartkarma.com/entities/haidilao-international-holding" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao International Holding (6862 HK)</a> and <a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a> are benefiting from the improvement in consumer sentiment with government stimulus targeting housing payments and consumption.
</li>
<li><a href="https://www.smartkarma.com/entities/citic-securities-h" target="_blank" data-smartkarma-citation="entities:463:1" rel="noopener">Citic Securities (H) (6030 HK)</a> surged in anticipation of increased market trading and IPOs.  Industry consolidation is also part of the improved sentiment.</li>
</ul>


Hong Kong is now the top-performing major world market this year.  With a large valuation disparity, both Hong Kong's and China's markets have more upside potential.

Haidilao International Holding (6862 HK) and Anta Sports Products (2020 HK) are benefiting from the improvement in consumer sentiment with government stimulus targeting housing payments and consumption.

Citic Securities (H) (6030 HK) surged in anticipation of increased market trading and IPOs.  Industry consolidation is also part of the improved sentiment.


The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (September 27)

<ul><li>Haidilao’s 1H24 results were roughly inline, but the margin was soft, given the meaningful SSSG.</li><li>Going into 2H24E, we can still see certain pressure like drags from macro environment, high base for SSSG and staff costs inflation etc.</li><li>In our view, the extra upside could be from the acceleration in new stores opening, further plans to boost efficiency and new brands’ development. </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.

Haidilao’s 1H24 results were roughly inline, but the margin was soft, given the meaningful SSSG.Going into 2H24E, we can still see certain pressure like drags from macro environment, high base for SSSG and staff costs inflation etc.In our view, the extra upside could be from the acceleration in new stores opening, further plans to boost efficiency and new brands’ development. 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) - Waiting for New Initiatives to Shine, with Yields

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.

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Haidilao International Holding (6862 HK)

Haidilao (6862 HK) - Potential store and margin expansion ahead

Maintain BUY and raise TP to HK$ 20.20, based on 18x FY25E P/E (up from 16x, due to faster expansion and sector re-rating).

CMB International

2024 High Conviction - Giant Biogene - Growth Rate Keeps Moving Higher

Giant Biogene was listed in Hong Kong IPO in 2022. It has done well since and is now trading 45% above its IPO price, but its still cheap.

Sumeet Singh

China Catering Sector: In Search of Alpha

Sentiment-driven rally is fading. We expect investors' focus to shift to company fundamental. Our store expansion framework points to Xiabu as the...

Eric Chen

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (September 27)

HSI is the top performing major global index heading into 4Q2024. Haidilao and Anta both benefit from improved sentiment in consumer sector. Citic...

David Mudd

Haidilao (6862 HK) - Waiting for New Initiatives to Shine, with Yields

Going into 2H24E, we can still see certain pressure like drags from macro environment, high base for SSSG and staff costs inflation etc.

CMB International

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