Bank of America Securities has issued a research note lowering its price target for HAIDILAO (06862) from HK$13 to HK$12.3, while trimming its earnings per share forecasts for 2026 and 2027 by 4%. The firm maintains a "neutral" rating on the stock.

The brokerage notes that the company's first-half results largely met expectations, with revenue climbing 8% year-on-year. Restaurant revenue, however, declined 4% year-on-year, and same-store sales slipped 1.3%, while net profit remained broadly flat. The interim dividend payout ratio stood at approximately 100%, exceeding the 95% recorded in the same period last year and the 82% seen in the second half of the prior year.

Bank of America also highlights that July table turnover rates were roughly flat year-on-year but showed improvement on a month-over-month basis, with stability expected to persist into the second half. Nevertheless, the firm cautions that rising contributions from franchising, delivery services, and sub-brands could exert pressure on second-half profit margins.

The bank projects continued net margin contraction in the latter half of the year, albeit at a slower pace than the first half, with net profit anticipated to achieve low single-digit growth.