Restaurant chain keeps doors shut

Business | Avery Chen 10 Feb 2020

Chinese restaurant chain operator Jiumaojiu International (9922) yesterday said it will further extended closure of all restaurants amid Wuhan coronavirus outbreak.

The operator of the Tai Er and Jiu Mao Jiu restaurants said has suspended the operation of all restaurants since January 29. The company operated 328 self-operated and franchised restaurants in mainland China as of December. Jiumaojiu saw its share price surge 56.36 percent on its market debut last month but its shares have fallen over 15 percent from a high of HK$10.52 on January 16.

Its rival Haidilao International (6862), which operates nearly 600 hotpot restaurants globally, also has closed its mainland restaurants since January 26. Haidilao owned 550 restaurants in mainland China as of June last year.

The hotpot chain is expected to lose over 1.1 billion yuan (HK$1.22 billion) after temporarily closing all of the restaurants in China for 15 days. Haidilao generated revenue of 10.42 billion yuan from mainland China for the first half of 2019, representing a daily revenue of around 57.9 million yuan. Meanwhile, the company's staff cost reached 3.65 billion yuan for the first six months last year or 20.29 million yuan per day. That means Haidilao has to pay at least 1.1 billion yuan for a 15-day closure.

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