CICC Anticipates Improved Earnings for CHABAIDAO (02555.HK) in 2026, with Dividend Payout Ratio Projected at 60-80% Over the Next Three Years
CICC's Participation: CICC recently participated in CHABAIDAO's Investor Day, discussing the company's management and its current adjustment period expected to last until 2025.
Profitability Improvements: The company is anticipated to enhance profitability through various strategies, including franchisee subsidies recovery and standardized product offerings, with significant improvements expected by 2026.
Dividend Strategy: CHABAIDAO aims for a dividend payout ratio of 60-80% over the next three years, offering a current dividend yield of 5.4-7.2%, indicating potential investment value.
Target Price Adjustment: CICC has reduced its target price for CHABAIDAO by 23% to $9.3, maintaining an Outperform rating, with projected PE ratios of 14x for 2025 and 12x for 2026, suggesting a 31% upside.
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HSI Rises Over 600 Points; Tea Beverage Stocks Remain Weak; MIXUE Declines by 10%
Hong Kong Stock Market Performance: The Hong Kong bourse experienced a rally on the 28th, with the HSI reaching a 4.5-year high of 27,757, up 630 points or 2.3%, and a turnover of HK$176.495 million.
MIXUE GROUP Stock Decline: MIXUE GROUP's stock opened 2.5% lower and fell to HK$396, down 10.6%, following a downgrade by UBS, which cited potential short-term pressures and reduced profit forecasts.
Pressure on Tea Beverage Stocks: Several tea beverage stocks, including CHABAIDAO and GUMING, faced declines of 2-3%, diverging from the overall market trend.
Short Selling Activity: The short selling ratios for various stocks, including MIXUE GROUP and others in the tea beverage sector, indicate increased market skepticism, with significant short selling reported.
G Sachs Maintains Buy Rating on GUMING and MIXUE GROUP; Anticipates Decline in Same-Store Sales Next Year
Expert Meeting on Beverage Market: A recent expert meeting highlighted expectations that subsidies in China's fresh beverage market will phase out over time, with niche brands potentially achieving profitability within 6-8 months.
Food Delivery Losses Forecast: Goldman Sachs predicts that losses for food delivery companies like Alibaba and Meituan will decrease by the end of December 2026, despite a reduction in subsidies impacting same-store sales.
Sales Projections for GUMING and MIXUE: The report forecasts a decline in same-store sales for GUMING and MIXUE Group by 6% and 4% respectively in 2026, while both companies are expected to open thousands of new stores in untapped markets.
Investment Ratings: Goldman Sachs maintains a Buy rating for both GUMING and MIXUE Group, setting target prices of HKD32 and HKD579 respectively for the next 12 months.
