Chinese hotpot chain Haidilao misses first-half profit estimates amid intensified competition

Chinese hotpot chain Haidilao International (6862) missed first-half profit estimates as the table turnover rate dropped amid intensified competition in the catering market in China. 

The company recorded a 13.7 percent decline in net profit to 1.76 billion yuan (HK$1.92 billion) for the six months through June, far less than analysts’ estimates of 2.2 billion yuan.

Haidilao attributed the fall to a decrease in table turnover rate and initial adjustments to innovative models in terms of products and scenarios, saying that there is still "dificiency" in the management capabilities of the company, according to a filing on Monday.

Revenue for the period slid 3.7 percent to 20.7 billion yuan, matching expectations. 

Core operating profit plunged by 14 percent to 2.41 billion yuan.

The overall table turnover rate of self-operated Haidilao restaurants was 3.8 times per day, down from 4.2 times a year ago, mainly due to the impact of intensified competition in the catering market and evolving customer consumption needs, the filing said. 

The Haidilao hot pot operated a total of 1,363 restaurants as of the end of June, including 1,299 in China, 23 in Hong Kong, Macau, and Taiwan, and 41 franchised restaurants. 

It opened 28 new restaurants in the six months, but closed 33 existing ones, resulting in a net decrease of 5 restaurants.