[NTD News October 07, 2021, Beijing time]The mainland hot pot giant Haidilao’s share price has continued to fall since reaching its peak in February this year. So far, its total market value has fallen below 150 billion (the same below the Hong Kong dollar), which has shrunk by more than 310 billion.
At 10 am on October 7, Haidilao’s stock price was 26.2 Hong Kong dollars per share, with a total market value of 143.026 billion. At 4 pm on October 6, the stock price was as low as 26.05 Hong Kong dollars per share, and the day closed at 26.1 Hong Kong dollars per share.
On February 15 this year, Haidilao’s share price once soared to 85.8 Hong Kong dollars, and its total market value exceeded 450 billion, reaching 454.74 billion. Today, its total market value has fallen below 150 billion, and its market value has evaporated by more than 310 billion, shrinking by 311.714 billion (October) 10 am on the 7th).
It is reported that in the “2021 Hurun Global Rich List” released by the Hurun Research Institute on March 2 this year, Haidilao founder Zhang Yong and his wife have surged 138% in wealth in the past year, and their wealth has jumped to the 38th place in the world. The ranking surpasses Li Ka-shing, Xu Jiayin, Liu Qiangdong and his wife.
“Red Star News” said on October 6, that Zhang Yong and his wife have lost their throne as the richest man in Singapore.
Haidilao expands its stores during the epidemic, and the turnover rate drops
The report analyzed that Haidilao’s stock price plummeted due to at least three reasons.
First of all, Haidilao continued to expand stores during the epidemic last year, and its turnover rate dropped rapidly.
According to the report, Haidilao will add 544 new stores in 2020, an average of 1.5 new stores per day, a record high, and the total number of stores worldwide reached 1,298 by the end of the year; but by 2021, the number of stores is still growing. As of the first half of 2021, The number of Haidilao stores rose to 1,597.
In June 2021, Haidilao founder Zhang Yong said at the shareholders meeting that he had misjudged the trend. In June last year, he believed that the epidemic would end in September, so he made a store expansion plan in June last year, but ” Now it is indeed blind and self-confident.”
While blindly expanding stores, Haidilao’s turnover rate has dropped rapidly, and the diversion effect of new stores will also reduce the turnover rate of existing stores.
Zhang Yong also believes that the continuation and repetition of the epidemic is also one of the main reasons for the sharp drop in the Taiwan turnover rate. In June of this year, Guangzhou was hit by the Delta variant of the CCP virus, and Haidilao’s Taiwan turnover rate dropped directly from 3.1. To 1.2.
The mainland Guosen Securities estimates that if the Haidilao turnover rate drops below 3 times per day, it means that the Haidilao single store is in a state of loss or meager profit.
Haidilao’s financial report showed that the net profit margin for sales in the first half of 2021 was 0.48%.
Haidilao prices increase during the epidemic
According to the report, Haidilao used price increases to increase the restaurant’s revenue. Netizens called “too expensive to afford”.
Soon, on April 10, 2020, Haidilao officially issued a letter of apology, stating that the price increase was the wrong decision of the management, and that from that day onwards, all store prices returned to the standard before the store closed on January 26, 2020.
However, at the end of 2020, Haidilao was reported to have “secretly increased prices”. Not only did the prices of some dishes rise, but also beverages and self-selected condiments.
According to the company’s financial report, Haidilao’s per capita consumption in 2020 increased by 4.8% year-on-year, compared with a year-on-year growth of 4% in 2019 and 3.1% in 2018. This data shows that Haidilao is indeed increasing its prices year by year, especially in the case of the 2020 epidemic, where the price increase is relatively high.
In the first half of this year, its average customer unit price “cannot go up”. In the first half of the year, the price was 107 yuan, compared with 112 yuan in the same period last year.
Haidilao’s sideline business has limited revenue
In addition, the report believes that Haidilao’s expanded sideline business brings very limited actual revenue.
According to the company’s financial report, as of the first half of 2021, Haidilao’s other restaurants accounted for only 0.5% of total revenue.
The founder Zhang Yong expressed his views on the sideline not long ago: “My heart is not dead yet, I still want to toss.”
(Reported by reporter Li Jinfeng/Editor in charge: Li Quan)
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