Cafe de Coral is literally the kitchen of HK. Revenue and profitability growth has collapsed so much into negative territory that mathematically speaking, the year-on-year comparable are going to be very favorable in 2021 and 2022. Rental and labor cost, the 2 biggest cost components are going to act as a tailwind for the company (LTM operating margins of 2.6% is probably closer to the trough compared to normalized margins of c.8%) and the company is maintaining market share by passing on cost savings to its customers.
With the stock trading at the bottom of a trading range with valuations of c.5x EV/EBITDA, -2 standard deviation levels (mean of 13x), I would say this stock is a steal.
With the stock trading at the bottom of a trading range with valuations of c.5x EV/EBITDA, -2 standard deviation levels (mean of 13x), I would say this stock is a steal.