Goldman Sachs' analyst rating is based on several key observations:
1. Catering Sales Growth: The firm anticipates that catering sales growth in Mainland China will accelerate to 4.2% YoY, indicating a positive trend compared to last year's 3.2%. This growth is attributed to the stabilization of catering demand over recent months.
2. Price Hikes: The industry is experiencing price increases, which Goldman Sachs believes are a response to higher operational and raw material costs, as well as an increase in food delivery orders. This suggests a resilient demand despite overall consumption not showing significant improvement.
3. Optimism for Specific Stocks: Goldman Sachs is particularly optimistic about GUMING and MIXUE GROUP, citing GUMING's strong track record in expanding consumption scenarios, launching new products, and having significant store expansion potential. The firm has raised its core earnings estimations for GUMING for 2025-2027 by 4-6%.
4. Target Price Adjustments: The broker has adjusted target prices for GUMING and MIXUE GROUP, reflecting confidence in their growth prospects, and has placed them on a Conviction List Buy and Buy rating, respectively.
5. Neutral Rating for HAIDILAO: In contrast, Goldman Sachs maintained a Neutral rating for HAIDILAO, citing that building new brands takes time and that its core brand is at a relatively mature stage, which may limit growth potential.
Overall, the ratings reflect a combination of anticipated growth in the catering sector, specific company performance metrics, and market conditions.
