[ET Net News Agency, 16 May 2019] HSBC Global Research initiated coverage on Xiabuxiabu
Catering Management (00520) with a "buy" rating and a target price of HK$15.27.
Headquartered in Beijing, Xiabuxiabu was founded in 1998 and listed in December 2014. It
pioneered informal hotpot cuisine and operates the largest chain of hotpot restaurants in
China. By the end of 2018, the company owned and operated 886 Xiabuxiabu outlets across 20
provinces and 48 Coucou restaurant in 13 provinces.
Over 2016-18, overall revenue rose at a CAGR of 25% and a net profit at a CAGR of 21%.
The company is expanding rapidly, opening 195 new restaurants in 2018.
HSBC forecast a revenue CAGR of 23% and a net profit CAGR of 21% over 2019-21. It
expects the number of Xiabuxiabu restaurants to rise to 1,040 in 2019, 1,180 in 2020 and
1306 in 2021, with the number of Coucou outlets increasing to 83, 115 and 144 over the
same period.
Revenue will be dominated by SSS (same-store sales), which the research house forecast
will reach 92% in 2021 from 80% in 2018. HSBC expects Coucou's revenue to grow by 115% in
2019, 67% in 2020, and 40% in 2021, with the contribution reaching 32% of total revenue in
2021. (KL)