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<Research> CICC Lowers TP for XIAO CAI YUAN (00999.HK) to HKD10, Cuts Adjusted Earnings Forecast for This Year and Next by 24% to 27%
Recommend 1 Positive 2 Negative 2 |
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CICC's research report indicates that XIAO CAI YUAN (00999.HK) announced its annual results for 2025: revenue increased by 2.6% year-on-year to RMB53.45 billion (same below); adjusted net profit rose by 22% year-on-year to RMB7.15 billion. The results were basically in line with expectations. CICC anticipates that XIAO CAI YUAN's future gross margin may decline due to price reductions. By business segment, last year's dine-in/takeaway revenue grew by 2.2% and 3% year-on-year, respectively, with takeaway revenue share rising to 39%. The company stated that it will strategically adjust its takeaway business in the future, guiding that the takeaway revenue share may decrease to a healthier level by 2026 (with takeaway not exceeding 30% during store peak periods). CICC is optimistic about the company's long-term measures to optimize its business model through consumer concessions and balancing takeaway and dine-in businesses, achieving sustainable and steady development. Considering the pressure on profitability brought by price reductions, CICC lowered its adjusted net profit forecast for XIAO CAI YUAN for this year and next by 27% and 24% to RMB5.84 billion and RMB7.15 billion, respectively. The "Outperform" rating is maintained, and after comprehensively considering the earnings forecast adjustment and the positive outlook on the company's business model, the target price is reduced by 14% to HKD10, corresponding to 18x and 14x adjusted P/E ratios for this year and next, with an upside potential of 29%. (hc/da) Auto-translated by third-party software This translation was auto-generated by third-party software. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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