Hot pot brother performance reversal

As a hot pot leader, Haidilao (06862. HK) has dropped its market value by about HK $200 billion from its peak in February. Now it will usher in a “reversal”.

Year on year turnaround, but still less than expected

The latest performance forecast disclosed on July 25 shows that from January to June this year, Haidilao’s revenue will double to about 20 billion yuan, and its net profit will reach 80 million yuan to 100 million yuan. Compared with the same period last year, the company’s net loss will be about 965 million yuan.

Haidilao pointed out that compared with the first half of 2020, the company turned from loss to profit in the first half of 2021, but the performance did not meet the expectations of the company’s management, which reflected that the company’s internal management and operation needed to be corrected and improved.

In the first half of 2020, under the influence of COVID-19, the net loss of seabed was RMB 965 million yuan. Compared with the same period of last year, Haidilao turned losses into profits, but in the same period of 2019, Haidilao realized a net profit of 912 million yuan. From this point of view, there is still a big gap between the bottom fishing and the return to the profit level before the epidemic.

In this regard, Haidilao explained that the company has opened more stores in the past year, and the relevant expenses have increased, but the time for the newly opened stores to reach the first break even and realize the return on cash investment is longer than in the past. In addition, the operation of overseas stores is still affected by New Coronavirus epidemic in different countries and regions.

In June 15th of this year, Zhang Yong, founder of seabed fishing, was honest about the trend of COVID-19. In June 2020, I further made a plan to expand the store. Now it is really blind faith. When I realized the problem, it was January this year. When I responded, it was March. ” Zhang Yong said.

In March, when the announcement of 2020 results announcement was released, seabed also said that since the second quarter of 2020, with the gradual improvement of the Chinese mainland epidemic situation, the recovery trend of the catering industry in the second half of the year is clear, so the company has accelerated the opening of its stores.

According to reports, new stores opened in the second half of last year and the first half of this year, and related expenses increased. During the period, the opening of new stores reached the first break even and the cash investment return time was longer than in the past, and the operation of overseas stores was still affected by New Coronavirus epidemic in different countries and regions.

In addition, the company is implementing active measures to control rent and other operating costs, strictly manage working capital and use credit financing means to ensure stable cash flow and good cash position.

In 2020, Haidilao achieved a revenue of 28.6 billion yuan, a year-on-year increase of 7.8%; The net profit was 309 million yuan, a year-on-year decrease of 86.8% in 2019, which was regarded as a thunderstorm; The company’s share price fell by more than half from its peak of HK $455.8 billion in February to its lowest point in May, and then rebounded.

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