05 Apr 2024

Xiabu’s FY23 revenue was up by 25.3% YoY to Rmb5,918m, mainly driven by i) a net open of 72 restaurants to a total of 1,098 by end-FY23; and ii) higher traffic per store. Revenue from its main 2 brands, Xiabuxiabu and Coucou, accounted for 95.9% of total sales GPM was up by 0.7ppt YoY to 62.6%, thanks to reduction in average purchase price of raw materials through taking advantage of centralized procurement and increase the number of strategic suppliers. Staff costs up by 19.9% YoY with more openings during the year, with staff cost ratio down 1.4% ppt YoY to 31.5% on more efficient scheduling. Rental cost ratio remained flat at 5.3%. Other expenses as a % of revenue down 0.2ppt YoY to 7.3%, with A&P spending continuing to increase amid competition. As a result, Net loss in FY23 has been narrowed to Rmb199m from Rmb353m. Xiabu declared a final-DPS of Rmb0.028/share.

CROSBY Research – Xiabuxiabu (520 HK/BUY): FY23 net loss narrowed on higher revenue and GPM