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Haidilao "no longer smells good"? The market capitalization plummeted by nearly 250 billion.
Undersea fishing fell endlessly, today's stock price once fell more than 6%, from the high point tired fell 57%, the market value was halved, intraday fell below the 200 billion market value mark.
Analysts said Haidilao is currently facing a "double kill" situation of high valuations and less-than-expected performance recovery.
Lost nearly HK $250 billion in four months
On June 15, Haidilao's share price continued to decline, falling more than 6% at one point in intraday trading, falling as low as HK $37.05, a new low, while the total market capitalization fell below HK $200 billion, with an intraday low of HK $196.4 billion.
By the close, Haidilao's decline had shrunk, falling 1.63 per cent to HK $39.15 per share, with a total market capitalization of HK $207.5 billion.
On February 15 this year, the share price of Haidilao rose to 85.80 Hong Kong dollars, and the total market capitalization once exceeded 450 billion Hong Kong dollars to 4547.4 Hong Kong dollars, just four months after today.
Compared with the all-time high in February this year, Haidilao's closing price today has fallen by 54.3%, while the market capitalization has lost more than HK $247.2 billion.
Meanwhile, Yihai International, a supplier of hot pot ingredients in Haidilao, fell 2 per cent and its share price is now at its lowest level since April last year and 64 per cent below its all-time high of HK $147.89 at the end of January.
Behind the collapse of Haidilao, domestic capital has retreated frequently, and since June, domestic capital has continued to reduce its holdings by more than 10 million shares.
It has skyrocketed by 250% in more than two years.
Haidilao, as the leader of catering stocks and the star listed company in hot pot industry, has created the myth of catering industry since it officially landed in Hong Kong's capital market on September 26, 2018.
Reflected in the performance of the secondary market, the share price of the star company, previously known as the "number one catering brother" in the Hong Kong stock market, has made a huge leap since it was listed in 2018.
Haidilao hit a low of HK $15.274 on October 29, 2018 and has since climbed step by step, rising from HK $17.16 at the start of trading in 2019 to an all-time high of Rmb85.8on February 16 this year, up as much as 257.58 per cent.
But this year it has experienced the ups and downs of jump and diving, February 17 is the watershed, since then, Haidilao has been all the way down.
Net profit plummeted by nearly 90%
Behind the decline in share prices, Haidilao's performance growth is weak.
According to the company's financial report, Haidilao's revenue in 2020 was 28.6 billion yuan, an increase of 7.8 percent over 2019, and its annual net profit was 300 million yuan, down 86.8 percent from 2019.
In terms of business, Haidilao's restaurant revenue in 2020 was 27.434 billion yuan, accounting for 95.9% of the total revenue, an increase of 7.2% over the same period last year. Although the takeout business increased greatly, reaching 60%, it accounted for a relatively low percentage, with annual revenue of 720 million yuan and revenue accounting for 2.5%, up from 1.7% last year.
In view of this, Haidilao's annual revenue growth is mainly driven by the expansion of the restaurant business.
By the end of 2020, the number of Haidilao restaurants was 1298, an increase of 530 compared with 768 in the same period last year. Of these, 1205 are located in Chinese mainland and 93 in 14 countries and regions outside Chinese mainland.
The expansion of Haidilao stores has accelerated since 2016. At the same time, its full-year performance growth is also on the fast track. Haidilao's annual revenue growth was close to 60% in 2018 and 2019. In 2020, Haidilao opened 544 new stores, continuing to set a new high in recent years.
However, even though Haidilao has accelerated its expansion in recent years, its net profit margin has declined year by year. The net profit rate of Haidilao sales was 12.5% in 2016, dropped to 8.8% in 2019, and was as low as 1% by 2020.
In 2020, the cost of raw materials and consumables in Haidilao rose 9 per cent year-on-year to 12.261 billion yuan, while staff costs rose 21 per cent year-on-year to 9.676 billion yuan.
The increase in costs is mainly due to business expansion and increased consumption of sterilization materials used in anti-epidemic. In order to cope with the rise in costs, in addition to replacing self-service ingredients, Haidilao also raised the prices of some dishes by 6% in April 2020, but apologized and adjusted the prices back to the original level after causing a heated debate in public opinion.
The average rate of turning over the stage is decreasing.
For the company's full-year net profit loss, Haidilao attributed it to the impact of the epidemic.
In the first half of 2020, Haidilao made a net loss of 965 million yuan. In other words, Haidilao's annual profit is mainly earned in the second half of the year.
The outbreak of the epidemic in 2020 led to the closure of offline restaurants and a decline in passenger flow across the country for a period of time. According to the National Bureau of Statistics, national catering revenue fell by 16.6% in 2020 compared with the same period last year.
This is also the main reason for undersea fishing's performance loss in the first half of last year.
The turnaround rate has always been the proud capital of Haidilao, which is much higher than that of its competitors in 2020. The average turnaround rate of Haidilao has dropped from 4.8 times per day in 2019 to 3.5 times per day.
On January 26 last year, Haidilao announced the suspension of all stores in mainland China, and it was not until March 12 that the first batch of 85 stores resumed offline business. In the second half of the year, as the epidemic was gradually brought under control and the operation of the catering industry picked up, Haidilao accelerated the pace of opening stores, so the performance turned from deficit to profit in the second half of the year
Beset with food safety problems
At the same time of poor performance, Haidilao has also been exposed food safety problems one after another.
On July 12, 2020, some consumers reported eating hard plastic sheets in black chicken rolls while eating at a Haidilao restaurant in Jinan, Shandong Province. Haidilao issued an apology on its official Weibo account on the evening of July 20.
On July 30, 2020, Haidilao hot pot Hangzhou Fuchun Xintiandi store was on the "spot check black list" of the Hangzhou Municipal Supervision Bureau. The store was named because a batch of chopsticks used in the store were detected with coliform bacteria.
In addition, problems such as expired food, substandard storage and substandard kitchen hygiene in the warehouse also occur from time to time, and more than a dozen stores have been asked to rectify due to various food safety problems.
A number of institutions are optimistic that Haidilao still has an increase of 30-60%.
Credit Suisse said in a report that the shares of Haidilao, Jiumaojiu and Jiaofu have fallen 54%, 28% and 68% since their highs in February, mainly because of market concerns about the slow recovery of the turnaround rate.
Credit Suisse also added that it agreed that the unstable pace of recovery in the industry had had an impact on the results of hotpot stocks in the first half of this year, but believed that the market had overreacted and expected human flow to return to normal in the second half of the year.
Guoyuan SecuritiesIt is believed that Haidilao's main hot pot itself has a strong social attribute, the recovery of passenger flow is relatively slow, and a large number of new stores are opened, which also leads to the recovery and overturning performance is weaker than that of peers.
In terms of new stores, 150-200 new stores were opened in Haidilao in the first quarter of 2021. By the end of March, 91 new stores had been signed, and more than 500 stores had been signed but not opened.
Haidilao Reserve has plenty of stores and is expected to continue to expand rapidly in 2021, so it is given a target price of HK $63, which is about 30% higher than the current price.
Guoxin SecuritiesIt is believed that the recovery trend of the catering industry in the second half of 2021 is clear, and Haidilao's counter-trend expansion is expected to establish a higher performance growth rate this year in the future. Compared with the practice of 99 cents in the same industry and the practice of sipping and sipping, Haidilao has obviously gained more.
Guoxin Securities expects Haidilao's income to grow by 55.3%, 36.3% and 29% respectively from 2021 to 2023, and its home net profit will grow by 1440%, 41.9% and 28.4% respectively, giving it a target price of HK $76.8, which is about 60% higher than the current price.