BOC International: Maintaining the Jiumojiu (09922) “Neutral” Rating Target Price of HK$1.30

The Zhitong Finance App learned that BOC International released a research report saying that Jiumaojiu (09922) released the results for the first half of 2026, which was in line with expectations as a whole. Driven by cost optimization and Taiji's operational improvements, the company's profitability continues to recover. 1H26 achieved revenue of 2.39 billion yuan (RMB, same below), -13.2% year over year; net profit to mother +24.9% to 75.8 million yuan, net interest rate increased to 3.2%; and store-level operating margin was +1.4 percentage points year over year to 13.2%. BOC International kept its profit forecast unchanged, maintaining a target price of HK$1.30 and a “neutral” rating.

The main views of BOC International are as follows:

1H26's performance was in line with expectations, driven by cost optimization and Taier's operational improvements

Despite recording a decline in revenue, the company's profitability continued to improve. The store-level operating profit margin was +1.4 percentage points year over year to 13.2%, the company's net profit to mother +24.9% year-on-year to 75.8 million yuan, and the net interest rate rose to 3.2%. Overall, the company's operating quality has improved compared to last year, and profitability has been restored, mainly driven by the Taier brand; however, adjustments to Jiumaojiu and Hot Pot have not been completed, and the long-term contributions of the new models and other new brands still need to be further verified. As a result, the bank kept its profit forecast unchanged, maintaining a target price of HK$1.30 and a neutral rating.

The effects of Tai'er's reforms in mainland China were further released

1H26 Taiji achieved revenue of about 1.8 billion yuan, a year-on-year decrease of 7.8%, mainly affected by the decrease in the number of stores and the restructuring of some stores. Among them, 1Q-2Q26 in mainland China achieved double-digit year-on-year growth for two consecutive quarters, indicating that demand in existing stores is recovering; at the same time, the turnover rate increased from 3.1 to 3.5 times, and the overall store operating margin increased from 13.4% to 14.9%. The company has now completed the upgrade of 351 new model stores in Tai'er in the mainland, and plans to basically complete the upgrade of the remaining existing stores within 2026. The company recently launched its first 6.0 model store, which is expected to further improve customer flow and single-store profit margins. The company maintains its profit margin target. The target is to raise the profit margin of store operations to 16% in 2026, and further improve to reach 17%-18% in 2027.

Jiumojiu and Nao Hot Pot are still in the adjustment period

1H26's revenue was about 180 million yuan, down 22.0% year on year, and the operating profit margin of the store fell from 12.7% to 10.2%, mainly affected by the withdrawal of inefficient stores and pressure on the same store model. By the end of August, the new model had opened 7 stores. The market feedback was positive, and the turnover rate reached 4.5 times, higher than the same period of the previous model. The company's 2H26 will focus on refining the “1+N” product matrix and model adjustment direction; the company 2H26 will focus on refining the “1+N” product matrix and single-store profit model. On the hot pot side, 1H26's revenue fell 36.4% year on year to 260 million yuan, and the store operating profit margin remained stable at 3.5%; the company took the initiative to close 8 inefficient stores, and is expected to continue to close 10+ inefficient stores in the second half of the year, and refocus on spicy hot pot and enhance the brand experience. The bank believes that it will still take time to adjust the two brands, but as store adjustments progress, the drag on the group's profits is expected to gradually narrow.