Hotpot chain Haidilao jumps on plans to close or suspend 300 eateries

Haidilao International Holding

08/11/2021 02:24

** Shares of China's hotpot chain Haidilao International
Holding Ltd  6862.HK  jump 11.4% to HK$23.45, biggest daily pct
gain since Aug 2020
    ** Stock extends gains for a second session, hits highest
since Oct. 28; biggest pct gainer on the benchmark Hang Seng
Index  .HSI  and Hang Seng China Enterprises Index  .HSCE  
    ** The hotpot chain operator says it has decided to shut
down or suspend operations of ~300 Haidilao restaurants with
relatively low customer traffic and unsatisfying results by end
of 2021  urn:newsml:reuters.com:*:nFWN2RW20U
    ** Says co will not lay off employees and will properly
settle them within the group; says it will slow down business
expansion plan 
    ** Citi maintains "neutral" rating on the stock but trims TP
to HK$23.80 from HK$30.30 on cutting Haidilao's core net profit
forecast 
    ** On the positive side, store closures will reduce start-up
loss and boost table-turn of nearby Haidilao stores - Citi
    ** Brokerage says slowing new openings will reduce capex;
anticipates co to re-accelerate openings in 23E 
    ** Hang Seng consumer goods and services index  .HSCGSI 
gains 0.2% 
    ** The Hang Seng China Enterprises Index  .HSCE  slips 0.3%
and the benchmark index  .HSI  eases 0.4%

 (Reporting by Donny Kwok)
 ((donny.kwok@thomsonreuters.com))