Sunday, September 25, 2022
Martin Hennecke

Hotpot chains feel heat of pandemic
<p>Mainland hotpot chains issued profit warnings yeterday saying the Covid pandemic had adversely affected restaurant operations in most regions of China in the first half of the year.</p><p>Haidilao International (6862) warned it will suffer an interim net loss of 225 million yuan to 297 million yuan (HK$261.5 million to HK$345.2 million) as of June compared to a net profit of 96.5 million yuan last year.</p><p>The loss was mainly caused by fixed expenses and staff costs in some of its restaurants despite the suspension of business or dine-in services due to the recurring pandemic in the mainland from March to May.</p><p>Xiabuxiabu Catering Management (China) (0520) also warned its interim net loss would range from about 270 million to 290 million yuan and revenue would decrease by about 29 percent to 2.16 billion yuan.</p><p>Detailing the impact of the pandemic, Xiabuxiabu said that 92 of the 116 cities in which it is present were affected by Covid restrictions, accounting for about 79 percent of the total number of cities where it operates.</p><p>In particular, major first-tier cities such as Beijing, Shanghai, Shenzhen, and Tianjin were severely affected by the pandemic, it said.</p><p>Despite the negative prediction, the company said it was planning to invest in its digitalization. Chairman He Guangqi said Xiabuxiabu will invest 100 million yuan in stages to promote the digitalization and intelligent upgrading of its industrial chain, including procurement quality control, warehousing and distribution, operation management and digital marketing over the next three years.</p>

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