Our reporter Xu Jie
Trainee reporter Wang Jun He Wang Juan
On February 21, the news that Haidilao would lose up to 4.5 billion yuan in 2021 attracted attention.
The company's profit warning stated that the net profit loss in 2021 will be about 3.8 billion to 4.5 billion yuan; operating income is expected to exceed 40 billion yuan, an increase of more than 40%.
As soon as the news came out, the catering sector of Hong Kong stocks fell sharply on February 21.
Among them, the share price of Haidilao fell 6.04%, Jiu Mao Jiu fell 4.26%, Fast Food Empire fell 3.53%, and Xiabuxiabu fell 2.85%.
As for the reasons for the loss of performance in 2021, Haidilao attributed to the impact of the rapid expansion of the store network in 2020 and 2021 and the company's internal management problems on the operating conditions.
rapid expansion
Half a year or a loss of three years of net profit
On the morning of February 21, the profit warning issued by Haidilao showed that it is expected to lose 3.8 billion to 4.5 billion yuan in 2021, and in the first half of 2021, Haidilao also achieved a net profit of 94.53 million yuan.
This means that Haidilao lost its net profit in the past three years since its listing within half a year.
Data show that Haidilao has achieved net profits of 1.646 billion yuan, 2.345 billion yuan and 309 million yuan respectively from 2018 to 2020, totaling about 4.3 billion yuan.
Compared with the continuous decline in net profit, Haidilao's revenue has been rising step by step. It is expected that the annual revenue in 2021 will reach 40 billion yuan, a year-on-year increase of more than 40%.
Such performance may be related to the rapid expansion of Haidilao’s previous stores.
China food industry analyst Zhu Danpeng said in an interview with the "Securities Daily" reporter that Haidilao relies on expansion to cure the symptoms but not the root cause. In the short term, store expansion will help increase revenue, but rapid expansion will increase overall management costs and operations. risk.
According to the data, as of the end of June 2021, the total number of Haidilao stores worldwide was 1,597.
Benefiting from the benefits brought by the expansion of stores, Haidilao's revenue increased by 56.5% in 2019. At that time, Haidilao set a rapid expansion target and did not change its expansion trend under the epidemic. From 2020 to the first half of 2021, Haidilao Laos opened 544 and 299 new stores respectively, and expanded 843 stores against the trend.
Various costs are also increasing under the expansion. According to Haidilao's semi-annual report data, in the first half of 2021, the cost of Haidilao's raw materials and consumables reached 8.502 billion yuan, a year-on-year increase of 95.5%, and the cost of employees reached 7.161 billion yuan, a year-on-year increase. 75.8%.
Property rental and related expenses amounted to 198 million yuan, a year-on-year increase of 125.2%.
In addition, business expansion has resulted in its gearing ratio reaching 75.4% in the first half of 2021, approximately double the year-on-year increase in the first half of 2020.
After the crazy expansion, Haidilao finally pressed the "pause button". On November 5, 2021, Haidilao announced that it would urgently close about 300 stores that did not meet expectations before December 31.
In addition, Haidilao has also launched the "Woodpecker" plan to continue to pay attention to stores with poor operating performance and take corresponding improvement measures; rebuild and strengthen some of the group's functional departments, restore the regional management system, and timely shrink the group's business expansion plan.
Factors such as the closure of more than 300 restaurants and the decline in restaurant operating performance have resulted in a one-time loss and impairment loss of Haidilao's disposal of long-term assets totaling about 3.3 billion to 3.9 billion yuan.
"Although Haidilao has begun to cut off its arms to stop bleeding, and the overall loss of nearly 300 stores has narrowed, but under the epidemic, the huge store scale may continue to drag on Haidilao's overall performance in 2022." Zhu Danpeng said "The current Haidilao has lost its differentiated competitive advantage and has become a mediocre mass brand. The overall brand effect is not enough to support the scale effect brought by its expansion. Therefore, it is expected that Haidilao will still face losses in 2022. "
In the past year, the market value has evaporated by more than 360 billion Hong Kong dollars
Can Haidilao turn the tide?
From the perspective of the development of the catering industry, according to the "2021 China Catering Market Analysis and 2022 Market Prospect Forecast" released by the China Cuisine Association, in 2021, the national catering revenue will be 4,689.5 billion yuan, which will increase from negative to positive compared with the previous year. 18.6%, a two-year average decrease of 0.5%, and has not recovered to the level of 2019 before the epidemic.
In view of the repeated outbreaks of the epidemic, the catering industry has continuously adjusted its development strategy and adopted measures such as closing some stores to deal with the current difficulties.
Xiabuxiabu, which is also a hotpot leader, will also close loss-making stores in 2021, and implement strategies such as takeaway, Xiazhu Xiatang, and tea as new growth points.
In recent years, more and more hot pot companies have emerged to seize the market, and the hot pot industry has become a "golden track".
The "Securities Daily" reporter found that in January this year, the Chongqing hotpot direct brand Peijie announced the completion of the A round of financing of 100 million yuan.
Since last year, several hot pot restaurant chain brands such as Brother Zhou and Banu have received financing one after another, and the amount of financing is in the hundreds of millions of yuan.
Among them, in 2021, it is reported that Banu Maodu Hot Pot will complete a new round of financing of over 500 million yuan.
In this regard, Du Zhongbing, founder of Banu, revealed at the 20th anniversary media exchange event that he is still in contact with the capital and has not completed financing.
"Banu will follow its own store expansion rhythm, and within three years, Banu will still focus on first- and second-tier cities."
Zhang Yi, founder of iiMedia Research, told the "Securities Daily" reporter that with the blessing of capital, the hot pot industry has a strong track performance, and the competition among various brands continues to intensify.
"Hotpot has become one of the most competitive tracks. More and more people are hitting the track, but at the same time, more and more people are falling."
"At present, the theme of Haidilao should be to adjust, remove redundant stores, and maximize the efficiency of each store, but to restore the market value of 470 billion Hong Kong dollars, in the short term, beyond the basic logic support." Qian Zhai Food The CEO and vice president of “F&B Boss Internal Reference”, Mu Yang, told Securities Daily that in the near future, it would be good for Haidilao’s market value to return to the initial stage after adjusting its strategy.
"Of course, the premise is that the adjustment is successful."
After the announcement of the profit warning, as of the close on February 21, the share price of Haidilao fell 6.04% to close at HK$18.98 per share.
Compared with last year’s Haidilao’s share price breaking through the historical high of HK$85.75 per share, the total market value was once close to HK$470 billion.
However, in the past year, Haidilao’s share price has fallen by more than 75%, and its market value has evaporated by more than 360 billion Hong Kong dollars.
As a leading hot pot company, although it is facing the dilemma of closing stores and shrinking, can the rectification of the strong man's broken wrist bring Haidilao back to its peak?
It remains to be seen.
(Securities Daily)