2025-06-10-Jefferies-DPC_Dash（1405）_股东DPZ将其持股比例降至3_7页_108kb

DPC Dash Ltd (1405 HK) Equity Research Summary

Key Event

Domino's Pizza (DPZ) sold approximately 4.2 million shares of DPC Dash through a block trade at HK$83 to HK$87 per share (a 1-5.6% discount), reducing its stake from ~6.21% to ~3% of total shares.

Rationale

The sale aims to enhance liquidity for DPC Dash shares, as trading volumes have been low (avg daily vol ~342k shares over three months). This supports broadening the shareholder base without affecting the master franchisee agreement with DPZ.

DPC Dash Performance

• Operations remain on track: Opened 97 new stores in 1Q25, reaching 1,105 stores, meeting annual new-store targets.
• 1Q25 recorded a positive same-store sales growth (SSSG), indicating strong performance.
• The company is the exclusive master franchisee of Domino's Pizza in China, HK SAR, and Macau SAR, with a 10-year agreement.

Analyst Views

• Jefferies assigns a "Buy" rating with a HK$130 price target, up from ~HK$125, reflecting management's strong bond and growth prospects.
• Key positives: Providing liquidity, stable operations, and potential for continued expansion.

Valuation and Risks

• Valuation: Primary method is DCF with WACC of 9.5%, terminal growth rate of 2.0%, supporting the HK$130 PT.
• Risks: Weak consumer sentiment, intensified competition, slower store growth, SSSG underperformance, and food safety issues for DPC Dash.
• Broader risks: China consumer stocks face 0-3% TGR, with global QSR competition and wage pressures for Domino's Pizza.

Recommendations

• Holders: Lisa Liao and Anne Ling maintain Buy stance based on positive growth drivers.
• Investment outlook: Favorable for liquidity and partnership, but monitor risks like market competition.

Disclaimer

This summary is based on Jefferies' report dated June 10, 2025. Actual investments carry risk; consult your financial advisor.