Hotpot chain Haidilao, controlled by Singapore’s richest couple, sees turnaround as China’s economy rebounds

Haidilao ended 0.5 per cent weaker on Tuesday, after swinging between gains and losses on ‘profit warning’ before report card later this month

Stock surged 8.2 per cent on Monday on news it will become a Hang Seng Index constituent from March 15

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A Haidilao hotpot restaurant in Beijing, when it was closed in February 2020, on safety concerns following the outbreak of the new coronavirus. Photo: Reuters

Published: 1:07pm, 2 Mar 2021Updated: 5:00pm, 2 Mar 2021

Chinese hotpot restaurant chain Haidilao International surprised investors by saying it will deliver a profit in 2020, suggesting the business turned around in the second half as the mainland economy rebounded.

The group, controlled by two of Singapore’s richest tycoons, said it expects earnings to slide by 90 per cent in 2020 in a profit warning issued to the stock exchange in a filing late Monday. It cited the impact of Covid-19 pandemic for the decline in takings. It had a net profit of 2.347 billion yuan (US$362.9 million) in 2019.

The warning, however, suggests it returned to profitability in the second half. The business slumped in the first six months of the year, incurring a bigger-than-expected net loss of 964.6 million yuan to shareholders, according to a September filing. The latest 2020 report card would be released later this month, it said in the filing.

China’s economy rebounded last quarter, helping the group which had 92 per cent of its 935 outlets in 164 mainland cities. The slump in the first half of 2020 reflected measures by governments worldwide in restricting or banning dine-in operations to stem infection cases.

Haidilao fell 0.5 per cent to HK$68.50 in Hong Kong on Tuesday, after swinging between a 2.2 per cent gain and 3 per cent loss. The stock surged 8.2 per cent after a decision to add it to the benchmark Hang Seng Index from March 15.