GLMS SEC released a research report stating that after 2023, valuations of Chinese catering companies declined rapidly, and the sector's overall valuation is currently at a low level. Combined with previous analysis, the catering industry shows signs of price stabilization and volume recovery, with marginal improvements in catering consumption. The firm believes that high-quality leading companies have higher confidence in delivering on their performance and recommends focusing on: GUOQUAN (02517), GREEN TEA GROUP (06831), and HAIDILAO (06862). The main views of GLMS SEC are as follows:
Changes in Catering Supply and Demand: Intensified Elimination, Price Stabilization Since 2023, the catering industry has experienced a systematic decline in average spending per customer. Consumer-initiated downgrading and brand price reductions have jointly compressed the average spending space. However, based on leading companies' pricing adjustments and industry data from Hongcan Network, the rate of price decline in the industry is expected to narrow significantly from the second half of 2024 to 2025. Data from February 2026 shows that CPI has rebounded to around 1%, and catering revenue growth has recovered, potentially indicating marginal improvement in price pressure and a prospective recovery in catering industry profits. Meanwhile, since 2023, the average lifespan of catering outlets has shortened to 15-16 months, and newly opened catering businesses face liquidation pressure. In 2025, approximately 2.4 million new catering outlets were registered nationwide, indicating a cooling in market entry sentiment.
Industry Development Trends: Incremental Delivery, Efficiency Revolution Euromonitor data indicates that from 2014 to 2025, the proportion of online orders in China's catering industry continued to rise, reaching 29% in 2025. This trend is even more pronounced among listed catering companies. In the foreseeable future, the firm believes it is highly likely that the proportion of delivery orders will continue to increase. Using a model for affordable Chinese full-service dining as an example, the firm calculated the impact of delivery order proportion on operating profit margin (OPM). According to the calculations, the period where delivery orders account for approximately 25%-35% represents a红利期 for delivery expansion; the reasonable upper limit for the expansion of delivery proportion is around 35%-40%. If the delivery proportion exceeds 40%, growth in delivery revenue comes at the cost of OPM, and the profit penalty accelerates as the delivery proportion increases. Concurrent with changes in front-end scenarios, cooking robots and intelligent systems are driving a back-of-house efficiency revolution, effectively reducing meal preparation time and labor costs.
Dynamic Update: Positive Changes at HAIDILAO Each round of personnel changes at HAIDILAO corresponds to an adjustment in the company's strategic direction. The return of the founder to the helm is expected to leverage their deep experience in the catering industry, management insight, strong execution capabilities, and resource mobilization abilities to steer the strategic direction in an era of存量竞争, stabilize the development of the main brand, and accelerate the growth of the second curve. Based on operational tracking, for the main brand, HAIDILAO's average spending per customer stabilized year-on-year in the second half of 2024, and customer traffic increased during the 2026 Spring Festival holiday, achieving a good start. Regarding new brands, they cover major catering segments such as hot pot, sushi, barbecue, and mini hot pot, possessing significant expansion potential. Simultaneously, the company has demonstrated a willingness to reward shareholders with high dividend payouts. As the dividend payout intensity has increased, the company's dividend yield has risen significantly from less than 1% in earlier years to around 5% in recent years, enhancing its margin of safety advantage.
Risk Warning: Risks include fluctuations in the macroeconomy and consumer willingness, intensifying market competition, rising raw material costs, and food safety risks.
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