Golden News | Goldman Sachs Research Reports pointed out that in November, same-store sales (SSSG) in the Dining industry continued to remain weak, with fluctuating demand. Regarding policy stimuli, more cities/provinces have introduced dining consumption vouchers, but the impact is believed to vary by brand and region, and the companies covered by the bank have generally not seen a notable uplifting effect. In terms of competition, the competition in the fast food and coffee sectors remains fierce but stable in order.
The bank indicated that HAIDILAO (06862/neutral) saw a slight decline in average table turnover rate in November compared to the same month last year, but the performance is considered robust given the higher base compared to October and the volatility in demand. Thus far, same-store sales (SSSG) in the second half of the year are generally in line with expectations, which anticipate a 2% year-on-year decline in average store sales; however, the pace of store expansion (a net increase of 32 stores for HAIDILAO from July to November) still lags behind expectations (a total/net increase of 58/46 stores is anticipated for HAIDILAO in the second half of the year). Factors such as self-discipline in promotional activities, favorable raw material prices, and labor cost savings compared to the first half of the year may support gradual improvement in HAIDILAO's operating margin (OPM) for the second half of this year (the bank expects the operating margin in the second half of 2024 to remain the same as in the first half of 2024).
JIUMAOJIU (09922/Buy) continued to face weakness after the National Day holiday in November, indicating that recovery levels from October to November were lower than those in the third quarter compared to pre-pandemic levels. Thus far, same-store sales (SSSG) in 4Q have underperformed relative to the bank's expectations, particularly for the Tai Er brand (given the lower base, the bank expects 4Q SSSG to be -13%, compared to -18% in 3Q).
Naixue's Tea (02150/Sell) saw a 19% year-on-year decline in same-store sales (SSS, for direct-operated stores) in November, with order volume decreasing by 14% and the average ticket size dropping by 7% to 24.6 RMB. The bank continues to see downside risks in store openings, with the number of closures of company-operated stores exceeding expectations, and a downturn in the expansion of franchised stores (the bank currently estimates a net increase of 350/300 stores for the fiscal years 2024/25).