Hotpot chain Haidilao jumps on profit view, lifts China-focused food stocks

China Resources Beer Holdings

27/02/2023 08:10

SINGAPORE, Feb 27 (Reuters) - Shares of Haidilao
International Holding Ltd  6862.HK  soared as much as 20% on
Monday after the Beijing-based hotpot restaurant chain said it
would be profitable for 2022, boosting other food and beverage
stocks on bets of a revival of demand in China.
    Haidilao's stock scaled a one-month high of HK$23.15, before
easing to trade up 12% at HK$21.50. It was the biggest
percentage gainer on Hong Kong's Hang Seng Index  .HSI , which
was down 0.63% on the day due to geopolitical worries.
    China started dismantling its 'zero-COVID' restrictions in
December, in a boost to consumer and food companies that were
battered during the pandemic, with Haidilao and peers Jiumaojiu
International Holdings Ltd  9922.HK , LH Group Ltd  1978.HK  and
Cafe De Coral  0341.HK  among those expected to benefit.  
    Haidilao said it expects to record a net profit of no less
than 1.3 billion yuan (about $187 million) for 2022, compared to
a loss of 4.16 billion yuan in 2021, also helped by a gain of
329 million yuan on the cancellation of its 2026 notes as well
as its restructuring plan.
    The company's business performance will be further improved,
it said late on Friday, due to the easing of COVID curbs in
mainland China.
    Brokerage Nomura said the company's adjusted net profit
margin in the second half of last year could return to the level
seen in the second half of 2020, and the faster-than-expected
margin recovery trend may boost sentiment on the stock.
    The stock is up roughly 90% since the start of November, far
outperforming the broader Hang Seng Index's gain of 35% in the
same period.
    Shares of Jiumaojiu International, LH Group, Cafe De Coral,
China Resources Beer  0291.HK  and Budweiser Brewing Co APAC
 1876.HK  all rose between 2% and 4% on Monday after Haidilao's
forecast.

 (Reporting by Ankur Banerjee in Singapore; Editing by Savio
D'Souza)
 ((ankur.banerjee@thomsonreuters.com;; Mobile - +65 8121 3925;
Twitter: @AnkurBanerjee17;))