Greater China Equity Long/Short Analyst

Eric Chen

With a blend of sell-side and buy-side perspectives, Eric has covered and researched hundreds of Greater China equities in TMT and consumer spaces - two sectors woven together by the overarching thesis of technology empowering consumption. 

Eric is highly experienced in fundamental equity long short strategy. He seeks to produce differentiated and original research that combines holistic qualitative framework, unique angles and robust modelling. The process helps gain deep insights into critical value drivers misunderstood by the market, which results in mis-priced stocks and hence long/short opportunities.

China Catering Sector: Long Xiabuxiabu / Short Jiumaojiu

Haidilao (6862 HK) – Reopen and staff costs reform-led turnaround

Xiabu Xiabu (520 HK) – Both sales and margin recovery are on track

Equity Bottom-Up

Haidilao International Holding / Equity Bottom-Up

<ul>
<li>Positive profit alerts from both Jiumaojiu and Haidilao reflect strong gain in operating efficiency but also point to looming growth deceleration as brands mature.</li>
<li>We see valuation more reasonable due to a combination of sector de-rating in 1H23 and higher visibility into earnings recovery post these profit alerts.</li>
<li>Yum China remains best long-term play in China catering sector in our view. While both Haidilao and Xiabuxiabu present trading opportunity, we are still cautious about Jiumaojiu.</li>
</ul>


Positive profit alerts from both Jiumaojiu and Haidilao reflect strong gain in operating efficiency but also point to looming growth deceleration as brands mature.
We see valuation more reasonable due to a combination of sector de-rating in 1H23 and higher visibility into earnings recovery post these profit alerts.
Yum China remains best long-term play in China catering sector in our view. While both Haidilao and Xiabuxiabu present trading opportunity, we are still cautious about Jiumaojiu.


China Catering Sector: Positioning for Interim Results