Xiaobu Xiaobu's stock price hits a new low since listing, with losses exceeding 1.5 billion for five consecutive years

On March 9th, “the first listed hot pot chain” Xiabuxiabu (00520.HK) opened lower and continued to decline, with a nearly 17% plunge during trading, breaking below HKD 0.6 per share. Recently, Xiabuxiabu (00520.HK) released its 2025 earnings forecast, indicating that the company expects revenue of approximately 3.8 billion yuan in 2025, a year-on-year decrease of about 20%; net loss of 290 million to 310 million yuan, narrowing from 399.8 million yuan in 2024 by 22.2% to 27.2%, but the five-year cumulative loss has exceeded 1.5 billion yuan.

Persistent Poor Performance, Over 1.5 Billion Yuan Loss in Five Years

Xiabuxiabu’s losses did not happen overnight. Since 2021, the company has been mired in losses, with net profits of -293 million yuan, -353 million yuan, -199.5 million yuan, and -401 million yuan from 2021 to 2024 respectively. Including the expected loss in 2025, the total five-year loss exceeds 1.5 billion yuan. Revenue has shrunk from a peak of 6.147 billion yuan in 2021 to about 3.8 billion yuan in 2025, a decline of over 38%.

Behind the poor performance is the sluggish growth of Xiabuxiabu’s core brands. Its mid-to-high-end brand, Tuo Tuo, had sales of 745 million yuan in the first half of 2025, down 25.8% year-on-year; table turnover rate dropped from 1.6 times in the first half of 2024 to 1.4 times, a decrease of 12.5%, and same-store sales declined by 14.0% year-on-year. The main brand, Xiabuxiabu, also lost its “affordable single-person meal” market due to price band upgrades, falling into an awkward position of “high not reaching, low not settling.”

Store Closures, Cost Reduction, and New Sub-Brands in Parallel

In response to losses, Xiabuxiabu has implemented a series of self-rescue measures. On one hand, the company focuses on regionalized refined operations, orderly closing underperforming and loss-making restaurants. In 2025, the impairment provision for closed and continuously loss-making restaurants decreased significantly by about 51.4% compared to the same period in 2024. As of June 30, 2025, the group operated 937 restaurants worldwide, further reducing from the end of 2024.

On the other hand, Xiabuxiabu accelerates digital transformation by building a supply chain platform to achieve online management of procurement orders, inventory across regions, and restaurant replenishment, improving resource coordination efficiency. Additionally, the company is branching into new sectors, launching new brands “Xiu Niu Steak” and “Xiu Bu Ranch,” creating a multi-category layout covering small hot pots and Western-style buffets. According to plans, “Xiu Niu Steak” will open 100 stores in the next three years, but currently, the brand is still in the cultivation stage, with only the first store opened.

Intensified Market Competition and Declining Consumer Reputation

Xiabuxiabu’s difficulties are closely linked to fierce competition in the hot pot market. In recent years, hot pot has become the largest category in the Chinese dining market, entering a red ocean of stock competition. Various brands have emerged, from high-end Haidilao and Banu to affordable options like Wei La, Yi Wei Beef Hot Pot, and others, making the competition increasingly intense.

Meanwhile, consumer preferences are gradually shifting towards higher cost-performance and better quality dining experiences. However, Xiabuxiabu has frequently faced complaints regarding service quality and food safety. Discussions on social media and complaint platforms highlight issues such as staff shortages, insufficient training, and delays in condiment preparation at some stores due to cost-cutting measures. On the Black Cat Complaint platform, complaints about foreign objects in takeout and dine-in food from Xiabuxiabu are common.

Although Xiabuxiabu has narrowed losses through store closures, digital transformation, and new brand layouts, the ongoing revenue decline still reflects weak growth in its core brands.

Against the backdrop of supply and demand imbalance in the catering industry, Xiabuxiabu’s path to breaking through remains challenging.