China's Haidilao hits 2-1/2-year low as Goldman cuts earnings estimates

Xiabuxiabu Catering Management (China) Holdings

27/10/2021 07:57

** Shares of Chinese hot pot chain Haidilao International
Holding  6862.HK  drop 8.5% to HK$23.10, lowest since March 2019
and down for a fifth consecutive session 
    ** Stock is the biggest percentage decliner in the Hang Seng
Index  .HSI  and the Hang Seng China Enterprises Index  .HSCE  
    ** Goldman Sachs cuts Haidilao's earnings estimates with
2021E turning into a net loss of 170 mln yuan ($26.63 mln) from
1.4 bln yuan profit and downward adjustment of 13%-33% in
2022-25E 
    ** Earnings estimate cuts come amid recent multi-province
COVID-19 outbreak and slow recovery in the past few months
    ** Goldman maintains "neutral" rating but cuts TP to HK$27
from HK$34
    ** Says the restaurant chain operator will be more cautious
on store network expansion amid fluid COVID-19 situation and
weak consumption sentiment, and brand rebuilding could take time
    ** Shares of smaller rivals fall, Xiabuxiabu Catering
Management China  0520.HK  declines 3.2% and Jiumaojiu
International  9922.HK  drops 3% 
    ** The Hang Seng Commerce & Industry Index  .HSNC  falls
2.7%, and Hang Seng consumer goods and services index  .HSCGSI 
drops 1.8%
    ** The Hang Seng China Enterprises Index  .HSCE  declines 2%
and the benchmark index  .HSI  is down 1.8%
    ** Stock of Beijing-based Haidilao down 57.7% this year, as
of last close
    

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