CITIC Securities initiates coverage on GREEN TEA GROUP with a "Strong Buy" rating and a target price of HKD 11.8

The research report from China Merchants Securities points out that GREEN TEA GROUP (06831.HK), as a leader in domestic Chinese casual dining, has long focused on the fusion cuisine sector, primarily deepening its efforts in the three major regions of East China, North China, and Guangdong, to create high cost-performance Chinese fusion dishes. In the future, it is expected to continue store expansion through strategies such as small store formats, regional densification, expansion to other locations, and market penetration.

The firm believes that the group's supply chain will further mature with the establishment of a central kitchen in the future, which is expected to drive continuous revenue expansion and accelerate profit release. Referencing the industry peers' corresponding 2025 price-to-earnings ratio of 15 times, a target price of HKD 11.8 is set, with an initial coverage rating of "Strong Buy."