Haidilao has been going down since it broke the high of HK $85.779 in mid February. In four months, its stock price has gone down. Its market value has evaporated more than 240 billion and dropped to less than 200 billion. Starting from the end of June, the stock price showed a slight upward trend, and fell back on July 8 after a week of fluctuation. On July 9 and 12, the share price rose sharply, with a cumulative increase of nearly 20%. At present, the quoted price is HK $48, and the market value is back above 250 billion.
Profits plummeted, turnover rate plummeted
From 2018 to 2020, the revenue increased from 16.969 billion yuan to 28.614 billion yuan, but the profit in these three years was 1.65 billion yuan, 2.35 billion yuan and 310 million yuan respectively, and the profit in 2020 decreased by more than 86% compared with that in 2019.
In 2020, the most proud turnover rate of Haidilao will drop to 3.5 times / day.
We can see that from 2019 to 2020, whether in the first, second and third tier cities or outside the mainland, the turnover rate has decreased significantly.
According to the data, the turnover rate of 3 times / day is the breakeven line of Haidilao. If it falls below 3, Haidilao will be in a state of low profit or loss. According to recent news reports, the turnover rate of restaurants in April was less than 3 times per day, which means that they have fallen again and have been hovering on the edge of the cliff.
Bumps and bumps
According to the 2020 annual report, the per capita consumption of Haidilao increased from 105.2 yuan in 2019 to 110.1 yuan in 2020, with an increase of 4.9 yuan.
The price list of the restaurant more directly shows the fact that the price has increased.
During the epidemic period, the cost of raw materials rose and the price was passed on to consumers. But on the one hand, the attraction to customers has naturally declined, thus reducing the turnover rate and forming a vicious circle; On the other hand, in the competition with competitors in the same industry, the advantage is constantly decreasing, and it is difficult for C to stand firm. At present, the hot pot market has gradually become the Red Sea. Various kinds of hot pot categories and brands, such as Banu, Gulu Gulu, Chaoshan beef hot pot, old Beijing copper hot pot, Coconut Chicken, emerge as the times require, impacting the status of Haidilao.
In addition, the rapid opening of the store has led to a sharp rise in staff costs and water and electricity expenses, which is also one of the important factors in the decline of profits of Haidilao.
In 2020, a total of 544 new Haidilao restaurants will be opened. The global store network of Haidilao will increase from 768 on December 31, 2019 to 1298 on December 31, 2020, with an average of 1.5 stores per day. The turnover rate of new stores was only 2.8.
Staff costs have increased by 21.1% over 2019, and as a percentage of revenue, they have increased from 30.1% in 2019 to 33.8% in 2020. Fortunately, the rent will be reduced during the epidemic period, otherwise the situation may be even worse.
In the deep red sea, it’s not easy to find a shortcut to profit.
Benefit from the consumer sector?
Due to the rising vaccination rates in the mainland and Hong Kong, the restriction on polymerization in Hong Kong is expected to be gradually relaxed, and catering enterprises in both places will usher in a gradual recovery and bottom rebound.
The e-coupons distributed by the Hong Kong government will be issued one after another from August 1, which will also enhance the consumption capacity of the public and benefit the catering sector.
Leading catering enterprises such as Haidilao and other large catering chain organizations may benefit from different customer groups, performance improvement, executive power and nibbling effect, showing different recovery posture.
Reprint indicated source：Spark Global Limited information