Just now, the 300 billion restaurant giant – Seabed Rao suffered a double blow.
On the evening of March 1, Seabed Rao (06862.HK) announced on the Hong Kong Stock Exchange that it expected its net profit for fiscal 2020 to drop by about 90% compared to 2019. This performance caused an uproar in the market and was also once on the Weibo hot search list.
In the face of the precipitous drop in results, Haidilao gave the explanation that the restrictions imposed on consumer establishments due to the Epidemic prevention and control measures had a significant impact on the Group’s operations, in addition to a foreign exchange loss of 235 million yuan due to fluctuations in the exchange rate between the U.S. dollar and the Chinese yuan.
Another blow to Haidilao was the “room monitoring” incident, according to media reports, Haidilao installed cameras in a number of stores, which instantly sparked heated debate across the network and once hit the microblogging hot search.
300 billion undersea fish performance fell off a cliff
Under the epidemic, even the Chinese hot pot giant can’t carry The load.
On the evening of March 1, Seabed Rao, which has a total market capitalization of HK$364.9 billion, disclosed a preview of its 2020 results, expecting its net profit for the year 2020 to drop by about 90% compared to that of 2019.
According to the announcement, Seabed’s net profit for 2019 is 2.347 billion yuan, which means that Seabed’s net profit for 2020 will only be 235 million yuan.
In the first half of 2020, when the epidemic was at its fiercest, Seabed’s net profit lost 965 million yuan, .
According to the financial report, in the second half of 2019, Haidilao’s net profit was 1.434 billion yuan, meaning that Haidilao’s net profit in the second half of 2020 fell by 16.3% year-on-year.
In the face of the precipitous decline in performance, Seabed Rao gave two major reasons in the performance forecast.
- restrictions imposed on consumer establishments in countries and regions around the world for the purpose of epidemic prevention and control had a significant impact on the Group’s operations.
- Net foreign exchange losses of approximately RMB 235 million due to fluctuations in the exchange rate of the US dollar against the RMB, the vast majority of which were unrealized foreign exchange losses.
Meanwhile, Haidilao said that in 2020, the Group has been closely monitoring the market conditions and adjusting its business strategies and operations to reduce the negative impact. The Group also actively opened new restaurants and continued to promote the Haidilao restaurant network. In addition, the Group has implemented proactive measures to control rental and other operating costs, managed working capital rigorously and utilized credit facilities to ensure solid cash flow and a strong cash position.
Haidilao almost lost revenue due to the 46-day closure of its business due to the epidemic
The restaurant industry was expected to be worse in 2020, but not that bad.
As we all know, since the outbreak of the epidemic, China’s catering industry has borne the brunt of the losses and has been one of the worst offenders. According to data released by the China Cuisine Association, the national catering industry achieved sales of only 290 billion yuan from January to February 2020, a year-on-year decline of over 60%.
Seabed Rao, which relies heavily on offline stores, was naturally not spared.
According to the financial report data, the vast majority of Seabed Rao’s revenue comes from offline stores, accounting for more than 96%. According to the earnings data, in 2019, Haidilao’s restaurant operations contributed 25.588 billion yuan in revenue, with daily revenue amounting to more than 70 million yuan, accounting for 96.3% of total revenue.
Image source: Haidilao’s 2019 annual report
And during the epidemic, Seabed Liao was closed for up to 46 days, with almost no revenue from its offline stores. CITIC Capital had issued a research report saying that the epidemic was estimated to bring a loss of about 5.04 billion yuan to Haidilao’s revenue in 2020.
Moreover, before the outbreak of the epidemic, Seabed Rao was expanding frantically and running for the hills. According to its financial report, the net increase in the number of Seabed Rao’s stores in 2019 reached 302, equivalent to opening one every 1.2 days, an increase of 64.8% compared to 2018.
The pressure on Haidilao was not too great when it was suddenly hit by an epidemic “black swan event”. 2020 February 3, Haidilao chairman Zhang Yong revealed in a video that the number of Haidilao employees had reached 122,405, with huge labor costs.
Haidilao’s “private room monitoring” fiasco, intensifying
And in the seabed lao crazy counter-trend expansion, blindfolded at the same Time, public opinion events occur frequently, recently exposed to the “private room monitoring” fiasco.
A media visit to a number of Seabed Rao stores found that the Seabed Rao stores installed cameras in the private rooms, in the network triggered a hot debate, once on the microblogging hot search.
After the exposure of the private room camera, instantly caused a heated discussion, some consumers believe that the camera will leak consumer privacy, after all, choose the private room is to have a private space, but there are cameras will have a sense of every move is monitored.
In this regard, Haidilao staff said that basically every table has monitoring, easy to monitor lost items and Food safety, in order to prevent guests from losing things, easy to retrieve.
For the installation of cameras in the room, Haidilao previously replied to the media that: to protect consumer dining safety, each store will be combined with store characteristics to install monitoring equipment, including rooms; at the same time, Haidilao focus on protecting customer privacy, the company has a monitoring management system, process, while strengthening control through technical means to protect the rights and interests of consumers.
According to the “Beijing Municipal Public Security Regulations for Catering Enterprises”, large and medium-sized catering enterprises should set up image information collection points at relevant locations in the business premises in accordance with regulations, and set up a significant reminder of information, and the above-mentioned locations do not include private rooms. Some other local laws and regulations clearly stipulate that entertainment venues private rooms and other areas and places involving personal privacy, forbidden to set up video image information systems.
Ding Jinkun, a lawyer at Shanghai Dabang Law Firm, said that if some Haidilao stores install cameras in private rooms without informing consumers, they are suspected of violating consumers’ privacy. The communication between consumers in a banquet is a private conversation and should not be made public. If leaked, it will make consumers uneasy. Therefore, the private room should not be equipped with cameras to monitor the guests’ every move.
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