22/08/2019 14:39

{I-bank focus}Daiwa lifts Haidilao (06862) to HK$32; "hold"

[ET Net News Agency, 22 August 2019] Daiwa Research lifted its target price for
Haidilao International (06862) to HK$32 from HK$23.5 and maintained its "hold" rating.
The research house said Haidilao posted a set of rather mixed 1H results. Daiwa noted
emerging signs of operating deleveraging pressure due to its restaurant expansion pace, as
indicated by its like-for-like earnings growth of 50% trailing behind its top-line growth
of 59%.
Daiwa expects murkier earnings visibility in the near term as the company has plans to
accelerate restaurant openings in 2H. It thinks Haidilao's continued aggressive pace of
restaurant openings in 2H suggests risks of cannibalisation, particularly in tier 1 and 2
cities, if seasonality tailwinds disappoint.
Daiwa lifted its 2019-21 net profit by 2-4% after factoring in more restaurant openings
(it now expects 300/250/200 openings in 2019/20/21, from 220/195/175 previously). (KL)

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