On September 9, HAIDILAO fell 10.54% in regular trading, trading at HK$10.3 per share, with turnover of HK$2.827 billion. The sharp decline was driven by a combination of disappointing interim earnings and a wave of target price cuts from major investment banks.

The company reported H1 revenue of RMB 22.337 billion, up 7.9% year-over-year, but attributable net profit rose only 0.47% to RMB 1.767 billion, essentially flat. Core restaurant revenue declined 4%, with net closure of 32 self-operated stores and same-store sales falling 1.34%. Average spending per customer dropped to RMB 97. Platform-related expenses surged by approximately RMB 400 million, as new business initiatives remained in a phase of growing revenue without contributing profits.

Following the results, Morgan Stanley cut its target price to HK$16.5 and lowered revenue and earnings forecasts by 3% and 5-9% respectively. UBS trimmed its target to HK$16.3, while Bank of America reduced its target to HK$12.3 and cut EPS estimates by 4%. Nomura also lowered its target to HK$17.4. The concentrated downgrades intensified selling pressure on the stock.

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