BRIEF: Jiumaojiu profit plunges on intensifying competition
Restaurant operator Jiumaojiu International Holdings Ltd. (9922.HK) said on Monday it expects to report its profit tumbled 89% in 2024 to 50 million yuan ($688.7 million) or more, from 454 million yuan in 2023, while its revenue was roughly unchanged at about 6.07 billion yuan.
The company blamed the profit plunge on intensified competition in the restaurant market, which resulted in falling same-store sales. At the same time, it also recorded losses and impairments of 135 million yuan due to store closures. Lastly, it also suffered from a decrease in government subsidies and value-added tax deductions last year, as well as an increase in foreign exchange losses.
To cope with an increasingly difficult environment, the company emphasized that it will more carefully evaluate store opening plans, implement store operation improvement strategies, further improve the operational efficiency of its supply chain, and improve quality and reduce costs through IT empowerment.
Shares of Jiumaojiu opened down 3% at HK$2.99 on Tuesday, but later reversed course and were up slightly late in the morning session. The shares are down nearly 50% from their high over the past six months.
By Lau Chi Hang
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