Haidilao's market value has evaporated more than HK $240 billion in four months

Haidilao (06862) (06862. HK) was once popular by virtue of its "meticulous" service, and quickly became "the first share of hot pot". However, its share price has plummeted in the past four months, and its leader Zhang Yong has also lost his position as "the richest man in Singapore".

Zhang Yong once positioned Haidilao as a popular brand and advocated that the cheaper the better“ High end restaurants don't make money. Some brands are exquisite, spend a lot of money and hire a lot of stars. They all know that they are very high-end, but the ones that make money, such as Starbucks and McDonald's, are actually popular brands. "

In fact, the general view of the outside world is that what makes Haidilao famous is not the cost performance, but the service. But Zhang Yong doesn't think so. He thinks that the reason why Haidilao is powerful and invincible is that its core competitiveness is a set of human resource system that he has created and can stimulate the creativity, enthusiasm and enthusiasm of employees. This is what Haidilao has explored and tried, and is unique to the catering industry.

But this kind of business logic also has disadvantages. In terms of taste, more and more evaluation of Haidilao focuses on "average taste", "not bad taste" and so on, basically losing the core competitiveness of the catering industry. As of June 18, Hong Kong shares closed at HK $39.5, with a total market value of 209.4 billion. Compared with February 15 this year, the share price of Haidilao rose to HK $85.8, with a total market value of over HK $450 billion. In just four months, its market value evaporated to over HK $240 billion.

Rely on service to break through the siege

Sichuan is never short of delicious food, and the success of Haidilao is no accident.

As a "chuanwazi" born at the bottom, Zhang Yong worked in a tractor factory in the early years. Later, he traveled south and north to find business opportunities and opened a hot pot shop. For business, Zhang Yong has his own unique views.

Zhang Yong bet his treasure on "service". Haidilao's widely spread services in the industry include helping people with children, carrying bags and shoeshine. All the customers' needs are met one by one. The guest complained that drinking hurt his stomach, so he cooked a pot of millet porridge. When the guests praised the chili sauce as delicious, they gave them some cans. At that time, many hotels had not established a "sense of service", so Haidilao left a very deep impression on customers. Gradually, thanks to the good reputation brought by the considerate service, Haidilao has become more and more famous, and no customers come to visit.

In addition to the intimate service to customers, Haidilao, after its development and expansion, also cares for its own employees. Zhang Yong advocates making employees feel "home" and "belonging". In terms of life, Haidilao staff dormitory is complete. In terms of salary, Zhang Yong introduces a set of humanized KPI management system. In the pilot stores, every time employees pass a dish, they can get a small round plastic sheet and calculate their income. In this way, every time they receive a customer, they will get a commission. In the same industry, the salary of employees in Haidilao is 10% higher than that in the same industry, and the turnover rate remains below 10%.

Zhang Yong once summed up the core value of Haidilao: "hands change destiny"“ Catering is a completely competitive industry, consumer experience is very important. Customer satisfaction is guaranteed and realized by employees. Therefore, we have established the core concept of "hands changing destiny" to unite our employees. What I want to convey is that as long as we follow the creed of diligence, dedication and integrity, our hands can change something. When employees accept this concept, they will recognize our enterprise and pay for customers from the bottom of their heart. "

When most of the hot pot shops are still in the throes of opening and closing, Haidilao has won by relying on its service. It has become popular all over the country and even opened hot pot shops abroad, such as Singapore and the United States.

Losing the position of "the richest man in Singapore"

In 2018, Haidilao was listed on the Hong Kong stock market, and Zhang Yong's value also went up. In October of that year, Zhang Yong and Shu Ping, two Singaporean couples, with a fortune of 55 billion yuan, ranked 34th in the 2018 Hurun 100 rich list. On August 29, 2019, Forbes Asia magazine released the latest list of the top 50 richest people in Singapore. Zhang Yong topped the list with a net asset of US $13.8 billion (about S $19.2 billion), becoming the new richest man in Singapore.

But in recent months, Haidilao's share price has plummeted, and Zhang Yong has lost his position as "Singapore's richest man".

Haidilao attributed the decline of the stock price to the impact of the epidemic. In March this year, Haidilao released its 2020 financial report, which showed that the company's net profit in 2020 was 309 million yuan, a decrease of 86.8% compared with that in 2019, and its revenue was 28.614 billion yuan, a year-on-year increase of 7.75%. Compared with 2015-2019, the compound growth rate of Haidilao's revenue reached 46.55%, and the growth rate slowed down significantly.

Seabed said that the fishing industry suspended all stores in Chinese mainland from January 26, 2020, and gradually reopened stores in March 12th. In the first half of 2020, it will lose 965 million yuan due to the epidemic situation.

The market generally believed that the impact of the epidemic was the main reason, but it also revealed that Haidilao did not respond enough to the market environment, and even had shortcomings in the management system. After the outbreak last year, the netizens make complaints about the price of dishes, which are much higher than before. Some of the dishes have risen by 5%, and some even exceed 28%. In addition to the "secret" price increase, the repeated exposure of food quality problems, also let the image of Haidilao discount.

In Zhang Yong's plan, making money from Volkswagen stores means expanding more stores. During the epidemic period, Haidilao continued to push forward the store opening plan, and the business expansion led to a sharp increase in costs. Raw materials and consumables increased from 11.239 billion yuan in 2019 to 12.262 billion yuan in 2020, an increase of 9.1%; Staff costs increased by 21.1% from 7.992 billion yuan to 9.677 billion yuan; Depreciation and amortization increased by 60.4% from 1.891.3 billion yuan to 3.034 billion yuan; The financial cost increased from 237 million yuan to 446 million yuan, an increase of 88.2%.

In addition, its property, plant and equipment, that is, all kinds of non current assets, increased rapidly from 7.69 billion yuan in 2019 to 12.064 billion yuan in 2020.

Nowadays, Sichuan style hotpot, Chongqing hotpot, copper hotpot, Chaoshan beef hotpot and fish hotpot are more and more divided, and more and more new hotpot brands are rising in the market. Banu, Dezhuang, shudaxia and other hotpot brands are welcomed with differentiated characteristics. Correspondingly, Haidilao's leading position is threatened, the standardized service mode is attacked, and will the "excessive" service be paid by contemporary young people? The market will give the answer later.