固态SSSG和边际趋势可能会持续

Solid SSSG and margin trend will likely sustain Target PriceHK$10.74(Previous TPHK$10.54)Up/Downside29.9%Current PriceHK$8.27 1H25 resultswereinline with profit alert, but the underlyingfactorslike GPmargin and economies of scale areimpressive. Hence with a likely better andpositive SSSG, plus the continuedmargin improvements in 2H25E, we remainconfident about Green Tea’s future development.We maintain BUY and raiseTP to HK$ 10.74, based on a 13x FY25E adj. P/E (unchanged). SSSG remained positive in Julto MTD inAug 2025, even though theASP was still falling.ASP dropped by around 4.5% YoY to RMB 55.5 in1H25, and we believe it is still falling in Julto MTD inAug 2025, because:1) more stores were being opened in the lower-tiercities and 2) sales mixfrom delivery/ one-person mealshas kept onincreasing (to about 23%/40%).However, despite the ASP downtrend, the SSSG has managed toturn positive since Apr 2025 and remained so in Julto MTD inAug 2025,which is still on track to meet our assumption of positive SSSG in FY25E. China Consumer DiscretionaryWalter WOO(852) 3761 8776walterwoo@cmbi.com.hk Stock Data We are still confident about sales growth and margin improvement in2H25E.Growth drivers for sales in 2H25E include: 1) robust delivery salesorders, 2) more new and innovative product launches, 3) continuedbenefitsfrom the profit sharing incentive schemes started back in 2023, 4) fasteroverseas expansion (number of oversea stores will reach 15 by FY25E, vsoriginal plan of 7;sales per store in Hong Kong could be as high as HK$2mn, more than doublingthat in mainland China),and 5) launch of morenew brandsin mainland China and overseas.We are even more positiveabout the margin improvements in 2H25E, aided by: 1) decent GP marginexpansion(drag from the delivery sales was minimal),2)continuedimprovements in rental expenses (as some new stores can secure a rent tosales ratio of 6%, vs 8% to 9% historical average), 3) D&A expensescontraction (thanks to less and more efficient use of capex per store), 4)economies of scale(from warehousing expenses to headquarter costs), and5) higher sales mix from smaller-sized stores (which tendtohave a higherOP margin). Hence, we are now forecasting a 0.2ppt improvement in NPmargin in 2H25E, to about 9.1% (vs 8.9% in 2H24). Maintain BUY and raise TPtoHK$ 10.74, based on 13x FY25E adj. P/E(unchanged).We are revising up FY25E/ 26E/ 27E net profit forecasts by2%/ 3%/ 3%, in order to factor in: 1) better-than-expected GP margin, 2)greater-than-expected economiesof scale.Hence our new TP is at HK$10.74, based on 13x FY25E adj. P/E (unchanged). The stock is currentlytrading at 10x FY25E P/E, still far below peers’ average of 18x and its 3-year sales CAGR of 25% during FY24-27E. Recent reports:Jiumaojiu (9922 HK)-Multiple positivesigns suggest a turnaround(26Aug25) Yum China(9987 HK)-Target kept butcash return may be limited(6 Aug25) Green Tea Group (6831 HK)-1H25Eprofit comes as surprise with positive2H25E outlook(4 Aug25) Luckin Coffee (LKNCY US)-Sales arebooming but costs are also rising(31 Jul25) Jiumaojiu (9922 HK)-SSS recovery andstore revamp ontrack(12 Jun25) Green Tea Group (6831 HK)-A casualChinese cuisine leader of great value(24 Jun25) 1H25 resultsroughly inline but the underlying is good.In 1H25, Green Tea’ssales increased by 23% YoY to RMB 2.3bn and net profitrocketed by 34% YoY toRMB 234mn, both inline with the previously announced positive profit alert.In termsof segment, dine-in sales growth was relatively slow, at 13% YoY,while the deliverysales growth was extremely robust, at 74% YoY in 1H25. In termsof opex, thegreater-than-expected staff cost was offset by the better-than-expected rental andD&A expenses.Overall speaking,in 1H25, we were impressed by: 1) the better-than-expected GP margin, which surged to about 69.7% (vs CMBI est. 69%), due tostronger-than-expected economies of scale and purchasing power, as well as a betterproduct mix (higher-margin items like shrimps and ribs contributed more sales) andthe stunning improvements in NP margin (up 0.8ppt to 10.2%) esp. when the SSSstill fellbyabout 1%. Earnings revision Results Summary Assumptions Valuation Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to the securities or issuer that the analyst covered in thisreport: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to the