            Dot blue letter attention, do not get lost~
The epidemic has been repeated, and the catering industry has also suffered a huge blow. On the evening of the 5th, Haidilao, a "hot pot brother" listed in Hong Kong, suddenly announced the closure of 300 stores, and the news also quickly rushed to Weibo's hot search.
About 300 stores will be closed during the year, but no layoffs will be made
On November 5, Haidilao (hk.06862) issued an announcement that after reviewing the operating performance of its stores, the Group decided to adjust its store expansion planning decisions, and gradually closed about 300 Haidilao stores with relatively low passenger flow and less than expected operating performance by December 31, 2021, of which some stores will be temporarily closed and reopened at the opportunity, with a rest period of no more than two years. Haidilao also said that the company will not lay off employees and will properly settle the employees of such stores within the group.
In addition, in order to improve the Group's operating performance, the Board of Directors decided to launch the "Woodpecker Program" led by Yang Lijuan, Executive Director and Deputy Chief Executive Officer. The main contents of the plan include: continuous attention to stores with poor operating performance, including overseas stores, and take corresponding improvement measures; rebuild and strengthen some functional departments of the Group and restore the regional management system; under the premise of scientific assessment of various departments, continue to convey corporate culture and the value of "changing fate with both hands" to employees, and vigorously advocate the dedication of love and trust as the core; timely shrink the Group's business expansion plan, if the average turnover rate of the Group's Haidilao stores is less than 4 times/days, In principle, new Haidilao stores will not be opened on a large scale.
Haidilao said in an open letter released on its official Weibo on the same day that the operation of the stores planned to close this time did not meet expectations mainly due to the rapid expansion strategy formulated by the company in 2019, which was manifested in the mistakes in the location of some stores, the organizational structure changes that made managers at all levels incomprehensible and exhausted, the insufficient number of excellent store managers, the excessive belief in the KPI indicators of connecting interests, and the lack of corporate culture construction.
The number of stores expanded, but the turnover rate and net profit margin plummeted
The data shows that in the first half of 2021, Haidilao achieved operating income of 20.094 billion yuan, an increase of 105.9% over the same period in 2020.
The main reasons are the relaxation of epidemic prevention and control measures, the increase in the number of business days during the reporting period, the recovery of passenger flow and the increase in the number of stores. Profit for the first half of 2021 was RMB96.5 million, a year-on-year turnaround.
Haidilao said in its semi-annual report that the main reasons affecting the performance are: the company opened a large number of new stores in the second half of 2020 and the first half of 2021, and the related expenses increased significantly; the newly opened stores reached the first breakeven and realized cash investment returns longer than in previous periods; and store operations were still affected by the continuous impact of the new coronavirus epidemic. Chinese mainland the epidemic prevention and control situation is better, there are still cases of repeated epidemics in some areas. However, there is still great uncertainty about the overseas epidemic situation, and overseas stores have been greatly affected.
From the perspective of the number of stores, the financial report shows that at the end of 2018, there were 466 stores in the world, 308 new stores in 2019, 544 new in 2020, which was hit hard by the epidemic in the catering industry, and entered 2021, 299 new stores were added in the first half of the year alone, with an average of 1.64 new Haidilao stores per day.
As of June 31, 2021, Haidilao's global stores totaled 1,597, of which 1,491 were located in Chinese mainland, and after subtracting about 300 planned closures, Haidilao still had nearly 1,300 stores worldwide.
From the perspective of the key indicators of measuring the turnover rate of catering enterprises, Haidilao's turnover rate in 2019 was 4.8 times / day, falling to 3.5 times / day in 2020, and in the first half of 2021, this data fell to 3.0 times / day, of which the new restaurant turnover rate was only 2.3 times / day.  
Behind the wave of store expansion and the decline in the turnover rate, Haidilao's net profit margin has fallen off a cliff, from 8.84% in 2019 to 1.08% in 2020, and then to 0.48% in the first half of 2021.
Market value shrinks by more than 75% in February
In response to the decline in performance, Haidilao's stock price has gone all the way down. As of the close of trading on November 5, 2021, Haidilao's share price was hk$21.05, with a total market capitalization of HK$114.9 billion, which has fallen by 75% from the all-time high of HK$85.75 in February 2021, and the market value has shrunk by three-quarters.
According to the 2021 China Rich List released by Hurun Report on October 27, Haidilao founders Daniel Zhang and Shu Ping shrank their net worth by 51% to 95 billion yuan, and the ranking dropped by 35 places to 46.
The founders reflected on blind expansion
In June this year, at the shareholders' meeting of Haidilao, founder Daniel Zhang reflected on blind expansion.
He said that he was wrong about the trend, "In June 2020, I judged that the epidemic would end in September, but until today, our stores in Taiwan and Singapore have not been able to open due to the epidemic." I misjudged the trend, and I made further plans to expand my store last June, but now I look at it with blind confidence. It was January when I realized the problem, and It was March when I reacted. ”
He admitted that he was wrong to make the decision to expand his store last June.
In response to the question of whether Haidilao will maintain sustained growth in performance in the future, Daniel Zhang first said that he was not hopeful as the largest shareholder of Haidilao. He believes that enterprises are organizations and have the same vitality as people. A good year is not necessarily a good year; a bad year is not necessarily a bad year.
He also said, "Everyone myths about the seabed fishing, and I am very disgusted." You have to be rational and your investments should be cautious. I often say that if you want to know what is not true, just look at Haidilao. We are also facing the difficulties faced by all catering enterprises; we still have not solved the problems that all catering enterprises cannot solve. Blind expansion is definitely going to happen, and once I integrate my current stores, I will expand because that's my mission. When I am stable, I will charge, and if I am unstable, I will be stable, and when I am stable, I will charge again until the bottom of the sea falls. ”
Securities Times Double Eleven Pet Fan Benefits Are Coming!!
This "Double Eleven" shopping festival,
Securities Times wants to do big things!
What's the situation?
Editor: Ye Shujun
yeshuy 
Copyright Notice
All original content of securities times platforms shall not be reproduced by any unit or individual without written authorization. Our company reserves the right to pursue the legal responsibility of relevant actors.
Reprint and cooperation can contact the Securities Times Assistant, WeChat id: securitiestimes
end
Click Keywords to view it
Periscope series in-depth report丨 Stock Affairs Column丨Invest Little Red Book丨e Company Investigation丨 Times Meeting Room 丨 Shady Investigation丨 72-year-old Haier founder Zhang Ruimin retired 丨 Network legend "Shimao and Lujiazui Trust Talk About Extension"? The company's emergency rumors丨 is too hot! Luo Yonghao also wants to enter, the meta-universe concept of multi-share up and down 丨 210 billion lithium battery giant crazy expansion! Spend more than 30 billion power storage丨 Blade inward! 300 billion domestic goods giant iron fist anti-corruption: the deputy director of the important department asked for bribes, private fraud, has been criminally detained by the police 丨 another liquor fund emergency restriction of purchase, what signal to release? 丨 There is a follow-up! 2.8 billion yuan deposit "disappeared" company: again! Unbeknownst to you 丨 Another housing enterprise is in a dilemma! 300 million financial management is not on 丨 China Mobile IPO will be over 丨 The overall national vegetable production is normal, and the total supply is sufficient! 丨 "No way back is the road to victory!" "Huawei held the inaugural meeting of the formation of the legion
![Nezha Auto changed its name and caused disagreement! Zhou Hongyi said he disagreed with CEO Daniel Zhang[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)