Core Viewpoint - The company, Xiaobuxiang, known as the "first hot pot stock," has issued a profit warning, projecting an 18.9% year-on-year decline in revenue for the first half of 2025, amounting to approximately 1.9 billion yuan, with net losses narrowing to between 80 million and 100 million yuan [2][3]. Financial Performance - For the first half of 2025, Xiaobuxiang expects revenue of about 1.9 billion yuan, a decrease of 18.9% year-on-year, while net losses are projected to be between 80 million and 100 million yuan, a significant reduction from a loss of 274 million yuan in the same period last year, representing a narrowing of 63.2% to 70.5% [3]. - Cumulatively, from 2021 to 2024, the company has reported net losses of 293 million yuan, 353 million yuan, 199 million yuan, and 401 million yuan, totaling approximately 1.326 billion yuan in losses over the years [3][4]. Brand and Market Position - The high-end sub-brand "Coucou," launched in 2016, has been a significant contributor to losses, accounting for nearly 90% of the company's overall losses in 2024, with a revenue drop of 26% to 1.948 billion yuan and a net loss of 353 million yuan [8]. - The company's main brand, Xiaobuxiang, has struggled with a price increase strategy that has alienated both high-end and price-sensitive consumers, leading to a decline in customer attraction and operational efficiency [8][10]. Store Operations - The company has been undergoing a significant store reduction, with the total number of restaurants dropping to below 1,000 by the end of 2024, a net decrease of 133 stores from 2023 [5]. - Same-store sales have also declined, with a 23.3% drop for the Xiaobuxiang brand and a 32% drop for the Coucou brand in 2024, indicating weakened profitability of existing stores [5]. Market Response - Xiaobuxiang's stock price has plummeted to 0.77 HKD, categorizing it as a "penny stock" with a total market value of only 800 million HKD, representing a more than 90% decline from its peak [5][10]. - The company is at risk of being delisted if its stock price remains below 1 HKD, highlighting the precarious position it faces in the capital market [5]. Strategic Initiatives - In response to ongoing challenges, the company has initiated a "Phoenix Nest" partner program to recruit new store partners from within its workforce and the restaurant industry, aiming to open 50 to 100 new partner stores annually [10]. - The company plans to leverage digital transformation to enhance supply chain efficiency and service experience, while also focusing on product innovation and brand building to better connect with target customer groups [10].
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