GF Sec released a report, first covering Yihai Intl (01579.HK), giving a "buy" rating with a fair value of 18 yuan. The bank expects the company's net profit from 2024 to 2026 to be RMB 940 million/1.06 billion/1.19 billion (same below), with an annual growth rate of 10.7%/12.4%/11.9%. Reference to comparable company valuations and the pace of corporate reform, a 2024 P/E ratio of 18x is given.

The report pointed out that since 2022, multiple factors such as pressure from related parties, weak demand for fast food, and changes in Chinese-style recipes have gradually widened the gap between Yihai Intl and Sichuan Teway Food Group. Considering the differences in channel genes and product matrices, Yihai is more severely affected by external disturbances, but lag in organizational adjustments and slow market response may be the core issue. The bank believes that this year there may be a chance for a reversal in areas such as related party growth, product quality-price ratio, incentive model reform, and multi-channel supplement.

In addition, the report pointed out that in 2023, both the company and Haidilao will significantly increase the dividend payout ratio to 90%, considering the abundant existing production capacity, low capital expenditures, and sufficient cash flow, high dividends may be supported.