China Restaurants: Sep update: Catering demand remained unexciting with continued divergence; FMD was resilient against high base

Sep restaurant performance was broadly stable, though generally unexciting considering the favorable holiday calendar shift, while National Day holiday trends remained divergent against muted demand and anti-graft impact. By brand, we expect KFC/Pizza Hut SSSG at -1%/-1% yoy in 3Q26E (vs. 2Q26 of +1%/+1%). Haidilao's Sep average table turn was largely flat yoy at 3.3x-3.4x, implying a low-70% recovery vs. 2019, though National Day saw over 90% recovery on an apples-to-apples basis. For freshly made drink (FMD) companies, performance remained relatively resilient despite tough comp. Guming was stable in Sep and National Day was broadly in line with management expectations; Chagee's Sep average GMV remained positive yoy, putting 3Q26 China SSSG on track with GSe of flat yoy, but declined slightly during National Day. On promotion, FMD discount levels were broadly stable, while Pizza Hut stepped up promotional activity. Guming's investor day on Oct 14 could be the next catalyst.