Haidilao Expected to Report $143 Million 1st Half Net Loss
What’s new: Haidilao International Holding is expected to report its first net loss since the hot pot restaurant chain went public in September 2018 in Hong Kong, reflecting the effects of Covid-19 pandemic shutdowns.
Revenue declined 20% to 9.4 billion yuan ($1.34 billion) for the first six months as expenses didn’t fall with the company taking epidemic prevention measures, Haidilao said Monday.
The restaurant chain is expected to report a net loss of as much as 1 billion yuan for the first half, reflecting the impact of Covid-19, analysts at Dongwu Securities said.
Haidilao adjusted its business strategy to reduce the negative impact of the epidemic, including promoting takeout services, diversifying its meal packages and developing retail products such as semi-finished meals, the company said.
The background: Haidilao shut down all of its restaurants on the Chinese mainland in late January amid the coronavirus outbreak. It started reopening in mid-March and only fully resumed business in mid-April.
As part of efforts to offset losses during the shutdown, Haidilao tried to raise prices but faced strong resistance as consumers boycotted the restaurant online. The company later apologized and lowered prices to where they were before the outbreak.
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