Macquarie released a research report stating that it gave Yihai International (01579) a “outperforming the market” rating, and it is expected that the company will benefit from Haidilao (06862) to launch a franchise model. Taking into account last year's results and the assumption that profit margin expansion will slow slightly due to marketing activities and pipeline investment, earnings estimates for this year and next two years were reduced by 1.2% and 4.2% respectively, and the target price decreased by 2.2% to HK$18 from HK$18.4.
The report said that due to slowing investment costs and supply chain improvements, the company achieved strong profit margin expansion in the second half of last year. The company declared a final interest rate of 74 cents per share, which meant a significant increase in the dividend payout ratio, which surged from 22% to the previous year to 85%, with a dividend ratio of 5.5%. The report quoted Yihai's management as saying that if there is sufficient cash flow, it will tend to provide attractive returns to shareholders.