CICC: Catering industry continues to differentiate and focus on efficiency optimization and model innovation

The Zhitong Finance App learned that CICC released a research report saying that the 1H25 restaurant industry's performance is basically in line with this forecast. Brand-in-store differentiation continues, benefiting from takeout subsidies and a low base, leading the drink circuit, and marginal improvement in some meals. The brand strategy has shifted to equal emphasis on quality and efficiency, which has achieved remarkable results in reducing costs and increasing efficiency. Continue to pay attention to the achievement of store opening goals for brands with steady management and the effects of some brand adjustments. I recommend Lucky Coffee, Guming (01364), Michelle Group (02097), Yum Sheng China (09987), and Dashi Co., Ltd. (01405).

CICC's main views are as follows:

Brand differentiation continues in the same store, leading the drink circuit, and marginal improvements have been made at some meals

In the first half of 2025, the inflection point of overall consumer demand has not yet arrived. Most drink brands benefited from takeout subsidies and a low base to record outstanding same-store performance, and the same-store data for some dining brands showed marginal signs of improvement. Specifically, the bank estimates that 1H25 Guming/Mixue/Ruixing/Nai Xue's average single store sales increased by about 21%/13%/10% +/ 4% year over year, respectively; the cooking ring benefited from product innovation and operation optimization, and the company announced a high year-on-year unit increase in 1H25; green tea benefited from stable dine-in, continued growth in takeout, and achieved positive growth in May-August. Xiaocaiyuan announced that 1H25 same-store year-on-year ratio was -7% (including the same year-on-year rate in May-June), and was corrected in July; Tongqing Building was affected by the alcohol ban in June, and banquet rooms and private rooms Revenue has been affected to a certain extent.

Cost reduction and efficiency continued to advance, and the profitability of some companies improved markedly

Small vegetable gardens reduced raw material costs through large-scale procurement. The company announced gross margin of +2.6ppt, superimposed automation equipment promotion and personnel optimization, and labor cost ratio optimization 4ppt; green tea benefited from large-scale supply chain procurement, and the company announced that gross margin was +1.4ppt; Taiji, Nai Xue, Xiabuxabu, etc. continued to optimize inefficient stores, 1H25 Taier stores fell 19% year on year, but the operating profit margin at the store level remained flat year on year. Nai Xue and Xiaxiaxia reduced losses significantly (currently the profit margin of Bu Nai Xuexue stores account for 70% +); Helen Si has actively increased Maori's profit margin Rate, reduction of rent costs It also improved human efficiency. Same-store daily sales declined in 2Q25 but store operating profit margin increased year-on-year (from 26% in '24 to 29% in '25).

Focus on the achievement of store opening goals for brands with steady management and the effects of some brand adjustments

1H25 announced the net opening of 5 small vegetable gardens, and the green tea announcement announced the opening of 37 stores in 1H25; the lucky coffee single-store model has achieved certain results. The bank expects the number of stores to reach about 8,000 by the end of the year; the pot circle targets a net increase of 1,000 in 25 years. It is recommended to pay attention to the effects of some brand adjustments. For example, the growth rate of Tai'er's “fresh” stores in July-August was about 10ppt higher than that of traditional stores. The company plans to complete the adjustments of about 150 stores by the end of '25 and all adjustments by the end of '26; Helens optimizes the investment amount of partner stores and restarts direct store development.

risk

The same store and profit margins fell short of expectations; the competitive landscape deteriorated; and the development of the new model fell short of expectations.