DBS: Xiabu Xiabu Catering Management China Holdings Co Ltd – Buy Target Price HK$5.90

Xiabuxiabu (520.HK) Net loss in-line with profit warning

XBXB (520.HK) Net loss in-line with profit warning 

Financial overview

• XBXB net loss of Rmb280m in 1H22 is in-line with earlier profit warning. 
• Revenue declined 29% to Rmb2,156m in 1H22, whereby XBXB brand declined 43%, while Coucou brand declined 9% over the same period, due to pandemic control measures. 
• In 1H22, the Group opened 6 XBXB and 15 Coucou outlets, and closed 37 XBXB outlets.
• Gross profit margin contracted 0.4ppt to 62.4%. 
• The Company declared interim dividend of Rmb0.028/sh. 

XiabuXiabu brand performance 

• XBXB revenue declined 43% to Rmb1,049m. 
• Table turnover contracted to 1.9x in 1H22, versus 1H21 of 2.3x. Of which, Tier 1/2/3 contracted to 2.2x/1.8x/1.5x (1H21: 2.8x/2.1x/1.9x)
• Average spending per customer rose by 1.4% to Rmb63.1/customer.
• Same store sales contracted 44%. 

Coucou brand performance

• Coucou revenue declined 9% to Rmb1,024m in 1H22. 
• Average spending per customer rose 8% to Rmb147. 
• Table turnover contracted to 1.9x (1H21: 2.6x). 
• Same store sales declined 24.8%.