Xiabuxiabu Catering Management (China) Hldgs Co Ltd Shs Unitary 144A/Reg S

00520: XHKG (HKG)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	HK$4.00	Gynh	Qxglcgmcd

China Restaurants: Navigating Macroeconomic Headwinds, Long-Term Growth Remains on the Menu

Ivan Su

Jul 30, 2024

Share prices of Chinese restaurant stocks under our coverage (Yum China, Haidilao, Jiumaojiu, and Xiabuxiabu) have declined over the past three months due to ongoing macroeconomic challenges in China, raising concerns about downtrading and increasing promotions that could impact both customer traffic and margins. While further sales deterioration is possible, our 2024 forecasts for these stocks have already accounted for continued weaknesses in traffic and pricing.

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