The food and beverage industry was the most impacted and devastated business during the COVID pandemic, costing hundreds of billions of dollars in revenue loss and millions of jobs shuttered across the globe. Haidilao (6862.HK), the most dominant hot pot chain in China with 1,298 stores globally and employing a workforce upwards of 15,000, was not spared from this devastation. But the famous hot pot chain’s losses due to the pandemic was short-lived and was largely confined to the first half of 2020.
During the latter part of 2020, Haidilao saw a full recovery of its overall performance. Sandalwood data indicates a bounce back for the company’s overall daily sales value in late December 2020 to the same period a year ago. Taking a further peak into the regional breakout, we observed the dominant role played by Tier 3 and below cities towards such recovery with robust double-digit growth at +66% y/y, while Tier 1 and Tier 2 cities experience negative and mild growth rate at -10% y/y and +2% y/y respectively.