This article is from WeChat official account:AI Finance (ID: aicjnews) , Authors: Shao Lanjie, Ma Weibing, head picture from: Vision China
The Xiabuxiabu hot pot once loved by young people is now at the most difficult time. Within one month, its brand Coucou CEO Zhang Zhenwei and Xiabuxiabu CEO Zhao Yi left one after another. Gave a plunge of 20% and 15% in response. For Xiabuxiabu, which has a total market value of only 10.854 billion Hong Kong dollars, it is equivalent to an evaporation of about 2 billion Hong Kong dollars a day, which is not a small drop.
However, this company looks calm and quiet. The relevant person in charge of Xiabuxiabu told AI Finance and Economics: “The ups and downs of stock prices are normal fluctuations in the market trend. It does not mean that the fluctuations caused by the resignation of a certain individual, personal changes will not affect the fluctuation of the stock price.”
The market is more concerned about the fact that after Xiabuxiabu founder He Guangqi re-emerged, can this company, which was founded in 1998, regain the glory of the small hot pot?
High-level turmoil, stock price crash
At 12:20 on May 21st, at a Xiabuxiabu store on the West Third Ring Road in Beijing, the clerk shouted slogans at the door to solicit customers to enter the store. However, even one-third of the seats in the store were not full. There are more waiters than customers. However, this is nothing compared to the Xiabuxiabu share price, which is beating in the capital market.
On the morning of the same day, Xiabuxiabu issued an announcement on the Hong Kong Stock Exchange stating that as the performance of some of the group’s sub-brands failed to meet the expectations of the board of directors, Zhao Yi, the chief executive officer, was dismissed on May 20. As soon as the announcement came out, the share price of Xiabuxiabu “slumped a thousand miles”, and the intraday drop was once more than 16%. The final closing price per share was HK$10, a decrease of 14.97%, and the market value lost HK$1.9 billion in one day.
Although this announcement also mentioned that Xiabuxiabu founder He Guangqi will come out and assume the position of chief executive officer, it has not been able to reverse the decline in stock prices.
Many people in the catering industry took a sigh of relief at the “straightforward” announcement of Xiabuxiabu. The common practice of listed companies and professional managers is to get together and disperse, and “personal reasons” are the most common reason. after allLast month, Zhang Zhenwei, CEO of Xiabuxiabu’s Coucou brand, used “personal reasons” in his resignation announcement. In Zhao Yi’s announcement, he directly declared that “the board’s expectations were not met” with a clear attitude.
In the announcement more than a year ago, Xiabuxiabu praised Zhao Yi’s attitude. In August 2019, Xiabuxiabu issued an announcement stating that the group’s chief financial officer Zhao Yi has been appointed as the group’s chief executive officer. Xiabuxiabu believes that with Zhao Yi’s background and extensive experience in the group, the Group will Can benefit from it. The board of directors also believes that the appointment of Zhao Yi to the above-mentioned positions will help promote the development of the Group.
Zhao Yi has a financial background and previously worked at McDonald’s China. In 2012, Xiabuxiabu Chairman He Guangqi invited her to serve as CFO and led Xiabuxiabu to go public. At the end of 2014, Xiabuxiabu successfully listed in Hong Kong. Zhao Yi contributed. He was promoted all the way to chief executive, but he did not expect to be dismissed in less than two years.
It is worth noting that the reason for dismissal is not to directly say that the performance is not up to standard, but that “the performance of certain sub-brands of the group has not met the expectations of the board of directors.” At present, Xiabuxiabu’s sub-brands include Xiabuxiabu, Coucou, Chamicha, Xiazhuxiatang, Xiabuxiabu food and so on.
Among them, Coucou has the fastest growth rate. Although it only opened its first store in Sanlitun, Beijing in 2016, it had opened 100 stores by the end of 2019, opening a new store in an average of 13 days, far exceeding that of Zhang Zhenwei. The goal of 100 stores in the year. By the end of 2020, Coucuo has more than 130 stores, which is the growth potential of Xiabuxiabu’s performance.
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For this reason, after the resignation of CEO Zhang Zhenwei on April 17, Xiabuxiabu’s share price fell by more than 20% at the start of trading on Monday, April 19, and the closing price was HK$12.1, a decrease of 14.91%, compared with February 2021. The high of 27.15 Hong Kong dollars on the 11th evaporated 18.6 billion Hong Kong dollars, a shrinkage of more than 60%. Goldman Sachs released a report pointed out that the cou cou hot pot is a major increase in Xiabuxiabu in recent years.Long engine contributed 31% of sales last year, and the development of the brand relies on the executive ability of past chief executives. Investors should pay attention to the risks associated with their departure.
In Xiabuxiabu, the two brands of Coucou and Xiabuxiabu are operated independently, and even “respect each other as guests.” According to a person in the catering industry, “the two brands are not in a competitive relationship, but the two brands are not in competition. Suppression is basically Xiabu Xiabu, which is a bit of internal friction.” The person said for example, “Coucou’s main product is hot pot + tea rest. Chamicha is originally Coucou, and Xiabuxiabu needs to be put in place. In my own store, but Chamicha has to open an independent store, Xiabuxiabu is not allowed. Zhao Yi is a relatively strong person.”
Weak performance, shareholders lighten up their positions
On May 21st, the waiter in the West Third Ring Road shop obviously hadn’t sensed that the company was going through a storm. While waiting for customers to order, they were still eagerly asking if they could post a 100-word message in Dianping. With a good comment, “I can send you these 100 words directly, without you writing. In this way, you can upgrade the medium lamb in your set meal to a larger one.”
This single set meal that includes lamb meat costs 69 yuan. According to the information on Dianping.com, the average per capita of this store is RMB 71 and the star rating is 4.71. If the customer score is high, then cumulatively, the higher the star rating, the higher the chance of being recommended and selected.
Although Xiabu Xiabu opened a store in Beijing in 1998, more than 20 years later, its demand for praise and passenger flow is even more urgent.
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On March 31 this year, Xiabuxiabu released its 2020 financial report. According to the financial report, Xiabuxiabu’s 2020 revenue was 5.45 billion yuan; the total profit for the year was 111.4 million yuan, a decrease from the 290 million yuan in the same period last year. 96%; net profit attributable to shareholders was 18.37 million yuan, a year-on-year decrease of 99.4%; adjusted net profit was 1.300 million yuan, down 67.1% year-on-year. Compared with Haidilao’s increase in revenue but no increase in profit, Xiabuxiabu’s revenue and net profit have both directly fallen.
In addition to profit, another key data in the 2020 annual report is also declining. As the most important indicator to measure the operating status of restaurants, the turnover rate of the restaurant is shown. The financial report shows that the turnover rate of Xiabuxiabu in 2020 is 2.3, compared with 2019. The year’s 2.6 declined, and the share turnover rate of another hotpot brand under the Xiabuxiabu Group also dropped from 2.9 in 2019 to 2.5 in 2020.
“Compared with Haidilao and Jiu Maojiu, Xiabuxiabu’s overturning rate has been declining in the past three years. Haidilao’s overturning rate has more than doubled, and it is indeed a little bit compared to the peak period. Decline.” Fan Ning, executive director of the Red Meal Brand Research Institute, said to AI Finance and Economics. Regarding the decline in profits in the annual report, Xiabuxiabu Group stated that it was mainly due to the outbreak of the new crown pneumonia epidemic.
In fact, the profit growth of Xiabuxiabu has already been declining, and its performance is declining year by year. According to the financial report, the year-on-year growth of Xiabuxiabu’s net profit from 2016 to 2020 is 39.74%, 14.17%, 10.07%, -37.71% and -99.36%.
Xiabuxiabu’s fast-food-style small hot pot had a very high turnover rate in the early stage, and its turnover continued to maintain rapid growth. Xiabuxiabu used to be expensive for civilians and a lot of ingredients. The high cost performance is very popular among young people. But the current Xiabuxiabu, the customer unit price has been rising all the way.
From 2017 to 2019, the unit price of Xiabuxiabuke was 48.4 yuan, 53.3 yuan, and 55.8 yuan respectively. In 2018, per capita consumption exceeded 50 yuan, and by 2020, per capita consumption exceeded 60 yuan, reaching 62.3 yuan, compared to 2019 Of 55.8 yuan, a year-on-year increase of 11.65%. But in fact, as you can see from Dianping.com, the actual per capita consumption is much higher than this price. In response, Xiabuxiabu Group explained that it was mainly due to the Group’s continuous optimization of product portfolio, regular launch of new products, and increased delivery and sales of new products.
Under the obvious warning of bad earnings data, the capital circle finally couldn’t help it and began to vote with their feet. In mid-March of this year, half a month before Xiabuxiabu released its 2020 earnings report, Hillhouse Capital liquidated all the nearly 114 million Xiabuxiabu shares held by its two major funds. On the same day, Morgan Stanley also sold its own shares. He holds 104 million shares of Xiabuxiabu, which was reduced to 12 million shares. After the reduction, the shareholding ratio dropped from 9.25% to 0.93%.
The outgoing Zhao Yi reduced her holdings twice in January and April, and cashed out a total of about 30 million Hong Kong dollars. Capital departure, high-level personnelXiabuxiabu, who has experienced shocks, declining operating data in 2020, and undergoing major changes, is now in urgent need of a rescue operation. Founder He Guangqi decided to go out in person.
Young people no longer prefer Xiabuxiabu
After today’s announcement, He Guangqi proposed a new store opening goal at an online exchange meeting. According to reports, he will integrate the resources of the Xiabuxiabu Group, integrating the separate membership systems, R&D, and HR of the original Xiabuxiabu, Coucou, and Food. “Once the integration of resources is successful, the future Xiabuxia Bu will make breakthroughs in both East China and South China. It is expected to open 500 stores a year. The high-end brand in xiabuxiabu is also expected to open about 500 stores in the future.”
He Guangqi put the idea of solving the problem on opening a store, preparing to break through the disadvantaged areas of Xiabuxiabu in southern and eastern China. Zhao Yi once stated that 87% of Xiabuxiabu’s stores are located in the north, while Haidilao, Taier, and the group’s brand under Coucou only account for 40% of the market in the north. Xiabuxiabu, who has lived in the north for a long time, once wanted to expand rapidly to the south and replicate his own success, but instead of moving south, he fell into a vicious circle of large investment returns and low returns.
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Southern consumers pay attention to service, dishes, and scenes. This is not the advantage of fast-food Xiabuxiabu. Coupled with the continuous increase in labor and rent, the profit margin of the one-person, one-pot business model is gradually compressed. “Xiabuxiabu’s development focus is relatively north, and its brand penetration in southern cities will be relatively weak.” Fan Ning lives in Guangzhou all the year round, but until today Xiabuxiabu has only two stores in Guangzhou. Minato just entered the store last month to experience it.
However, at the moment, the most important issue for Xiabu Xiabu is not to open a store, but to bring back the sharp decline in word-of-mouth.
“I haven’t eaten Xiabuxiabu since I ate Coucuo.In my mind, Xiabuxiabu is ranked behind Shaxian snacks. Not only is it not cheaper than before, it is also not delicious. “Hotpot lover Xiaolin said. In college, Xiabuxiabu used to be the shop where she and her girlfriends must check in every time she went out, but in the past 5 years, she has rarely walked into Xiabuxiabu stores.
Previously, Xiaolin was full at Xiabuxiabu for only 30-50 yuan per meal, but now a single meal is 60-70 yuan, and a single order is about 100 yuan per person. Xiaolin vomited, “It’s really worthless to spend about 100 yuan for a meal in Xiabuxiabu.”
Xiabu Xiabu once wanted to be a McDonald’s in the field of small hot pots and quickly replicated it with standardized operations. However, a few years ago, it began to be extravagant again and abandoned the original intention of the parity route. In xiabuxaibu took a single point of view. Mainly, it is still in the form of one person, one pot, but high-end ingredients such as wagyu and seafood are added, and some stores have also introduced red wine.
When Xiabu Xiabu successively upgraded stores, she fell into another kind of embarrassment. As an old brand for more than 20 years, the shopping malls and shopping centers that Xiabuxiabu settled in are taking the public route, facing mass consumers, and the upgraded stores obviously need people with higher spending power. At the moment when Internet celebrity restaurants are everywhere, it is difficult for Xiabuxiabu’s brand power to bargain with high-end shopping malls and seize a good position.
At the same time, the way of eating for one person, after the epidemic, began to be divided into the market by self-heating hot pot. In 2020, Zihai Pot’s goal is to sell 1 billion yuan, but it was completed in the first 11 months. In May 2020, three self-heating hot pot brands including Mo Xiaoxian, Shizuren, and Zihao Hotpot received a total of more than 100 million yuan in financing. Supermarkets with hot pot food ingredients have also begun to attract capital’s attention.
Fan Ning believes, “Xiabuxiabu is a bit inaccurate in understanding the market. On the other hand, it is too early to see whether Coucou is successful, not to mention that Coucou is a very independent product line. Whether it is successful has little to do with Xiabu.”
“In the past two years, large hot pot has been a mainstream in the entire hot pot category. Small hot pot has indeed gradually changed from the mainstream category. Especially now that consumption has been upgraded, young people’s pursuit of quality has become higher and higher. It has become a social product, so the current customer acquisition capabilities of small hot pots are relatively not as strong as those of large hot pots.” Huang Bin, the founder of a certain brand of hot pot, told AI Finance and Economics.
The hot pot in the future will definitely be a match that emphasizes consumption scenes and enhances the overall sense of experience. This kind of cultural experience will be emphasized more and more. Fan Ning explained, “Nowadays, many top hotpot brands are bundled with IP and celebrities, and combined with diverse cultures to achieve marketing effects. The other side is to make breakthroughs in sub-categories, such as coconuts.Ziji, category innovation has certain development opportunities. “
Fan Ning explained that the pressure of Xiabuxiabu exists. At present, at the Red Sea track of hot pot, the market as a whole has fewer and fewer opportunities for Xiabuxiabu to make mistakes. The cost of trial and error is very low. Affordability is getting thinner.
(At the request of interviewees, Huang Bin and Xiaolin are pseudonyms in the text)
This article is from WeChat official account:AI Finance (ID: aicjnews), Authors: Shao Lanjie, Ma Weibing