Before trading on February 21, Haidilao (06862. HK) released a performance forecast. For this hot pot giant, 2021 is indeed in trouble.
The announcement shows that the company is expected to achieve revenue of more than 40 billion yuan, an increase of more than 40% over 2020; the net loss is about 3.8 billion yuan to 4.5 billion yuan , while the profit in the same period in 2020 is 309 million yuan.
Affected by this bad news, Haidilao's share price began to decline after rising briefly at the opening of the market.
As of the close, the company's share price closed at HK $19.08 per share, down 5.54%.
The 21st Century Business Herald reporter noted that when the store closure plan was announced in early November last year, some analysts pointed out that large-scale store closure is expected to have a large one-time impairment. According to Southwest Securities Co.Ltd(600369) at that time, the impairment data is expected to exceed 1 billion yuan. However, combined with the performance forecast finally disclosed, it is obvious that the amount of net profit loss exceeded expectations.
For this large loss, Haidilao also said that it has been paying close attention to the market situation and adjusting its business strategy and operation to reduce the negative impact. The main measure is to rely on the "woodpecker plan" announced in November last year to reverse the decline.
loss exceeded expectations
Looking at the financial data released by Haidilao since 2015, in addition to the loss of net profit in the first half of 2020, the company suffered a full year loss for the first time.
In 2020, when the epidemic spread, Haidilao experienced a difficult time because its offline stores were suspended: in the first half of 2020, the company lost 965 million yuan. However, with the controlled epidemic, industry recovery and consumption recovery in the second half of the year, Haidilao will finally turn losses into profits in 2020.
however, the more difficult time comes in 2021.
When the revenue and net profit in the first half of the year achieved double growth year-on-year, Haidilao issued a voluntary announcement in early November last year, revealing the deep scars. In this announcement, the company said that will gradually close about 300 Haidilao stores with relatively low passenger flow and poor operating performance before December 31, 2021. in addition, in order to improve the business performance, Haidilao will launch the "woodpecker plan", and timely shrink the business expansion plan while continuing to pay attention to the stores with poor business performance.
in fact, the large-scale closure of stores will inevitably have an impact on the financial statements of Haidilao in 2021.
The performance forecast shows that the one-time loss and impairment loss on the disposal of long-term assets caused by the closure of more than 300 restaurants and the decline of restaurant operating performance last year amounted to about 3.3 billion yuan to 3.9 billion yuan, which constituted the biggest reason for the sharp loss of the company's net profit last year.
In view of the impact of withdrawal caused by store closure, some securities companies also made calculations at that time. For example, Southwest Securities Co.Ltd(600369) estimated impairment data exceeds 1 billion yuan; Soochow Securities Co.Ltd(601555) considered that the net profit attributable to the parent company of Haidilao in 2021 was reduced to -1.03 billion yuan due to the factors such as the recovery of the epidemic situation, large one-time costs caused by the closure of stores and the adjustment of subsequent store expansion plans.
In addition, the 21st Century Business Herald reporter noted that according to statistics, from November 8, 2011 to January 18, 2022, a total of 9 securities companies adjusted the predicted net profit of Haidilao in 2021. Among them, in addition to the two institutions maintaining profit forecasts, the remaining seven institutions have carried out loss calculation. However, the final loss data released by Haidilao exceeded the expectations of the above institutions.
Haidilao said that in addition to the one-time loss and impairment loss caused by the disposal of long-term assets due to the closure of stores, the impact of global continuous changes and repeated epidemics, the rapid expansion of store network in 2020 and 2021 and internal management problems on the operation of Haidilao restaurant.
"Especially in the second half of 2021, the restaurant operation was significantly affected by the global regional epidemic outbreak and public health control measures, resulting in a decline in the operating performance of Haidilao restaurant in the second half of 2021 compared with the same period in 2020, and the loss of overseas stores increased in 2021."
Fortunately, the operation of Chinese mainland restaurants is stable. The announcement shows that in 2021, Haidilao is expected to achieve a revenue of more than 40 billion yuan, a year-on-year increase of more than 40%.
" the loss of Haidilao is a non recurring profit and loss. Getting rid of the burden at one time is conducive to light loading. in addition, the recurrence of the epidemic last year has brought business pressure, but from the second half of the year, its attendance should gradually pick up, and the performance will probably show a strong performance this year." Shen Meng, executive director of Xiangsong capital, said to the 21st Century Business Herald reporter that.
lick the pain of expansion
As far as the industry environment is concerned, if the catering industry can return to the state before the epidemic, there is still a certain distance to go.
The report "analysis of China's catering market in 2021 and market prospect forecast in 2022" (hereinafter referred to as the "report") released by the China Cuisine Association shows that in 2021, the national catering revenue was 4689.5 billion yuan, an increase of 18.6% from negative to positive compared with the previous year, with an average decrease of 0.5% in two years, which has not yet returned to the level of 2019 before the epidemic.
The report points out that in 2021, the catering industry is still in trouble from the perspective of operation, and many catering enterprises are in a state of loss, even large chain brand enterprises. In view of the repeated and frequent outbreaks of the epidemic, the catering industry has constantly adjusted its development strategy and adopted measures such as closing down some stores to deal with the current dilemma.
In December last year, with the implementation of the "woodpecker plan", the closure of Haidilao in Beijing, Shanghai and other cities attracted attention.
In response, Haidilao officials responded to the 21st Century Business Herald reporter at that time:
"According to the previous announcement, some stores whose operation fails to meet expectations are planned to be adjusted before the end of this year (some of them will temporarily rest and reopen at the right time) 。 Through the implementation of the "woodpecker plan", we will concentrate resources to improve the operation of existing stores, including improving customer satisfaction, improving staff efforts, strengthening store manager management and store management, enriching product innovation and comprehensively optimizing customer experience. "
"woodpecker plan" is regarded by the outside world as a complete "correction" of the excessive expansion of Haidilao in the past few years.
The change of platform turnover rate data warns that submarine fishing has to slow down. Financial data show that in the first half of 2021, the overall turnover rate of Haidilao is 3.0 times / day, slightly lower than that in the same period last year; The turnover rate of the same store was 3.4 times / day, the same as that of the same period last year. Among them, the overall turnover rate recovered poorly, because the proportion of new stores was relatively large and the climbing period of new stores was prolonged under the influence of the epidemic.
the pain of "licking" expansion of Haidilao is the epitome of the overall dilemma encountered by China's catering industry in the post epidemic era.
First, the difficulties of the industry, the far-reaching impact of the epidemic in China, and the catering industry is subject to periodic impact and continuous suppression on the demand side;
Second, due to the difficulty of categories, hot pot entered the second half, new players emerged one after another, and the industry entered the stock competition;
Third, the difficulties of enterprises and the decline of turnover under rapid expansion have an impact on cash flow. Zhongtai Securities Co.Ltd(600918) summarizes three dilemmas.
in fact, the decline of Haidilao is also a warning of the current development of the catering industry. The report points out that the catering industry has increasingly recognized the importance and necessity of promoting high-quality development, realized deep-seated changes from quantity to quality, and explored new models for innovative development.
It is worth mentioning that the policy will continue to support the recovery of the catering industry.
On February 18, 14 departments including the national development and Reform Commission and the Ministry of Finance jointly issued several policies on promoting the recovery and development of difficult industries in the service industry. for the catering industry, the document puts forward seven relief and support measures, involving enterprise epidemic prevention subsidies, reducing the service fee of takeout platform, delaying the payment of insurance premium, broadening financing channels and so on, which has injected a "booster" into the future development of the catering industry.
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