For listed companies, catering may not really be a good business.
On February 21, Haidilao issued a profit warning, which showed that the company's net loss in 2021 was about 3.8 billion yuan to 4.5 billion yuan; revenue is expected to exceed 40 billion yuan, an increase of more than 40%.
Increasing revenue does not increase profits, which is the "answer sheet" that Haidilao gives to the market.
As for why this situation occurs, Haidilao's explanation is:
First, the rapid expansion of store networks in 2020 and 2021;
Second, the company's internal management issues.
According to the minimum standard of net loss, what is the concept of 3.8 billion? According to Haidilao's financial report, from 2018 to 2020, Haidilao's net profit margin was 1.646 billion yuan, 2.345 billion yuan and 309 million yuan, respectively, and the total net profit in the three years was 4.3 billion yuan. In the first half of 2021, Haidilao's net profit also reached 94.53 million yuan. That is to say, Haidilao lost its net profit for three years.
What is even more tragic is that the overturn rate of Haidilao is still declining, and it is still unknown when the future will be better.
In fact, in my opinion, there are two factors that have contributed to the situation in Haidilao today. The first is the factor of the epidemic; the second is the factor of rapid expansion.
The most serious problem of Haidilao is rapid expansion, which is the decisive factor leading to its huge losses. The current situation of Haidilao is somewhat similar to the clothing industry around 2012. Taking the Chinese version of Zara "La Chapelle" as an example, as the first "A + H" clothing listed company, it has come to the brink of delisting in just three years, what is the most fundamental reason? It's about expanding fast.
Statistics show that from 2012 to 2017, La Chapelle's stores expanded from 3340 to 9448. The result of the crazy store opening is that the company's revenue has increased significantly, but the net profit has not increased, and La Chapelle's revenue in 2018 exceeded 10 billion.
At that time, Xing Jiaxing, founder of La Chapelle, said: "Developing companies cannot stop, the domestic consumer market is more than 20% growth every year, if you do not open new stores, it means regression." ”
In the same sense, Daniel Zhang, chairman of Haidilao, also said.
Taking 2018 as a watershed, although La Chapelle's revenue hit a new high, its net profit showed a loss, which was also the turning point of its transition from prosperity to decline.
In fact, for listed companies, after listing, with the support of financing funds, do large-scale, increase profits, and then achieve the continuous increase in the performance of listed companies, which is originally a positive cycle of enterprises, but the industry has its natural ceiling, which is an insurmountable boundary.
In more than a year, Haidilao's stock price fell by more than 75% from its highest level, and its market value evaporated by more than HK$350 billion (about 284.2 billion yuan).
Last year, Daniel Zhang, chairman of Haidilao, finally understood this truth, so he began to make up his mind to deal with some problems and stopped the pace of expansion. On November 5, 2021, Haidilao announced that after reviewing the operating performance of its stores, the Group decided to adjust its store expansion planning decision and gradually close about 300 Haidilao stores with relatively low passenger flow and lower operating performance than expected by December 31, 2021. For Haidilao, closing the store is only the first step.
On the whole, the current loss problem of Haidilao is not a quarter or two can be reversed, according to the current situation, whether Haidilao will continue to expand the scale of store closures in the future is unknown. But fortunately Daniel Zhang discovered the problems in the expansion process of Haidilao in time and began to correct them in time.
However, the outcome is still unknown, and only by the middle of this year can we see how much impact the closure of the store can have.