In a report released today, Walter Woo from CMB International Securities upgraded Jiumaojiu International Holdings Ltd. to a Buy, with a price target of HK$3.18.
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Walter Woo has given his Buy rating due to a combination of factors that suggest a positive outlook for Jiumaojiu International Holdings Ltd. The stabilization of Tai Er’s same-store sales (SSS) and improvement in restaurant operating margins in the first half of 2025 are key indicators of a potential turnaround. The company is implementing strategic changes, such as revamping Tai Er stores, which is expected to enhance sales growth significantly by the end of 2025.
Moreover, the anticipated reduction in impairment losses from store closures and the introduction of a new store format for Song hotpot are promising developments. The launch of a new brand in late 2025, which aligns well with the company’s existing supply chain, further supports the growth potential. Despite some challenges with store closures, these positive signs have led Walter Woo to adopt a more optimistic view of the company’s future performance.