Morgan Stanley initiated coverage on Haidilao International Holding (06862) with an "equal-weight" rating and a target price of HK$32.
It said that Haidilao is a leading hot pot brand, thanks to its superior level of service and dining experience in China's catering market, as well as its stringent food safety standards with a good value proposition.
The company currently has a domestic store base of 530, and Morgan sees the potential for this to rise to 1,500-2,000 units. It has a presence in seven regions. Haidilao also
has 40 stores overseas, and Morgan sees the runway for growth over the long term.
It forecast a 36% unit CAGR, 2018-21, making it the fastest unit grower globally.
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