【行业研究报告】大家乐集团-Gaining market share under a weak macro

18Jun2024
CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate
CafeDeCoral(341HK)
Gainingmarketshareunderaweakmacro
FY24resultsweredecent.However,givensuchmacroweakness(CDChas
actuallyoutperformedtheindustry),wehavetotrimourearningsforecast.
Butbecauseofourhighhopeofthenewmanagement,CDC’sdefensive
natureanditsattractivedividendyield,wemaintainBUY.
HKmarket:Whiletheindustryrecoveryisslowerthanexpected,CDC
hasoutperformed,butwehavebecomeslightlymoreprudentabout
hasoutperformed,butwehavebecomeslightlymoreprudentabout
margins.Underthecurrentmacroheadwinds(highinterestrates,ongoing
stressinthepropertymarket,moreHongkongerstravellingabroadorto
mainlandChina),recoveryofbothHKretailsalesandcateringsaleshas
beenweakerthanexpected.However,intermsofsegment,fastfoodis
alreadythemostresilient,whichhadarecoveryrateof102%duringJan-
Feb2024(vs2019),muchhigherthanChinese/non-Chineserestaurants/
overallmarket’s75%/91%/87%.Ontopofthat,CDChasalsostartedto
reclaimitsmarketsharein2H24,vs1H24,inourview,duetolaunchesof
moreinnovativeproductsandbettermarketing.CDC’sSSSrecoveryrate
wasstillquiteresilient,at88%inFY24,butgivenallthemacroheadwinds
(managementdidmentionanegativeSSSGinApr-May2024andpotential
roomforASPincreasemaybelimited),wearemoreprudentthanbefore
andexpectaSSSrecoveryrateofonly88%/90%for1H25E/2H25E
(equivalentto0%/2%SSSG,whileaccelerationinto2H25Eislikely,thanks
toboostsfromHKgovernmentonrollingoutmore“megaevents”).Noted
thattheweaknessfromcasualdiningcouldbeoffsetbytherobustgrowth
frominstitutionalcatering(salesjumpedby18%inFY24andmorenew
clientsweresigned).Formargins,wedothinktheinitiativesarestillthere
(ASPhikes,menuinnovations,refinedsourcing,greateruseofmobileapps
andkiosksorderings,etc.),butsincemorediscountscouldbeofferedto
boostcustomertrafficandthelevelofoperatingleveragecouldbeless,we
arenowslightlymoreconservativeonitsFY25E/26Emargintarget(HSD
pre-taxmarginandnetprofitmargin).
MainlandChinamarket:Remarkablegrowthgiventhemacro
weakness.MainlandChinamarketsalesincreasedby15%YoYinFY24,
drivenbyahighlyimpressiveSSSGof11%andstorenumbergrowthof
12%.Moreover,itsEBITmarginreturnedtodoubledigits(at12%)andmuch
higherthanHKmarket’s9%.SSSrecoveryratealreadyreached102%,
whichisactuallybetterthanmostofitslistedpeers(exceptDPCorHDL).
Weattributesuchperformancetoitsexcellenttastes,cozystore
environmentandlocalizedmarketing,etc.Goingforward,thankstodecent
momentumofitsnewstoreSSSGandrapidstoreexpansion(aimingfor20
newstores),wedoexpectitsSSSrecoveryratetofurtherincreaseto106%
inFY25E(equivalentto4%SSSG).