UBS has reiterated its "Buy" rating on XIAOCAIYUAN (00999) with a target price of HK$14. The company's management reaffirmed its goal to expand to 800 restaurants by the end of 2025 and 1,000 by the end of 2026, with an ambitious long-term target of reaching 3,000 directly operated restaurants within 5-7 years.
During UBS's Asia Consumer, Internet & Gaming Corporate Day, XIAOCAIYUAN's management emphasized its focus on delivering delicious and affordable food to customers. The company plans to reduce the average spending per customer from RMB 57 in the first half of the year to RMB 50-55, which may slightly impact gross margins but is expected to boost foot traffic. XIAOCAIYUAN primarily targets consumers with monthly incomes ranging between RMB 3,000 and RMB 5,000.
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