Goldman Sachs released a report pointing out that the management of Jiumaojiu (09922.HK) revealed that although the market is still full of challenges this month, the company is committed to enriching product variety to cover a wider range of customers. They also plan to better control promotions in the second half of the year while paying more attention to product quality.

Regarding store expansion, Jiumaojiu's management will adopt a more cautious attitude and only open profitable stores. The goal for their brand "Sōng" hotpot has been adjusted from 34-40 stores to 25 stores. Although Tai'er Suancai Fish still has the same goal of opening 80-100 stores in mainland China, the minimum target for store openings may be adjusted.

In addition, Jiumaojiu's management pointed out that the company is committed to cost savings, including optimizing labor efficiency and reducing capital expenditures in the early stages of store opening. However, the management believes that sales performance is the key to improving gross profit. Although new brands will continue to be cultivated, the main focus in the short term will be on the main brands Tai'er Suancai Fish and "Sōng". In terms of shareholder returns, the management expects the dividend payout ratio to be higher than 40% in the coming years and will carry out up to 0.2 billion yuan in repurchases.

The bank has lowered its earnings forecast for Jiumaojiu for the fiscal years 2024 to 2026 by 37% to 55% to reflect its lower-than-expected performance in the first half of this year and the possible pressure on same-store sales growth in a challenging market. However, with the management's efforts in controlling promotions, cost savings, and resource concentration in the main brands, the bank expects Jiumaojiu's gross profit to continue to improve in the second half of this year and next year. The bank has lowered Jiumaojiu's target price from 6.2 yuan to 3.8 yuan and maintained its "buy" rating.