CICC: Maintaining the Chabaidao (02555) “Outperform the Industry” rating target price of HK$9.3

The Zhitong Finance App learned that CICC released a research report stating that it maintained Chabaidao (02555)'s 25/26 net profit of 88/1.06 billion yuan. The current transaction is 11/9 times 25/26 P/E, and the target price is HK$9.3, corresponding to 14/12 times 25/26 P/E and 31% upward space, maintaining an industry performance rating.

CICC's main views are as follows:

In 2024-2025, the company is in a period of deep adjustment. It has now seen initial results, and further improvements are expected in 2026

At 2H25, the company actively adjusted the R&D organizational structure and new mechanism, from the traditional structure of R&D, brand and store to the integration of production and research centers, with data analysis, field research, and systematic capacity building as the core, to predict market trends in advance through consumer insight. The bank believes that compared to the previous supply-chain-driven modernization mechanism, the current new product decision-making mechanism is more market-based and can meet the real needs of consumers. For example, the company's recently launched solid poplar nectar. The product innovation level has become the core capability of the company's training over the past two years. In November, the company's single store accelerated to double-digit growth, driven by new products.

Explore multi-scenario sales channels to improve the quality of store operations

In '26, the company is expected to boost the coffee category, using fresh milk and fresh fruit to make up for morning turnover and increase the scale effect of the store. Currently, 200 stores have coffee machines. On the basis of zero promotion, the average number of stores is over 30 cups per day. The company expects to add 1,500 to 2,000 new stores to install coffee machines next year. The company plans to broaden the price band downward, mainly based on the demand for 6-10 yuan price band water in the offline market. The goal of store expansion in '26 is to increase the size of the 3-4 tier by about 11-15%, and the number of cities below tier 4 to increase by about 6-10%. This year, the membership price system was restructured to guide consumers to place orders through online and offline price stratification. As the main product in '26, online activities will be tightened, offline activities will be increased, and consumers will be encouraged to spend in stores.

Improve the quality and efficiency of channel operations and increase store profits

In 2025, the company withdrew franchisee subsidies and improved store profitability through standardized production, intelligent tea making machines, supervisory function reform, and semi-industrial raw material processing. The bank expects the profitability of stores and companies to improve in 2026. The company is expected to reach a dividend ratio of 60-80% in the next 3 years, corresponding to the current dividend rate of 5.4-7.2%, and the investment value is outstanding.