Guoyuan International: Give Haidilao (06862) a “buy” rating with a target price of HK$18.06

The Zhitong Finance App learned that Guoyuan International released a research report saying that Haidilao (06862) is seeking new impetus for growth by optimizing stores, creating differentiated themed stores, and promoting the “Red Pomegranate Program” to incubate multiple brands. In the incubation process of different new brands, the aim is not only to cultivate the company's second growth curve, but also to effectively build synergy between businesses. A “Buy” rating was given, and the target price was HK$18.06.

Guoyuan International's main views are as follows:

Haidilao stores cultivate differentiation and create unique themed stores

As of 25H1, the total number of restaurants in the company was 1,489, and the number of Haidilao (self-operated) /Haidilao (joined) /other new brands was 1322/41/126, respectively. 25H1, the company's store expansion adopted a dynamic optimization approach, with the aim of focusing on store upgrades and creating differentiated Haidilao stores. On the scene side, the company creates themed store types such as supper scenes, parent-child interaction, and pet friendliness to meet the diverse needs of existing customers and potential consumers.

The red pomegranate plan is progressing steadily, focusing on the growth of the new brand

The company is promoting a multi-brand development strategy. Since the launch of the Red Pomegranate Plan last year, several sub-brands, such as Yanjiao Yakiniku Restaurant, Huohiaiguan, and Jiaoxiao Hot Pot, have launched, covering different consumption scenarios such as regular meals, light meals, and fast food. Among them, Yan invited the Yakiniku Restaurant as a benchmark project to attract different customer groups using the “yakiniku+shampoo+night bar” complex model. Currently, it has operated more than 70 stores. The incubation of different new brands is not only aimed at cultivating the company's secondary growth curve, but also forms a synergetic effect.

Investment advice

The company adopts a parallel strategy of store optimization and expansion. The main brand, Haidilao, continues to upgrade stores and incubates sub-brands to explore new market segment opportunities. The current stock price corresponds to a 25E dividend rate of about 6%. The bank expects the company to achieve net profit of $44.34/48.57/5.342 billion in 2025-2027, respectively, with a target price of HK$18.06 per share, corresponding to about 20 times PE over 25 years, with room for an increase of 23.7% from the current price.