FAST NEWS: Jiumaojiu forecasts eightfold profit jump

The latest: Restaurant operator Jiumaojiu International Holdings Ltd. (9922.HK) announced Thursday that it expects to report its net profit rose more than 800% to 450 million yuan ($62.5 million) or higher last year.

Looking up: The profit surge owed to the expansion of Jiumaojiu’s restaurant network, growth in same-store sales and improvements in its operational efficiency.

Take Note: The company’s revenue growth slowed to 47.6% at 3.11 billion yuan in the second half of the year, down from 51.6% growth in the first half.

Digging Deeper: Founded in 2005, Jiumaojiu transformed from a traditional restaurant operator into a chain business in 2010, initially operating stores under the “Jiu Mao Jiu” brand. In 2015, it established its “Tai Er” brand targeting young diners by focusing on trendy “sauerkraut fish,” and the brand has now become its main revenue source. To drive greater growth, the company announced earlier this month that it will try to expand its Tai Er business using franchise partners in China’s thinly populated, less developed Western regions of Xinjiang and Tibet, as well as in transport hubs like train stations and airports. It also plans to use franchising to enter overseas markets.

Market Reaction: Jiumaojiu shares initially rose 6.7% on Friday, but later gave back most of those gains and closed up 0.4% at HK$5.11 by the midday break. The stock currently trades near the lower end of its 52-week range.

Translation by A. Au

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