: Maintains a "hold" rating for Xiabuxiabu (00520) with a target price of 1 Hong Kong dollar.

Huaxing Securities released a research report stating that it maintains a "hold" rating for XIABUXIABU (00520) with a target price of 1.00 Hong Kong dollars, corresponding to 0.2 times the 2026 P/S. The bank predicts that the company's revenue will increase by -15.0%/+3.0%/+2.0% to 40.4/41.6/42.5 billion yuan in 2025-27 respectively; and expects the company to incur a net loss of 1.45/0.66 hundred million yuan in 2025/26, and achieve a net profit of around 2.4 million yuan in 2027. XIABUXIABU's brand store count peaked at 1,061 in 2020 and then started to decline, hitting a low of 760 in 2024, with a net increase to 763 stores in the first half of 2025. The bank believes that if the number of Xiabu stores continues to increase or stabilize at the level in the first half of 2025, it indicates that a phase of adjustment has been completed, and it is worth paying attention to the future development of XIABUXIABU. As for the "CouCou" brand, the number of stores peaked at 257 in 2023, then began to decrease, and dropped to 197 stores in 2024, further shrinking to 174 stores in the first half of 2025. The bank believes that the number of CouCou brand stores has not yet bottomed out, and it is worth monitoring the brand's future development. When the CouCou brand hits bottom and starts to rise, it may also be a time of improvement in the company's fundamentals. Historically, after hitting bottom, the probability of future marginal improvement is much higher than the risk of continued decline, indicating potential investment opportunities for the company. The bank advises to continue to monitor the situation.