CICC lowers target price of restaurant chain Jiumaojiu by 21% as Q2 recovery weakened

 

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Chinese restaurant chain Jiumaojiu International’s recovery of same-store sales (SSS) in the second quarter of the year was milder than the first quarter, said CICC in a note.

The Tai Er brand’s uptrend and margins remained strong and Jiumaojiu in June raised its guidance for the target of hotpot new store openings from 25 to a range of 30 – 40 in June, it noted.

The bank lowers its forecast of Jiumaojiu’s earnings in 2023 and 2024 by 18% and 13%, respectively, to 532 million yuan and 922 million yuan. It lowers the price target for the stock by 21% to HK$20.2, equivalent to a forecast P/E ratio of 47 times and 26 times for this year and next years, and maintained an “Outperform” rating.