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
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.
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.
The stock has gained more than 14 per cent this year, after handing investors a 91 per cent gain in 2020 and an 82 per cent rise in 2019. Chairman Zhang Yong and his spouse Shu Ping, who are co-founders, controlled 68.2 per cent of the group, based on the interim report published in September.
The spicy Sichuan hotpot chain group boosted its outlets to 935 from 768 outlets in mainland China and elsewhere during the first half of 2020.
Apart from the slowdown in customer patronage, Haidilao also expects to suffer a net foreign-currency loss of about 235 million yuan due to fluctuations in the yuan-US dollar exchange rate, according to its filing.
The group has monitored market conditions and adjusted its business strategies and operations to reduce the negative impact, Zhang said in the exchange filing. It also took measures to control rents and other operating costs, working capital and borrowings to ensure a healthy cash flow position, he added.
Additional reporting by Zhang Shidong