Cathay Haitong Securities: Maintaining Green Tea Group's (06831) “Gain” Rating Target Price of HK$12.40

The Zhitong Finance App learned that Cathay Pacific Haitong Securities released a research report to maintain the Green Tea Group (06831) “increase in holdings” rating. Referring to the valuation of comparable companies in the same industry, PE is 12 times that of 2026, corresponding to the target price of HK$12.40. The bank predicts that the company's net profit for 2026-2028 will be 598/730/887 million yuan respectively, up 23%/22%/20% year-on-year respectively. The company achieved revenue of $2,675 billion in 2026H1, up 16.8% year on year; net profit to mother of 291 million yuan, up 24.4% year on year; adjusted net profit of 294 million yuan, up 16.9% year on year, and adjusted net interest rate remained flat at 11.0% year on year; declared a 2026H1 interim dividend of HK$0.30 per share, with a dividend rate of about 55% based on adjusted net profit.

Cathay Pacific Haitong Securities's main views are as follows:

Performance brief

2026H1 revenue was 2,675 million yuan, up 16.8% year on year; net profit to mother was 291 million yuan, up 24.4% year on year; adjusted net profit was 294 million yuan, up 16.9% year on year, and adjusted net interest rate of 11.0% remained flat year on year. The company declared a 2026H1 interim dividend of HK$0.30 per share, with a dividend rate of approximately 55% based on adjusted net profit.

The number of stores has increased, and the new stores have performed well

① Revenue split: 2026H1 restaurant's operating revenue was 2,014 million yuan, up 14.6% year on year; takeout revenue was 651 million yuan, up 24.1% year on year, takeout revenue accounted for 24.3%, up 1.4 percentage points year on year; Hong Kong, Macao and overseas market revenue was 163 million yuan, up 266.5% year on year. ② Number of stores: As of 2026H1, there were 733 stores, an increase of 46.0% year-on-year, and 131 new stores were opened in the first half of the year. ③ Same-store sales: In 2026H1, same-store sales fell 9.7% year-on-year, mainly affected by the slow recovery of the consumer market and the encryption of store openings. ④ New stores: The average monthly floor rate of new shopping mall stores opened in 2026H1 is 1,868 yuan/square meter, which is 47.3% higher than stores opened before 2026, and the average cash payback period is 12.5 months. ⑤ Turnover rate: The overall turnover rate was 2.9 times per day, the same as the previous year (increase of 0.2 times). ⑥ Per capita consumption: Overall per capita consumption was 54.4 yuan, down 2.0% year on year; if we only look at restaurant business, per capita consumption was 58.5 yuan, up 0.9% year on year.

Gross margin was optimized year-on-year, and adjusted net margin control was stable

2026H1 gross profit margin was 68.8%, up 0.8 percentage points year on year; employee costs accounted for 26.1%, up 0.3 percentage points year on year; depreciation of right to use assets accounted for 5.0%, up 0.2 percentage points year on year; other rent accounted for 1.9%, down 0.2 percentage points year on year; other assets accounted for 5.4% discount, up 0.5 percentage points year on year; water, electricity and gas expenses accounted for 3.5%, the same year on year; takeout business expenses accounted for 4.3%, up 0.5 percentage points year on year.

Risk Alerts

Consumer demand is weak, industry competition is intensifying, and food safety issues.