The Zhitong Finance App learned that Huaxi Securities released a research report saying that the first “buy” rating for Xiabuxiabu (00520) was given. The net profit returned to the mother in 2022-24 is expected to be -3.26/38/631 million yuan respectively, with a target price of HK$9.36. There is still room for 42.4% increase from the current closing price. After this round of adjustments is completed, the company's internal management efficiency and employee motivation are expected to improve marginal; after a broken arm and hemostasis, the profitability of the Xiabu brand will pick up, speed up the opening of stores, and take advantage of new brands. In the future, multiple brands will operate, and the growth logic is clear.
According to the report, in the past two years, in-depth adjustments have been made within the company. According to the official account of the New Consumer Daily and the 2022 H1 company performance exchange, on the one hand, the founder, Mr. He, returned to the helm and promoted two experienced employees internally to serve as COO of the Xiabuxiabu brand and the coalition brand, respectively; on the other hand, the KPI assessment was skewed towards the profit end and a profit sharing mechanism was initiated to promote the refinement of cost management and control; in addition, the group's resources, especially the membership system, were fully integrated to achieve resource sharing between brands.
Looking at each brand,1) Xiabu:Returning to the popular route, introducing a cost-effective package with prices between 50-70 yuan is expected to win back the favor of consumers; closing more than 200 loss-making stores and reducing the rent-to-sale ratio through optimization of site selection+rent renegotiation is expected to improve profitability.2) Rounding up:It has been recognized by consumers for its unique business model and high-quality products and services, and has maintained steady operations during the pandemic; store openings are expected to accelerate after the epidemic. According to the bank's estimates, the number of medium- to long-term store openings in China reached 601 (neutral), and there is still room for improvement to more than double.3) Burn while:The barbecue circuit is in the 100 billion market. Currently, no strong brands have appeared. Taking advantage of the diversified business format of “barbecuing+tea and wine+joy”, future development is also worth looking forward to.
