FY2020 results were in line with previous profit warning. Café de Coral'srevenue declined by 6.2% YoY to HK$7,963 million in FY2020, mainly due toweak performance in 4QFY2020 brought by the COVID-19 outbreak. In2HFY20, Café de Coral's revenue dropped 13.9% YoY. The Company's grossmargin fell 5.3 ppt YoY to 9.2% in FY2020 and fell 9.2 ppt YoY to 6.3% in2HFY20. The Company's shareholders' profit decreased 87.1% YoY toHK$74 million in FY2020 and recorded net loss of HK$76 million in 2HFY20.
　　The Hong Kong government backed the Company get through the toughtime. As the pandemic has been effectively controlled in Hong Kong andmainland China, Café de Coral's same-store sales considerably recoveredsince May. Hong Kong's social-distancing measures have been further eased.
　　Café de Coral can receive one-off subsidies of HK$80 million each monthfrom the Hong Kong government since June, which is expected to greatly helpthe Company stabilize its operations and financial position.
　　Though pandemic prevention measures may become the norm, theCompany's profit breakeven line for each restaurant will continue to go downdue to lower operating expenses. Café de Coral obtained additional bank loanfacilities of approximately HK$1,180 million, which had not only helped theCompany get through the tough time but also provides enough funds forfuture expansion. Due to healthy financial position, loyal customer base andstrong bargaining power with landlords, we expect that Café de Coral willoutperform its peers in Hong Kong. Therefore, we maintain "Accumulate"and raise TP to HK$19.20, which represents 17.5x FY2021 PER, 18.2xFY2022 PER and 17.4 x FY2023 PER.