Credit Suisse

According to a report published by Credit Suisse, Tsui Wah Holdings (2.53, -0.08, -3.06%) (01314.HK)'s annual performance fell short of expectations. According to the bank, the weak performance was mainly due to poor same-store sales growth in Hong Kong and the Mainland in the second half of the year (October to March); expenses for newly established central kitchens in Hong Kong and Shanghai; and pre-opening expenses and delays in related new store expansion. However, the bank still has a positive view on Cuihua, saying that Shanghai's new central kitchen has been in operation since June, which has removed the adverse factors; the new regional team is likely to expand faster in southern China; and Cuihua's revenue growth is better than that of its peers, showing that the brand is competitive. To reflect the low growth in same-store sales and the cost pressure brought about by expansion, the target price dropped from 3.4 yuan to 3.2 yuan, but the bank believes that Cuihua's growth prospects are excellent, and the valuation is not high, so it maintains the “outperform the market” rating.