Net profit plummeted by 90%, Haidilao: This is not bad news

On March 1, Haidilao issued a profit warning, stating that its net profit fell by about 90% year-on-year.

Subsequently, the topic of #202090%# appeared on the Weibo hot search list, as of press time.
, Reading volume exceeds 58 million.

According to the announcement, the net profit in 2019 was 2.

347 billion yuan, and that in 2020 it was down about 90% year-on-year.
Haidilao attributed the decline in net profit to the impact of the epidemic and fluctuations in the exchange rate of the U.

Many netizens commented that this is another bad news for Haidilao.

Prior to this, Haidilao had just caused controversy over the installation of cameras in private rooms in some stores.

However, Ran Caijing compared Haidilao's first-half financial report and found that this profit warning is not bad news, it can even be said to be good news.

According to the financial report, Haidilao lost 970 million yuan in the first half of the year, and in the profit warning, the annual net profit fell by about 90% year-on-year, that is to say, it is still profitable in 2020.

Calculated by 10% of the 2019 net profit, the 2020 net profit will be around 234 million yuan.
This also means that in the second half of 2020, Haidilao's profit will be at least 1.
2 billion yuan.

Haidilao is a global chain brand.

Its financial report for the first half of 2020 shows that as of June 30, 2020, Haidilao has 935 stores worldwide, of which 868 are located in mainland China.

In 2019, the global market will have a good weather, and there will be no adverse external effects.

However, in the first half of 2020, affected by the epidemic, Haidilao had been closed for 46 days.
In the second half of the year, there were spreading epidemics in many parts of the country, and overseas epidemics have not been effectively controlled.

Industry insider Xiaokuan believes that Haidilao can still make money, which is very rare.

Since the spread of the epidemic in the second half of 2020 will mainly occur in the north, chain catering brands in the north will be more affected, and it will be more difficult to have overseas stores.
Relatively speaking, a single store is better.

Ran Caijing learned that Yangzhou Yangcheng Blindly Catering Co.

, Ltd.
has completed its annual mission at the end of October 2020.

Many catering operators believe that 2020 is too difficult, and Haidilao is still very profitable.
This is also good news for the entire catering industry.

It is understood that Haidilao is also satisfied with this year's performance because the external environment is not good because it is force majeure.
An insider said that no loss in 2020 is certainly not bad news.

The judgment of the capital market can also be seen.
On March 2, Haidilao's stock price did not fall as much as many people expected.
It was relatively stable throughout the day, closing down 0.
51%.
Compared with the Hang Seng Index, which fell 1.
21%, Haidilao's stock price is relatively strong.

Studying Haidilao was once a prominent study in the catering industry, but on December 20, 2020, Haidilao Chairman Zhang Yong said at a symposium, "My suggestion is to stop learning Haidilao.
We are still a problem.
.
"

This profit warning has a lot of negative reviews after its release because Haidilao has experienced various problems in the past two years, which has repeatedly disappointed consumers and damaged reputation.

In April 2020, Haidilao was complained by consumers due to price increases; in September, it was criticized by netizens for the fact that the dishes are very similar to Banu Maodu hot pot; in October, Haidilao also appeared in the "10 1.
In the "Analysis Report on Consumer Rights Protection Public Opinion", he was criticized by name for "paying to jump in the queue", and so on.

Catering practitioner Zhao Cheng said, “When consumers love you, they will find a good reason for everything.
When they don’t love you, they are spurring and finding fault.
” Haidilao should have a deep understanding of this, 2017 Haidilao was exposed by the media.
The back kitchens of the Beijing Jinsong store and the Sun Palace store were dirty and messy, and even mice crawled into the food cupboard.
After Haidilao apologized for the rectification, consumers chose to forgive and support because of love.
After that, Haidilao continued its rapid development and went public in 2018.

Nowadays, due to the decline of word-of-mouth, what consumers like to hear is that "Haidilao has no good news".
For the service-oriented Haidilao, how to regain the reputation of consumers is not only a problem of development, but also a problem of survival.

Haidilao is still profitable

Haidilao is still profitable

On the evening of March 1, Haidilao issued a profit warning.
It is expected that the net profit for the year ended December 31, 2020 will be about 90% lower than the group's net profit of approximately RMB 2.
347 billion for the year ended December 31, 2019.

Regarding the reasons for the decline in performance, Haidilao said that this is mainly due to the 2019 novel coronavirus outbreak and subsequent disease prevention measures, as well as restrictions on consumption places implemented by countries and regions around the world.
In addition, due to fluctuations in the exchange rate between the US dollar and the RMB, its net exchange loss was approximately RMB 235 million, most of which were unrealized exchange losses.

Under normal circumstances, net profit plummeted by 90%, which is not good news for any company.
But under the influence of the black swan of the 2020 epidemic, under the premise that the entire catering industry has suffered heavy losses, it is another matter.

According to data released by the China Cuisine Association, within 7 days of the 2020 Spring Festival holiday, the epidemic has caused a loss of about 500 billion yuan in the retail sales of the catering industry.

China Securities Investment has issued a research report saying that the epidemic is estimated to cause a loss of about 5.
04 billion yuan in Haidilao's revenue in 2020, which is 18.
98% of Haidilao's annual revenue in 2019.

On the evening of September 14, 2020, Zhang Yong said in "Zhang Lei's Friends", "This year, I was injured the most.
I was killed nine times.
During the epidemic, stores were closed every day, and wages had to be paid, so the company had to pay.
"

On September 15, 2020, Haidilao’s first half-year financial report revealed that in the six months ended June 30, 2020, the company’s net profit was negative 970 million yuan.

In other words, to achieve the performance in the profit warning, Haidilao must complete a net profit of 1.
205 billion yuan in the second half of 2020.

On April 23, 2020, Haidilao released its 2019 annual performance report.
In 2019, Haidilao’s annual net profit income was 2.
35 billion yuan, minus the net profit of 911 million yuan as of June 30, 2019.
Net profit income in the second half of 2019 was 1.
434 billion yuan.

By comparison, it is not difficult to find that Haidilao's net profit income in the second half of 2020 has basically returned to normal compared with the same period in 2019.
From this perspective, Haidilao's performance is remarkable.

Returning to normal is Haidilao's shop opening plan.

According to the first half of 2020 financial report released by Haidilao, in the first half of 2020, Haidilao opened 173 new stores, and its global store network increased from 768 on December 31, 2019 to 935 on June 30, 2020.
Of these, 868 are located in 164 cities in mainland China.

According to Haidilao's plan, 3,000 stores will be opened in mainland China alone.

An insider told Ran Cai that in the second half of 2020, Haidilao still opened some stores, and the number of stores has exceeded 1,000, but it will take time for the new stores to grow stronger.

It is worth noting that although Haidilao’s 2020 performance is not bad compared to its peers, its downward trend did not start with the epidemic.

The financial report shows that Haidilao’s annual operating income of 26.
56 billion yuan in 2019, although an increase of 56.
5% over the same period in 2018, has begun to slow down if the growth rate is viewed.
In 2018, Haidilao’s annual operating income was 16.
97 billion yuan, but its year-on-year growth rate compared to 2017 was 59.
3%.

In addition, the turnover rate of Haidilao restaurants has also fallen from 2019.

The 2019 Haidilao financial report shows that the average restaurant turnover rate is 4.
8 times per day.
Ran Caijing learned from public data that in 2015, 2016, 2017 and 2018, Haidilao’s turnover rate in Mainland China was 4.
0 times/day, 4.
5 times/day, 5.
0 times/day, and 5.
0 times/day.
day.

In other words, 2019 has become the first time that Haidilao has experienced a decline in its turnover rate since 2015.
And this number will drop to 3.
3 times per day in the first half of 2020.

The opposite of the decline in the turnover rate is the increase in customer unit prices.
Among them, the first-tier cities rose from 98.
3 yuan in 2017 to 106.
1 yuan, the second-tier cities rose from 94.
8 yuan to 99.
4 yuan, and the third-tier cities and below rose from 92.
1 yuan to 94.
9 yuan.

Word of mouth continues to decline

Word of mouth continues to decline

Founded in 1994, Haidilao has grown from a small family store to a listed company with a market value of more than 360 billion yuan.
The service has played a key role.

Zhang Yong once said: “If you want to survive, you can only have a better attitude.
What guests want to be faster, and if they are dissatisfied, they can be with a smile.
”

In March 2011, a book "You Can't Learn Haidilao" not only brought Haidilao's service to the altar, but also made founder Zhang Yong a "famous teacher" among catering entrepreneurs.
The "Haidilao-style service" pioneered by it has once become a target for catering practitioners to imitate.

For example, when ordering food, the waiter will remind you that it’s enough, don’t order too much; if you wear glasses, the waiter will prepare glasses cloth for you; in addition, there are aprons, transparent sealed bags for mobile phones, and so on.
It is reported that if it is a familiar customer, the waiter will also remember your consumption habits, including you like to wear slippers, or the hair is too long and needs to be tied up.

It is worth noting that Haidilao launched these services more than ten years ago.
At that time, ordinary restaurants were not very particular about it.
Therefore, Haidilao’s services surprised consumers and won a good reputation.
.

Double used to be a loyal fan of Haidilao.
She liked to come to Haidilao whether it was for colleague gatherings, taking children out of restaurants, and even meeting with the old convention.

"It's not because of the taste of Haidilao that attracts me, but Haidilao has different service strategies for each different group.
" Double told Ran Caijing that it was the first time to take children to Haidilao, except for waiting.
They provide regular snacks when they are in a seat, and small toys when eating.
If children don’t like to sit in baby dining chairs, Haidilao will also provide thicker cushions, and even offer to help bring the children, etc.
"These make you feel good.
"

Picture source / @

Haidilao's good reputation adds great value to the brand.
A catering practitioner said that Haidilao’s bargaining power is particularly strong because of its good reputation and large brand value, which can attract traffic to the business district.
The rents of many stores are very low, and even some stores do not need to pay rent, which also makes it operate.
The burden is much smaller.

Regrettably, in recent years, Haidilao has continuously exploded negative news, which has hurt word-of-mouth.

In 2017, Haidilao was exposed.
The back kitchens of the Beijing Jinsong store and the Sun Palace store were dirty and messy, and even mice crawled into the food cabinet.
In July 2020, Haidilao was again due to "a customer found plastic in the black-bone chicken rolls ordered by Haidilao’s Jinan Liancheng Plaza store" and "a batch of chopsticks used by Haidilao’s Hangzhou Fuchun Xintiandi store detected coliforms", etc.
Food hygiene issues were named.

Recently, the news that "Haidilao installed cameras in its private rooms without signs" has caused heated discussions.
Some media visited several private rooms of Haidilao stores and found that cameras were indeed installed, generally two or more cameras.

In response, Haidilao responded that in order to ensure the safety of consumers' meals, each store will install camera equipment, including private rooms, based on the characteristics of the store; Haidilao pays attention to protecting customer privacy.
The company has related systems and procedures for camera management and uses technical means.
Strengthen management and control to protect the rights and interests of consumers.

Regarding whether the installation of a camera will infringe privacy, Fu Jian, a lawyer from Henan Yulong Law Firm, believes that according to the "Consumer Rights Protection Law", consumers have the right to choose when they receive services.
The installation of cameras in the private rooms will materially affect the final choice of consumers.
If the operators do not inform the consumers, the operators will infringe the legitimate rights and interests of the consumers.
This right is not only a right to choose to receive services, but also indirectly infringes on consumers' right to privacy.

The private rooms of the restaurant were originally set up to provide a relatively undisturbed environment.
Such interference includes the noise of the environment and the interference of monitoring and video recording.
If a camera is installed in the private room, it is no different from the restaurant lobby, except that there is an extra wall.
Consumers can choose to give up or not give up their right to privacy in private rooms, but operators must inform.

"In the past two years, there have been more and more restaurants with good service like Haidilao.
Haidilao does not have much advantage in terms of taste.
What's more, the price of Haidilao is also a bit expensive.
" Now, Double also feels that Haidilao Lao is not the first choice for gatherings, and she no longer feels frustrated about the problems that have occurred in Haidilao, "a little bit like a fan.
"

It can also be seen from the turnover rate that in the past two years, Haidilao’s attractiveness to consumers has indeed declined.

Haidilao needs a new story

Haidilao needs a new story

How much is Haidilao worth? This issue has been debated since it went public.

On September 26, 2018, Haidilao was listed on the Hong Kong Stock Exchange.
It rose by more than 10% at the opening, and its market value exceeded 100 billion yuan at one time, and the closing price fell.

After that, Haidilao's share price rose step by step in the controversy.
On February 16 this year, Haidilao’s share price hit a record high, reaching 85.
8 Hong Kong dollars, and the company's total market value once exceeded 450 billion Hong Kong dollars.
Subsequently, the stock price began to fall.
As of March 2, Haidilao had a market value of 363 billion Hong Kong dollars.

The single main business is an important point of divergence.
According to the financial report, Haidilao’s main income comes from restaurant operations.
In 2019, the restaurant achieved a revenue of 25.
889 billion yuan, accounting for 96.
3% of the total revenue.

Because of the epidemic, the single risk of Haidilao’s main business has been highlighted.
Once it is unable to operate or the passenger flow decreases, it will suffer substantial losses.
However, an industry insider told Ran Caijing that the problem of starting with service has also been exposed.
The opinions of customers are too important to Haidilao.
For example, in April 2020, Haidilao wanted to increase prices to offset the increase in costs.
But because of the big consumer opinions, they had to apologize and reduce the original price, which is not in line with normal market laws.
These problems require Haidilao to develop new products as soon as possible (easy to establish a new price system) and increase product premiums.

Picture source / @

In fact, Haidilao is also working hard to find new growth points.

Haidilao wrote in its financial report for the first half of 2020: In the first half of 2020, we will continue to promote the intelligentization of stores and strive to provide customers with standardized and personalized services.
As of June 30, 2020, we have equipped 3 stores with smart robot arms, 23 stores have adopted the [Thousands of People and Thousands of Flavors] smart pot machine, and 958 food delivery robots and robots have been used in restaurants around the world.
385 [Xiaomei] telephone robots, IKMS intelligent kitchen management system, and store ordering system are also constantly updated and iterated.

But smart restaurants may not be as beautiful as Haidilao's depiction.

On October 28, 2018, Haidilao's first smart restaurant officially opened in Beijing.
In September 2020, Ran Caijing visited the shop and found that smart restaurants are actually more of a gimmick.
The diners did not show interest in the word "wisdom", and it can be said that it is not much different from ordinary store dining.

"Chengdu Commercial Daily" also wrote that the Haidilao food delivery robot "average moving speed is close to the normal walking speed of humans", plus the reaction speed when encountering obstacles, "the actual capacity may not be able to meet the needs of Haidilao customers.
"

In fact, before the smart restaurant, Haidilao has also tried intelligence, such as allowing customers to order directly on the desktop, but because it needs to be achieved through the top-level projection, it has not achieved a fundamental innovation in technology.

In addition to smart restaurants, Haidilao's sub-brands have also been exploring.

In August 2020, Haidilao’s “Eighteen Beng” registered five trademarks, “Lin Xiaoman”, “Qin Xiaoxian”, “Fanfanlin”, “Smile and Full Fortune”, and “Baobao Nuanwu” in one go.
The operating status covers catering and accommodation, food, convenience food and other categories.

According to the information from Tianyan Check, Beijing Shiba Beng Catering Management Co.
, Ltd.
completed its registration on September 29, 2019.
It is a wholly-owned subsidiary of Xinpai (Shanghai) Catering Management Co.
, Ltd.
, and Xinpai (Shanghai) is a wholly-owned subsidiary of Haidilao.
the company.

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