Morgan Stanley: Short-term pressure on Haidilao (06862) is an opportunity for absorption. Target price is 21.5 Hong Kong dollars.

Morgan Stanley released a research report stating that HAIDILAO (06862) is expected to see a 1% year-on-year increase in revenue in 2025, reaching 42.8 billion RMB (the same below), with a net profit of 4.05 billion RMB, in line with the bank's and market expectations. Morgan Stanley believes that the most surprising thing is the dividend payout ratio, which is expected to decrease from 95% in 2024 to 86% in 2025, likely due to the company's plans to increase capital expenditure, invest in automation, efficiency improvements, and opening new brand stores. The bank will focus on the management's outlook for same-store productivity in 2026, network expansion plans, and profit margin guidance at the earnings conference; Expectations that the stock price may come under pressure in the short term present a buying opportunity, as the company is investing in future growth. Maintain a "hold" rating with a target price of 21.5 Hong Kong dollars.