Cafe de Coral Holdings Ltd. (0341) AI Stock Analysis

• Market Cap: HK$4.12B
• Dividend Yield: 7.94%
• Average Volume (3M): 620.74K
• Price to Earnings (P/E): 15.2
• Beta (1Y): 0.61
• Revenue Growth: 2.29%
• EPS Growth: 35.94%
• Country: HK
• Employees: 19,189
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Restaurants
• EPS (TTM): 0.47
• Shares Outstanding: 580,004,000
• 10 Day Avg. Volume: 500,525
• 30 Day Avg. Volume: 620,741
• PEG Ratio: 0.42
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$8.55
• Price Target Upside: 19.41% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Cafe de Coral Holdings Ltd. has a robust financial performance, with strong improvements in income, balance sheet, and cash flow metrics, which contributes significantly to its overall score. However, technical analysis indicates a bearish trend, which slightly offsets the financial strengths. The fair valuation with a reasonable P/E ratio and attractive dividend yield also supports the score.

Positive Factors

Dividend Yield

Analyst recommends maintaining a BUY rating due to its relatively high dividend yield of around 7% and defensive business nature.

Promotional Strategies

CDC aims to drive greater promotional campaigns to recapture store traffic, with forecasts of HK sales and segment profit growth of 3% and 2%, respectively.

Store Expansion

CDC will place greater effort into deeper penetration in the Greater Bay Area, supported by net store expansion, with a sales CAGR forecast of 2%.

Negative Factors

Cost and Pricing

The room for Average Selling Price hike is limited due to a promotional environment and cost-conscious consumers.

Earnings Forecast

Earnings for FY3/25 are cut by 35% on softer sales expectations, with key risks including slower-than-expected sales growth.

Macro Environment

The macro environment in Hong Kong may still be lingering with GDP growth at 2.5% and weak property prices, affecting the company's outlook.

Cafe de Coral Holdings Ltd. Business Overview & Revenue Model

Company Description

Cafe de Coral Holdings Ltd. (0341) is a leading and well-established fast-food restaurant group based in Hong Kong. The company operates a diverse portfolio of quick-service restaurants, casual dining outlets, and institutional catering services. Its core brand, Cafe de Coral, is recognized for offering affordable and convenient Hong Kong-style fast food. The company also manages other popular chains, providing a variety of cuisines to cater to different consumer preferences.

How the Company Makes Money

Cafe de Coral Holdings Ltd. generates revenue primarily through the operation of its fast-food and casual dining restaurants across Hong Kong, Mainland China, and other regions. The company earns money by selling food and beverages directly to consumers. These sales are supported by a strategy focused on high-volume, low-margin offerings that appeal to a broad customer base, ensuring steady foot traffic and repeat business. In addition to its restaurant operations, the company also engages in institutional catering, providing meal services to schools, corporations, and other organizations. Strategic partnerships with suppliers and real estate developers help secure prime locations and cost-effective supply chains, further enhancing profitability. The company may also explore opportunities for revenue through franchising, though its primary focus remains on direct operations.

Cafe de Coral Holdings Ltd. Financial Statement Overview

Summary

Cafe de Coral Holdings Ltd. demonstrates strong recovery and growth in revenue, with an 8.31% increase from the previous year. The company has significantly improved profitability metrics, including EBIT and EBITDA margins, alongside a net profit margin of 3.80%. The balance sheet shows a stable financial position with a moderate debt-to-equity ratio of 0.84 and a 11.40% return on equity. Cash flow performance is robust, with a 7.54% growth in free cash flow and a strong operating cash flow to net income ratio of 5.03.

Income Statement

Cafe de Coral Holdings Ltd. demonstrates strong recovery and growth in revenue, with a notable increase of 8.31% from the previous year. The company also showcases substantial improvement in profitability metrics, including a significant rise in both EBIT and EBITDA margins. The net profit margin has improved considerably to 3.80%, indicating enhanced operational efficiency and profitability.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.84, which indicates moderate leverage. The company's return on equity has improved to 11.40%, showcasing effective utilization of shareholders' funds. However, the equity ratio of 44.52% suggests some room for strengthening equity relative to total assets.

Cash Flow

Cafe de Coral Holdings Ltd. exhibits strong cash flow performance, with a remarkable free cash flow growth rate of 7.54% year-over-year. The operating cash flow to net income ratio of 5.03 indicates robust cash generation from operating activities. This strong cash flow supports the company’s ability to fund operations and growth initiatives.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
8.69B	8.02B	7.51B	6.71B	7.96B
	Gross Profit
971.56M	681.78M	524.86M	350.40M	704.26M
	EBIT
461.65M	208.03M	89.75M	-85.45M	249.75M
	EBITDA
1.70B	1.42B	1.25B	1.58B	1.46B
	Net Income Common Stockholders
330.45M	110.35M	21.21M	359.13M	73.63M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.26B	1.67B	1.59B	2.09B	346.71M
	Total Assets
6.51B	7.18B	6.87B	7.15B	6.22B
	Total Debt
2.45B	3.25B	3.10B	3.23B	2.60B
	Net Debt
1.19B	1.58B	1.52B	1.16B	2.25B
	Total Liabilities
3.60B	4.38B	4.05B	4.12B	3.55B
	Stockholders Equity
2.90B	2.78B	2.82B	3.03B	2.67B
Cash Flow		Free Cash Flow
1.35B	1.25B	675.69M	1.42B	943.05M
	Operating Cash Flow
1.66B	1.71B	1.17B	1.70B	1.45B
	Investing Cash Flow
-263.01M	-452.32M	-469.81M	-284.87M	-463.36M
	Financing Cash Flow
-1.80B	-1.16B	-1.20B	294.07M	-1.46B

Cafe de Coral Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.16
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0341, the sentiment is Negative. The current price of 7.16 is below the 20-day moving average (MA) of 7.19, below the 50-day MA of 7.36, and below the 200-day MA of 7.61, indicating a bearish trend. The MACD of -0.07 indicates Negative momentum. The RSI at 45.12 is Neutral, neither overbought nor oversold. The STOCH value of 50.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0341.

Cafe de Coral Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0151	79 Outperform	$60.79B	13.63	27.44%	4.99%	-3.11%	15.29%
0992	70 Outperform	$114.87B	9.45	27.60%	4.23%	18.03%	71.00%
0341	69 Neutral	HK$4.12B	15.16	9.84%	7.94%	2.29%	35.94%
1448	66 Neutral	$8.16B	20.44	6.48%	2.82%	-22.77%	-53.94%
Sector *	61 Neutral	$6.58B	11.81	3.06%	3.99%	2.54%	-21.54%
0683	52 Neutral	HK$27.11B	33.55	0.76%	7.11%	50.11%	-75.09%
0522	49 Neutral	$22.16B	64.09	2.23%	1.29%	-9.99%	-51.96%

Cafe de Coral Holdings Ltd. Corporate Events

Café de Coral Issues Profit Warning Amid Market Challenges

Café de Coral Holdings Limited has issued a profit warning, anticipating a decline of up to 30% in profits for the year ending March 2025 compared to the previous year. The downturn is attributed to a weak economy and consumer sentiment in Hong Kong and Mainland China, alongside increased competition and outbound spending by Hong Kong citizens. Despite these challenges, the company is enhancing its operations through digitalization, menu adjustments, and loyalty strategies, while maintaining a steady expansion in Mainland China. The company is adapting to a new market norm by optimizing its network and exploring new opportunities to sustain its business.

Café de Coral Announces Change in Company Secretary

Café de Coral Holdings Limited has announced a change in its company secretary and authorized representative, with Ms. Vera Leung resigning from her position effective April 1, 2025, and Ms. Lee Hung taking over the role. The company expressed gratitude to Ms. Leung for her contributions, and the transition is expected to be smooth with no disagreements reported, ensuring continued stability in its corporate governance.