【行业研究报告】九毛九-SSS recovery and store revamp on track

12Jun2025
CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate
Jiumaojiu(9922HK)
SSSrecoveryandstorerevampontrack
WearedelightedtoseeSSSdeclinetonarrowin2Q25Ewithsomeinitial
successinthestoreformatupgrades.However,whiletheturnaroundisstillon
trackingeneralandfairlyconstructive,itisjustkindofinlinewiththemarket’s
expectation.Whatismoreimportantisthesustainabilityinto2H25EandFY26E
andpotentialbeatontopofthat.Wewillmonitorthiscloselygoingforward.
MaintainHOLDbutraiseTPtoHK$2.99.
SSShastrendedbetterin2Q25E,potentialturnaroundisstillontrack.
Accordingtothemanagement,TaiErbrand’sSSSdeclinehasstartedto
Accordingtothemanagement,TaiErbrand’sSSSdeclinehasstartedto
narrow,todoubledigit/lowdoubledigit/singledigitinApr/May/Jun2025,
aftera21.2%dropin1Q25.Withthepolicychangeoncuttingback
discountsandpromotionlatelastyear,ASPhasbecomemorestable,and
hencetheSSSdeclinein2Q25Eismostlyrelatedtovolume.However,in
termsofabsolutelevel,thetableturnovershouldhavebottomedoutsince
4Q24andimprovedQoQinto2Q25E.WeestimateTaiEr’stableturnover
tobeataround3.3xin2Q25E,comparedto3.1xin1Q25.Thereasons
behindsuchimprovementwere:1)lowbaselastyear,2)reductioninlevel
ofcompetition,resultinginmuchlowerdragontheASP,3)extended
holidays,inducinghighertourismandcateringrelateddemand,4)spillover
effectfromthehomeappliancessubsidies,whereoverallconsumer
sentimentwasalsoimproved.
Positiveprogresswasmadeinthetransformation.Oneimportant
reformcarriedoutbytheTaiErbrandistheupgradeinstoreformat,which
isnowemphasizingmoreonthefreshslaughterandfreshnessoffood
ingredients,andwebelievetheperformanceissofarsogood.Forthe
larger-sizedones,namelythose3storesopenedinGuangzhou,the
upgradeswillbemorethorough,andthecapexandtimeneededwillalso
behigher(aroundRMB1.8-2mnperstoreand45days).Butthetraffic,in
return,isveryencouraging,wherethetableturncouldbeashighas4-5x/
6-8xduringweekdays/weekend.Forthesmaller-sizedones,TaiErhas
upgradedabout20storessofar,andthecapexandtimeneededaremuch
less(aroundRMB200-300kandjustafewdays),buttheSSScanstill
experienceabout30%boostaftertherevamp.Margin-wise,wedofindit
positivebecausethemanagementdidmentionthata12%increaseinsales
willbeabletocoveralltheadditionalcosts(higherrawmaterialcostsand
D&Aexpenses).Allinall,wedothinkthattherevampispositiveandbelieve
theprogramwillextendtomanyotherstores(oreventoanotherbrandlike
Songhotpot).TaiErinitiallyplanstorevampabout50storesby1H25E,
70+byJul2025,andtheyaretargetingfor100-150morestoresin2H25E.