Why can the transfer of senior executives stimulate the rise of the stock price of Techee International? How has the company performed recently?
Despite the recent weak trend in the Hong Kong stock market, some catering stocks have risen significantly, especially Tech Sea International (09658.HK) which has reversed its trend in the past three days and has accumulated an increase of 18.50% by midday closing today. Product structure, 10-30 billion yuan products operating income of 401/1288/60 million yuan respectively.
Note: The performance of Tech Sea International since June 18th
As of midday closing, Tech Sea International rose 0.28% today to HKD 14.26.
In terms of news, Tech Sea International's previous rise was mainly attributable to an announcement that the company said last Friday that Yang Lijuan would resign as executive director and chief executive officer of the company from July 1 and would move to Tech Sea International (09658.HK) as executive director and chief executive officer. Gou Yiqun, vice president and chief executive officer of the company, will take over as executive director and chief executive officer of Haidilao.
According to the announcement, Yang Lijuan has more than 27 years of experience in Haidilao restaurant operations and overall management. In her career, she has successfully expanded into new markets, including Xi'an and Shanghai, and has built a reputation and customer base for Haidilao restaurants from scratch, proficient in the business philosophy of uniting employees and attracting customers.
During the epidemic, Yang Lijuan led Haidilao International Holding Co., Ltd. ("Haidilao International") to successfully implement the "woodpecker plan" and "hard bone plan," helping the company overcome its operational difficulties.
It is worth mentioning that after Yang Lijuan took over as CEO when Haidilao lost more than 4 billion yuan in 2021, she successfully helped Haidilao turn losses into profits in 2022 and achieved a net income of 4.495 billion yuan in 2023.
Institutions say the personnel change will help Tech Sea International expand its stores
Zhongyin International pointed out that this personnel change is not negative for Haidilao's impact, because the company's operating conditions are continuing to improve, the potential for new store openings is still increasing, and it is believed to be bullish for Tech Sea International.
Zhongyin International also pointed out that Haidilao's management team competitiveness will not be greatly affected, and looks forward to the new CEO Gou Yiqun's strong management ability, who has served as chief financial officer, head of IT department, supply chain and procurement manager, and was one of the company's first batch of employees during the start-up period.
Why does Tech Sea International grab market attention frequently?
In fact, Tech Sea International's trend has continued to attract market attention. According to publicly available information, Tech Sea International is a subsidiary of Haidilao Group, focusing on direct sales business in overseas markets. As of December 31, 2023, Haidilao operates a total of 115 branches in the international market, a net increase of 4 restaurants compared to 2022. Among these restaurants, 70 are located in East Asia, 18 in North America, and the remaining 10 are distributed in other regions.
From 2021 to 2023, Tech Sea International's revenues were USD 312 million, USD 558 million and USD 686 million, respectively; net losses were USD 151 million, USD 41 million and net income was USD 25 million.
In a recent research report, Pu Yin International pointed out that Tech Sea International is the only listed catering company that has layout in overseas markets, and its enormous expansion potential has not been fully reflected in its current market value after it was spun off from Haidilao. Compared with China's catering industry peers, Tech Sea International's expansion in overseas markets is not restricted by regional economic development, meaning it has the potential to reach a higher upper limit in terms of the number of stores.
At the same time, because the chain hot pot business in the overseas market is still in its early stages and market competition has not fully unfolded, the rapid expansion of Tech Sea International's store network in the short term will not have a significant impact on the turnover rate of its restaurants. Therefore, Pu Yin International is optimistic about Tech Sea International's rapid expansion of its stores after 2024 and the continuous improvement of its store profit margin. It is expected that these factors will drive the market to re-evaluate Tech Sea International's valuation and give it a higher valuation level.