Huaxing Securities issued a research report maintaining a "Hold" rating on XIABUXIABU (00520) with a target price of HK$1.00, implying a 0.2x 2026 P/S multiple. The firm forecasts the company's revenue to decline 15.0% YoY in 2025, then grow 3.0% and 2.0% in 2026-27 to RMB4.04bn, RMB4.16bn, and RMB4.25bn respectively. Net losses attributable to shareholders are projected at RMB145mn in 2025 and RMB66mn in 2026, turning to a net profit of ~RMB2.4mn in 2027.

XIABUXIABU's store count peaked at 1,061 in 2020 before contracting to a trough of 760 in 2024. As of 1H25, the brand saw a slight net increase to 763 stores. The report suggests that if store numbers stabilize or continue growing from current levels, it may signal the completion of operational adjustments, warranting closer monitoring of the brand's recovery.

For its subsidiary brand Coucou, store numbers peaked at 257 in 2023 before declining to 197 in 2024 and further to 174 in 1H25. Huaxing believes Coucou's store contraction hasn't bottomed yet. Historically, when fundamentals stabilize post-trough, the probability of marginal improvement significantly outweighs further deterioration risks. The firm recommends ongoing tracking of the company's turnaround potential, particularly when Coucou's store count begins rebounding.