The drama of the departure of senior executives and the collapse of stock prices has been staged twice in a row.

On April 16, the sub-brand cobbled together CEO Zhang Zhenwei to leave, and the company's market value lost HK $2.1 billion on the next trading day. On May 21, the company's CEO, Zhao Yi, was ousted, and the company's share price fell 14.97%, reducing its market capitalization by HK $1.9 billion.

Behind the departure of the two core executives isThe company is caught in a vicious circle of opening stores.There are more and more stores, and by the end of last year, the number of stores has exceeded 1200. However, business efficiency has lagged behind, key indicators such as the turnover rate have declined year after year, and the company's profitability has continued to decline, and its performance has dropped by nearly 40% in 2019. If you want to grow, you have to continue to open stores.

The catering industry was the first to bear the brunt of the epidemic in 2020, and the "natural disaster" aggravated the "man-made disaster". The company cut expenditure by cutting employees' salaries and made a net profit of only 1.837 million yuan.

After the hollowing out of senior executives, the founder he Guangqi took over the power himself, can he reverse the long-term decline?

Management hollowing out

00520.HK in the midst of adversity, and then meet the great adjustment of personnel.

On May 21, the company announced thatAs the performance of several sub-brands fell short of expectations, Zhao Yi was dismissed from her post as chief executive of the company.

Zhao Yi took office at the end of August 2019 and has been in this key position for less than two years.

Zhao Yi had worked for PepsiCo, Unilever, Sony Ericsson and McDonald's and had more than 20 years of accounting, corporate finance and business management experience in multinational companies, the company announced at the time. Before joining the company, she was the CFO of McDonald's North China.

In November 2012, Zhao Yi entered quack feeding as the chief financial officer, experienced the key point of the company's Hong Kong stock listing, and can be regarded as one of the elders.

Seven years later, she was entrusted with the task of leading the sub-brand in xiabuxiabu as CEO. The brand focuses on the young and new generation of consumers, and its positioning is between the main brand and the sub-brand.

In xiabuxiabu tries to cover full-time consumption scenes from brunch, afternoon tea and dinner to late-night canteens in the form of small hot pot + tea + snacks + Kanto cooking + string.

However, after sporadic stores opened in Beijing and Shanghai at the end of 2019, the brand's subsequent expansion was weak-in xiabuxiabu was not even mentioned in the company's 2020 report.

It is worth mentioning that in addition to serving as the chief executive of the company, Zhao Yi is also one of the two executive directors of the company.

After Zhao Yi was dismissed, he Guangqi, the company's founder, actual controller and another executive director, took over as chief executive.

After the news was announced, he Guangqi said in an interview with the media that no one will take over the post of CEO in the short term.

Just a month ago, on April 16, Guayu issued a notice to the public.The sub-brand contributed to CEO Zhang Zhenwei's resignation.

As a gold medal professional manager in the catering industry, Zhang Zhenwei joined Gap feeding in 2014 and led him to start a second business in a mature and stereotyped catering group, and then became the mainstay of the company's business growth.

According to media reports, Zhang Zhenwei, who will start a business after leaving office, still revolves around the hot pot category and has "obtained 150 million yuan of angel investment from the top international capital".

What is the impact of the withdrawal of the two top executives on the company?

On Monday, April 19, the company's share price plummeted 20%, rebounded slightly in intraday trading, and finally closed down 13.78%, wiping out the market capitalization of more than HK $2.1 billion. On May 21, the company's share price fell 14.97% again due to personnel changes, wiping out more than HK $1.9 billion in market value.

In sharp contrast, Haidilao, which has been listed for nearly three years, recently launched an equity incentive worth nearly 6 billion yuan, covering more than 1500 employees, consultants, directors and executives, with an average of 4 million yuan per person.

Opening a shop is caught in a vicious circle

He Guangqi lost his family's jewelry industry. In 1998, he accidentally bumped into Xidan, Beijing, and opened the first small hot pot. It was lukewarm for the first five years and was not gradually accepted until 2003. In 2014, the company logged on to the Hong Kong Stock Exchange and became the "first hot pot stock".

In the first two years after listing, the company experienced a steady period of steady growth in operating income and steady improvement in profitability. At the end of 2015, the company had 552 stores.

In 2016, quack-feeding ended the "steady period" and launched the "Thousand Ten-Ten Plan".By 2020, 1000 hot pot restaurants will be opened with operating income of 10 billion yuan and net profit of 1 billion yuan.

At that time, Haidilao took advantage of the trend of "Haidilao you can't learn" to capture cities and land in the national market, and the momentum of development was not weaker than the "first stock of hot pot" at all.

However, after the frenzied expansion, the operating efficiency of quack-feeding did not keep up. Although the number of stores and operating income increased significantly, the operating indicators such as turnover rate and single-store revenue continued to decline, and fell into a vicious circle of opening stores.

From 2017 to 2019, the total number of stores of the company was 759,934 and 1124 respectively, and the operating income was 3.664 billion yuan, 4.734 billion yuan and 6.03 billion yuan respectively.The net profit is 420 million yuan, 462 million yuan and 288 million yuan respectively.

The already tired breast-feeding will usher in a heavy blow in 2020. The epidemic has affected a variety of industries, with the catering industry bearing the brunt. Quanjude suffered the first loss, and Haidilao's performance dropped by nearly 90%. Even in recent years, it has a strong momentum of 99%, and its net profit has also been reduced by 1/4.

Last year, the operating income was 5.455 billion yuan, down 9.53% from the same period last year, and the net profit was 1.837 million yuan, down 99.36% from the same period last year. The reason why there was no loss was due to cuts in expenses such as employee compensation.

In 2020, the number of stores under its brands increased by 77 to 1201Among them, there are 1061 main brands, a net increase of 39, and a net increase of 38 to 140 sub-brands.

An obvious trend for companies to open stores is the sinking of channels. The third-tier and first-tier cities have become the main growth points of the hot pot restaurant, and the development of the second-tier cities is faster than that of the first-tier cities.

Although the channel has sunk, but the company's major sectors of the customer unit prices are still rising, which is behind the price increases that consumers widely complain about.

The combined force of many factors leads toThe company's turnaround rate continued to decline, with 3.3, 2.8, 2.6 and 2.3 from 2017 to 2020, respectively.

At a time when the main business is difficult, the company launched a wide range of milk tea, condiments and other businesses, trying to find another way.

In recent years, the company actually controls the milk tea brand tea and rice tea under the name of he Guangqi, authorizing to carry out milk tea business. According to the calculation of the authorization fee, the scale of the milk tea business reached 400 million yuan last year.

Since 2016, the company has tried the water to sell seasonings such as hot pot sauces in stores, and the business's revenue has increased by 65% to 148 million yuan in 2020. Qixinbao shows that Jiafu (China) Food Holdings, which is mainly engaged in the condiment business, owns 60% of the company and 40% of he Guangqi.

However, for a super restaurant chain with more than 1200 stores, these businesses can only serve as a weak supplement, and the company's performance ultimately depends on the development of the core catering business.

The stock price has plummeted continuously.

In the first half of last year, catering stocks were full of sorrow and sorrow. In the second half of the year, with the recovery of the industry with effective prevention and control as the background, the share prices of listed companies such as Haidilao, Jiaofu, Jiumaojiu and other listed companies stabilized and rebounded.

In February, the company's share price reached an all-time high of HK $27.15, when the company's market capitalization was close to HK $30 billion.

It can be said thatThe epidemic helped the company mask the continued weakness in its operations.

However, the expected retaliatory consumption did not come, but the catering giants entered an awkward position of cutting meat with a blunt knife.

In the short and medium term, the normalization of prevention and control and the economy is in a period of adjustment, affecting people's food and beverage consumption. In the medium to long term, the epidemic may also change people's eating and consumption habits to some extent, based on the outbreak of food, especially frozen food, since last year.

Capital has begun to vote with its feet. After the stock price soared, what ushered in was a round of ferocious shareholder reduction.

On January 20, Zhao Yi, then CEO, took the lead in reducing her holdings of 1.43 million shares and cashing out HK $26.4 million, opening the curtain of the reduction.

After that, Morgan Stanley sold off its holdings, cashing out at about HK $2 billion, while cornerstone investors Hillhouse Capital cleared its positions and cashed out more than HK $1 billion in 57.72 million shares. Other institutional investors, such as Snow Lake Capital, have also joined in the reduction of their holdings.

Coupled with the recent collapse caused by the departure of the two top executives, the share price has fallen to HK $10 from a peak of HK $27.15 in February.The company's latest market capitalization is HK $10.854 billion, which has lost more than 60% in three months.

The content discussed by investors has changed from "whether Quack can become a company with a market capitalization of hundreds of billions" to "Quack still has a market capitalization of 10 billion."

Therefore, the next stock price pressure is still very great.