Restaurant chains report rosy H1 revenues

2023-08-29 08:48:56China Daily Editor : Mo Honge ECNS App Download

Major Chinese restaurant chains and food retailers reported rosy business performances in the first half of the year, with the growth continuing to be on an uptrend in the latter half, fueled by the tourism market, industry observers said.

Quanjude, an iconic traditional Peking roast duck chain, has realized a year-on-year turnaround from three years of losses to profitability. In the first six months, Quanjude reported its sales revenue to be 668 million yuan ($91.5 million), jumping 104.06 percent on a yearly basis.

During the period, its net profit reached 27.9 million yuan, surging 118.28 percent, with earnings nearly rebounding to pre-COVID-19 levels, according to its half-year report.

From 2020 to 2022, the Shenzhen-listed restaurant saw losses for three consecutive years in the first half of those years, as it suffered negative impacts from the pandemic, according to the company.

By the end of June, Quanjude operated 91 restaurants at home and abroad. Its outlets in North China, which account for some 70 percent of its total sales, reported remarkable business performances, with sales reaching 473 million yuan in the first half of this year, it said.

"Since the beginning of this year, with consumers showing higher spending enthusiasm, the release of favorable policies in different regions to support consumption and a boost from holidays and summer vacations, the recovery of the domestic catering sector following the pandemic has been at the forefront," said Zhu Danpeng, an independent food and beverage analyst based in Guangzhou, Guangdong province.

"The catering sector is expected to continue its heat in the second half. With the potential of more events like celebrations and weddings, the sector is likely to embrace another wave of growth," Zhu said.

From January to June, the domestic catering sector achieved sales revenues of 2.43 trillion yuan, up 21.4 percent year-on-year, becoming the consumption category that saw the biggest rebound during the period. In July, nationwide catering revenue reached 427.7 billion yuan, up 15.8 percent on a yearly basis, according to the National Bureau of Statistics.

Meanwhile, Hong Kong-listed Chinese mainland hotpot chain Haidilao projected sales of at least 18.8 billion yuan in the first six months, up 23.7 percent year-on-year, according to its recently released interim estimate.

The company also forecasts a net profit of at least 2.2 billion yuan in the first half, the highest since it went public in 2018, attributing the profit growth to a higher turnover rate, and improvements in internal management and operational efficiency.

Haidilao has also made more efforts in marketing. This summer, it provided several complimentary buses outside concert venues in the evenings in cities such as Changsha, Hunan province, to attract consumers to the restaurants once the concerts ended.

In addition, frozen food retailer Zhengzhou Sanquan Foods Co Ltd achieved sales revenue of 3.86 billion yuan in the first six months, up 0.89 percent year-on-year, and its net profit reached 437 million yuan, up 1.31 percent on a yearly basis, according to its latest half-year earnings report.

The company's main products include frozen noodles and rice, frozen prepared food and refrigerated food with a shorter shelf life. Its first-half revenue in the catering market reached 629 million yuan, jumping 20.47 percent year-on-year. Sanquan Foods attributed the growth to the fast recovery of the domestic catering segment, which significantly drove its sales.

After China optimized its COVID-19 response measures late last year, consumption in the catering sector has rebounded rapidly. The sector is foreseen to continue the upward trend in the latter half of the year, said a research report by Capital Securities.


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