Wen / Qi Gong

Product / Node Finance

August 24, "hot pot grass"Haidilao International Holding (06862.HK)Announced results for the first half of 2021. According to the financial report, its revenue soared 105.9% to 20.09 billion yuan compared with the same period last year, and its profit soared 110% to 96.5 million yuan compared with the same period last year.

At the same time, the company also disclosed a series of major personnel changes. Shu Ping resigned as a non-executive director and a member of the audit committee, Shi Yonghong resigned as an executive director, and Yang Lijuan was appointed as an executive director and deputy chief executive officer.

It is worth noting that the two directors who resigned are both veterans of Haidilao International Holding. Shu Ping is the wife of Haidilao International Holding's current chairman of the board of directors, Zhang Yong, and Shi Yonghong has always been the "second-in-command" of Haidilao International Holding.

Although Haidilao International Holding stressed in the announcement that this belongs to the adjustment of the company's internal organizational structure, outsiders think that it is related to its depressed performance.

/ 01 /

Not only open a shop, but also expand.

On a larger scale, Haidilao International Holding's report card on both revenue and profit growth actually did not meet market expectations, and the profit level was still nearly 90% lower than that in 2019 before the epidemic.

Nomura Oriental International Securities previously released a research report saying that although Haidilao International Holding's low base sales grew by more than 100% year-on-year, his total income was still about 12% lower than the forecast.Huatai、Northeast SecuritiesA number of investment banks, such as Credit Suisse, are bearish, saying that the pressure on their profit margins is higher than expected.

According to the node financial analysis, Haidilao International Holding's relatively excellent revenue performance during the reporting period was partly due to a low base in the same period last year, and partly due to an increase in the number of stores and a pick-up in the mood of offline dinners.

According to the financial report, as of June 30 this year, Haidilao International Holding had a total of 1597 stores, compared with 1298 at the end of last year.

In other words, Haidilao International Holding added 299 stores in the first half of the year, nearly 2 new stores a day. Compared with the first half of 2020, Haidilao International Holding opened 167 new stores; compared with the first half of 2019, which was unaffected by emergencies, Haidilao International Holding opened only 130 stores.

The rate of store opening is already more than half of the number of new stores added for the whole of 2020.

Just this past June, Zhang Yong reflected because he had taken too big a step. "I was wrong about the trend. I made a further plan to expand the store in June last year, and now I am really blindly confident."

For the catering industry, there is indeed a dilemma between expansion and profitability, and encrypted stores are often the only growth point.

On the one hand, only by continuously increasing the number of stores and covering a wider range of users can catering enterprises expand their revenue scale and then support the company's overvalued logic, but on the other hand, it is not so automated to do business around one of the people's livelihood, and it is difficult for marginal costs to fall with the expansion of stores. On the contrary, it may fall into the negative effect of diminishing marginal returns because of poor operation, intensified competition, rising prices of foodstuffs and so on.

Data support, put aside the sharp decline in performance in 2020, 2017-2019, Haidilao International Holding single store net profit from 3.765 million yuan to 3.533 million yuan, and further dropped to 3.053 million yuan, three consecutive years of decline.

In the first half of 2021, Haidilao International Holding's same-store sales were 84800 yuan, the net profit per store was only 59200 yuan, and the net profit margin was 0.48%. In the same period in 2019, the three indicators were 143700 yuan, 1.536 million yuan and 7.78%, respectively.

Judging from the current signs, Haidilao International Holding has not yet found a solution to store expansion and declining single-store profits, and as a result of business expansion, Haidilao International Holding's capital-to-debt ratio reached 75.4% in the first half of 2021, about double that of the first half of 2020 compared with the same period last year.

For future development plans, Haidilao International Holding said in the financial report that he will continue to steadily improve restaurant density and expand restaurant coverage.

/ 02 /

The turnaround rate has dropped to 3 times per day. What do you think?

For a long time, our inherent impression of Haidilao International Holding is good service and platoon leader, among which only one item makes Haidilao International Holding stand erect "altar".

However, with the turnaround rate decreasing year by year, eating Haidilao International Holding hotpot should not have to wait so long.

Generally speaking, the turnover rate is an unavoidable indicator for any catering enterprise, which is calculated by dividing the income from restaurant catering sales by the total flow of restaurant customers during the year, indicating the reuse rate of the table.

The high turnover rate means that in the limited space and limited business hours, the enterprise can increase the turnover rate of seats, increase revenue exponentially, increase the ability to make money, and vice versa.

Therefore, the decline in overturning rate is an unfriendly signal for catering enterprises.

In the first half of 2021, the turnaround rate of Haidilao International Holding was 3 times per day, which was 0.5 times less than that during the epidemic in 2020.

In a nationwide macro environment, public data show that catering income in March this year was higher than that in the same period in 2019 for the first time, and has returned to its pre-epidemic level, indicating that the deterioration of Haidilao International Holding's turnover rate is mainly due to internal problems.

In fact, Haidilao International Holding also said frankly in the financial report that the operating results did not meet the expectations of the management, reflecting the need for efforts to adjust and improve the company's internal management and operation.

As mentioned earlier, the turnaround rate is a very important indicator, but it itself is still a very awkward indicator.

Zhang Yong once said, "when we set the turnover rate as an assessment index, employees will try their best to achieve a high overturning rate." However, when the turnaround rate reaches more than 5%, consumers have to wait for 1 hour, affecting the consumer experience. Later, we thought that it was more appropriate to reduce the turnaround rate to 4.5, but there was a problem with the innovation rate. So we add the innovation rate and repurchase rate to the assessment, there are still problems. "

However, in terms of the current 3 times / upside-down rate, Haidilao International Holding already has the possibility of "not being able to make money".

Guoxin SecuritiesIt is estimated that the turnaround rate of 3 times per day is the break-even line of Haidilao International Holding's single store. In other words, if you fall below this value, Haidilao International Holding's single store hovers around the edge of small profit or loss, which is very dangerous.

The overturning rate of dismantling Haidilao International Holding in this period was 3.0times per day in first-tier cities, the same as in the same period last year, 3.1times per day in second-tier cities, a decrease of 0.4times per day compared with the same period last year, and 2.9times per day in third-tier cities and below, a decrease of 0.7times per day compared with the same period last year. The main sources leading to the decline in Haidilao International Holding's turnaround rate are second-tier and third-tier stores and below.

In recent years, Haidilao International Holding has accelerated the layout of low-tier cities, and half of the new stores in the first half of this year are in third-tier and below cities.However, from the utilization rate of the dining table, Haidilao International Holding did not stick to consumers in low-line cities, but diluted the overall turnover rate of the company, and the quality of expansion needs to be improved.

Lengthening the timeline, Haidilao International Holding's turnaround rate is a continuous decline curve, which is 5.0times / day, 4.8times / day and 3.5times / day from 2018 to 2020, respectively.

The weakness of the performance has been fed back to the capital market. after many adjustments, Haidilao International Holding's share price has fallen to about HK $28 per share, down nearly 70% from its all-time high of HK $85.80 in February this year. The rolling price-to-earnings ratio has fallen from more than 800 times to more than 90 times.

How to make the capital market re-boost its confidence in itself has become an urgent problem for Haidilao International Holding.

Node Finance statement: the content of the article is for reference only, the information or opinions expressed in the article do not constitute any investment advice, and Node Finance shall not bear any responsibility for any action taken as a result of the use of this article.

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