This is an English adaptation of a FoodBud historical article originally published on March 23, 2022.
FoodBud summarized the 2021 annual results released on March 23 by Haidilao, Yihai International and Jiumaojiu Group. The three companies show very different operating stories: Haidilao absorbed heavy losses tied to store closures, Yihai faced gross-margin pressure, and Jiumaojiu’s growth was driven mainly by the expansion of Tai Er Sauerkraut Fish.
Haidilao reported 2021 revenue of RMB 41.1 billion, up 43.7% year on year. Net loss was RMB 4.16 billion, compared with net profit of RMB 310 million in 2020.
Key operating figures:
Restaurant operating revenue reached RMB 39.46 billion, up 43.9%, mainly because of new-store additions and more operating days. However, average spending per guest fell from RMB 110.1 in 2020 to RMB 104.7 in 2021, mainly due to changes in ordering volume per guest.
Across city tiers and both new and existing restaurants in mainland China, average spending per guest and table turnover both declined. For existing restaurants, table turnover fell from 3.7 times in 2020 to 3.0 times in 2021.
Same-store daily sales declined across first-, second-, third- and lower-tier cities in mainland China, as well as overseas markets. Same-store table turnover in third- and lower-tier cities fell below 3.0 times, to 2.7. FoodBud noted that, based on Haidilao’s core store model, table turnover below 3.0 times generally means the store is not profitable.
Haidilao’s other gains and losses widened from a RMB 240 million loss in 2020 to a RMB 3.71 billion loss in 2021, mainly because of store closures.
Yihai International reported 2021 revenue of RMB 5.94 billion, up 10.9% year on year. Gross profit was RMB 1.92 billion, down 7.9%, and net profit was RMB 860 million, down 12.7%.
Revenue by business line:
As of December 31, 2021, Yihai International operated seven flagship stores across platforms including Tmall, JD.com and Pinduoduo. Full-year e-commerce channel revenue was RMB 320 million, up 11.8%.
Sales to related parties, Haidilao and Shuhai, reached RMB 1.94 billion, up 35.9%, accounting for 32.6% of total revenue.
Yihai’s product portfolio included 65 hotpot base products, 65 Chinese compound seasoning products and 36 convenient ready-to-eat food products.
Hotpot base products accounted for 60.7% of 2021 revenue, while convenient ready-to-eat food accounted for 28.7%.
The average selling price per kilogram for hotpot bases declined in both third-party and related-party channels, falling overall from RMB 26,000 per kilogram in 2020 to RMB 24,000 per kilogram in 2021. Revenue from third-party hotpot base sales declined 0.5%, mainly because upgrades to legacy products and development of new products did not progress as expected.
Convenient ready-to-eat products, including self-heating mini hotpot, self-heating rice noodles, instant vermicelli and dry mixed rice, generated most of their sales from third parties, which accounted for 93% of revenue in the category.
By region, South China accounted for 52.9% of sales in 2021.
Overall gross margin was 32.4%. Gross margins for hotpot bases, Chinese compound seasoning and convenient ready-to-eat food were 36.2%, 34.4% and 27.3%, respectively. Margins declined versus 2020, mainly due to higher prices for oil and fat-related raw materials, a higher share of lower-margin related-party sales, and a higher revenue contribution from convenient ready-to-eat food.
As of December 31, 2021, Jiumaojiu Group operated 453 directly managed restaurants and managed 17 franchised restaurants across 85 cities in China, one city in Canada and one city in Singapore.
The group reported 2021 revenue of RMB 4.18 billion, up 54% year on year. Net profit was RMB 510 million, up 169.7%. The main drivers were rapid expansion of Tai Er Sauerkraut Fish, whose store count rose from 233 at the end of 2020 to 350 at the end of 2021, and more operating days in 2021 than in 2020.
The group estimated that pandemic-related store suspensions or dine-in restrictions caused RMB 370 million in lost revenue during 2021.
By brand:
Song Hotpot and Lai Meili Grilled Fish were Jiumaojiu’s newer brands. In 2021, Song Hotpot had a table-turnover rate of 2.5 times and average spending of RMB 129 per guest. Lai Meili Grilled Fish had a table-turnover rate of 2.4 times and average spending of RMB 84 per guest.
On a same-store basis, both Jiumaojiu Northwest Cuisine and Tai Er Sauerkraut Fish posted sales growth in 2021.
Jiumaojiu permanently discontinued the Song Cold Pot Skewers brand in November 2021.
Tai Er’s restaurant-level operating profit margin remained strong, rising from 18.5% in 2020 to 21.8% in 2021.
In 2021, Jiumaojiu acquired a nearly 40,000-square-meter land parcel in Guangzhou Nansha to build a multifunctional national supply-chain center. The project’s expected total investment was no less than RMB 500 million. The group also acquired an additional 3% stake in Tai Er for RMB 300 million, increasing its ownership from 85% to 88%.
Note: all forward-looking project investment figures and equity-related figures above are historical disclosures from 2021 annual results.