Company Reports

We believe Jiumaojiu’s multibrand strategy positions it well to meet the changing demands of its customers. Continued investments in brand development, product innovation, and supply chain capabilities represent a few of the efforts likely to shore up the group’s competitive positions.

Chinese diners are becoming more discerning, according to Meituan data. They increasingly assess food quality, service, and value for money, making it harder for weaker restaurant concepts to succeed through novelty, marketing, or rapid store openings alone.

Revenue fell 13% and operating profit fell 19% year over year in the first half of 2026 as Jiumaojiu closed underperforming restaurants. Profit fell faster than sales because of operating deleverage. At Tai Er, which is more than 70% of sales, both same-store sales and restaurant-level margin rose.

China's restaurant spending growth slowed to 1% in June, but Tai Er is outperforming the industry. Jiumaojiu's flagship brand continues to deliver mid- to high-single-digit same-store sales growth in mainland China.

We believe Jiumaojiu’s multibrand strategy positions it well to meet the changing demands of its customers. Continued investments in brand development, product innovation, and supply chain capabilities represent a few of the efforts likely to shore up the group’s competitive positions.

Jiumaojiu put up a stronger first-quarter operational update. Tai Er, its flagship brand, delivered 7% same-store sales growth, ending a two-year run of declines. The smaller concepts, meanwhile, remained under pressure.

We believe Jiumaojiu’s multibrand strategy positions it well to meet the changing demands of its customers. Continued investments in brand development, product innovation, and supply chain capabilities represent a few of the efforts likely to shore up the group’s competitive positions.

Jiumaojiu's second-half 2025 revenue fell 18%, but the turnaround is gathering momentum. In the first quarter of 2026, the group's largest revenue contributor, Tai Er, saw same-store sales growth accelerate to low-double-digit percentages, up from a 3% decline in the fourth quarter of 2025.

Jiumaojiu reported sequentially improved fourth-quarter operations, with Tai Er’s same-store sales decline narrowing to negative 3% year over year, from negative 9% in the previous quarter. Performance at its other two brands—Jiu Mao Jiu and Song Hot Pot—remained subdued but stable.

China’s domestic tourist spending during the 2026 New Year holiday rose 12% compared with 2019, accelerating from the 9% increase recorded during the June 2025 Dragon Boat Festival—the most comparable holiday.

We believe Jiumaojiu’s multibrand strategy positions it well to meet the changing demands of its customers. Continued investments in brand development, product innovation, and supply chain capabilities represent a few of the efforts likely to shore up the group’s competitive positions.

Jiumaojiu reported sequentially improved first-half 2025 results. The year-over-year revenue decline narrowed to 10%, while the operating margin rose to 4.7% from 4.2% in the second half of 2024.

We believe Jiumaojiu’s multibrand strategy positions it well to meet the changing demands of its customers. Continued investments into brand development, product innovation, and supply chain capabilities represent a few of the efforts likely to shore up the group’s competitive positions.

Macroeconomic indicators remain weak for restaurant operators in China, though conditions are no longer worsening. In response to government efforts to curb excessive competition, food delivery platforms have scaled back their promotional activities.

Jiumaojiu’s second-half earnings were in line with its earlier profit warning, which had only disclosed top- and bottom-line figures. In its full earnings release, the company reported an operating profit of CNY 127 million, a 55% decline year over year.

Jiumaojiu issued a profit warning for 2024, reporting a 1% revenue increase but a sharp decline in net profit to CNY 50 million, down from CNY 454 million in 2023. The drop is mainly attributed to weaker macroeconomic conditions, heightened competition, and impairment losses.

Additional signs indicate that China's restaurant industryhas been stabilizing over recent months, even in the absence of meaningful government stimulus.

We believe Jiumaojiu’s multibrand strategy positions it well to meet the changing demands of its customers. Continued investments into brand development, product innovation, and supply chain capabilities represent a few of the efforts likely to shore up the group’s competitive positions.

Jiumaojiu reports disappointing fourth-quarter 2024 operating figures with same-store sales declining by over 20% year on year, significantly underperforming the industry average. Tai Er's same-store sales declined 25%, Song Hotpot sales dropped 27%, and the Jiumaojiu brand's sales fell 19%.

Encouraging Golden Week data from leading restaurant operators in China reinforces our above-consensus earnings estimates and positive outlook for the sector. Our top pick remains wide-moat Yum China, given its diverse store formats and robust supply chain, which provide resilience during economic downturns and enable rapid expansion in prosperous times. Shares of Yum China are trading at a 40% discount to our $76 per share fair value estimate.