Huaxing Securities: Maintains XIABUXIABU "Hold" Rating with a Target Price of HKD 1
Huaxing Securities maintains a "Hold" rating on XIABUXIABU, with a target price of HKD 1. It is expected that the revenue for 2025-27 will be HKD 4.04 billion, HKD 4.16 billion, and HKD 4.25 billion, respectively, with a net loss attributable to the parent company of HKD 145 million and HKD 66 million for 2025/26, and a net profit of approximately HKD 2.4 million in 2027. The number of XIABUXIABU stores is expected to bottom out at 760 in 2024, and if there is a subsequent net increase, development should be monitored. The number of Coucou brand stores is still shrinking, and its subsequent development needs attention, with potential investment opportunities to be observed
According to the Zhitong Finance APP, Huaxing Securities released a research report maintaining a "Hold" rating on XIABUXIABU (00520) with a target price of HKD 1.00, corresponding to 0.2 times the 2026 P/S. The firm expects the company's revenue from 2025 to 2027 to decline by 15.0% year-on-year in 2025, then increase by 3.0% in 2026 and 2.0% in 2027, reaching HKD 4.04 billion, HKD 4.16 billion, and HKD 4.25 billion respectively. It anticipates a net loss attributable to shareholders of HKD 1.45 billion and HKD 660 million in 2025 and 2026, respectively, and a net profit attributable to shareholders of approximately HKD 2.4 million in 2027.
The number of XIABUXIABU brand stores peaked at 1,061 in 2020 and began to shrink, reaching a low of 760 stores in 2024. In the first half of 2025, the number of stores just started to net increase, reaching 763. The firm believes that if the number of XIABUXIABU stores continues to net increase or stabilizes at the level of the first half of 2025, it indicates that the phase of adjustment has been completed, and attention can be paid to the subsequent development of XIABUXIABU. As for the Coucou brand, it peaked at 257 stores in 2023 and then began to shrink, with the number of brand stores reducing to 197 in 2024, and further shrinking to 174 in the first half of 2025. The firm believes that the number of Coucou brand stores has not yet reached a bottom, and attention can be paid to the brand's subsequent development. When the Coucou brand rebounds after hitting the bottom, it may also be a time for improvement in the company's fundamentals. Historically, after the fundamentals hit the bottom, the probability of future marginal improvement is much higher than the risk of continued marginal decline, indicating potential investment opportunities for the company, and the firm suggests continued monitoring
