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Net profit loss, large-scale store closures, stock price decline, market value evaporation… Under various adverse factors, the big change of senior management may be a signal for Haidilao to adjust its development strategy.

Haidilao (06862. HK) changed his coach amid doubts.

On the evening of March 1, Haidilao issued a personnel appointment announcement. Zhang Yong resigned as CEO, and Ms. Yang Lijuan, deputy CEO and chief operating officer of the company, was transferred to CEO of the company. Zhang Yong, chairman of the board of directors and former CEO of the company, will continue to serve as chairman of the board of directors and executive director.

Meanwhile, Zhang Yong said that after Yang Lijuan took office, she continued to implement the “woodpecker plan” and deleted and eliminated stores and managers in strict accordance with the financial assessment results. Since the end of last year, Haidilao has closed 300 stores with substandard performance.

A few days ago, Haidilao issued a profit warning. The annual revenue of Haidilao in 2021 is expected to exceed 40 billion yuan, a year-on-year increase of more than 40%. However, the net loss of Haidilao in 2021 is about 3.8 billion yuan to 4.5 billion yuan. This is the first loss of Haidilao since its listing.

It is worth mentioning that in the three years before Haidilao was listed, it has maintained a profitable state every year, with a total of about 4.3 billion yuan in three years. The loss in 2021 will be the sum of the profits of the previous three years.

As of the closing of Hong Kong stocks on March 2, the total market value of Haidilao was only HK $99.44 billion, down 80% from the high of HK $454.475 billion set in February last year, with an evaporation of about HK $350 billion.

Net profit loss, large-scale store closures, stock price decline, market value evaporation… Under various adverse factors, the big change of senior management may be a signal for Haidilao to adjust its development strategy.

In the past, Zhang Yong, the richest man in Singapore, chose to retire in the “submarine period” of fishing at the bottom of the sea, which makes people sigh.

“Blind self-confidence” Zhang Yong delegated power

As early as April 2020, Zhang Yong sent a retirement signal to the outside world.

At that time, Zhang Yong talked about retirement, but in fact he was in high spirits. He said his retirement is only a plan and is expected to take 10 to 15 years to achieve.

After more than a year, unlike most catering enterprises who chose to save food and clothing and control costs, Haidilao chose torrent to expand on a large scale. In 2020, 544 new stores were added, resulting in increased costs during the epidemic.

The rapid expansion did not usher in the retaliatory consumption of hot pot after the epidemic expected by the market. As a result, the profit of Haidilao’s single store was seriously diluted. From 2017 to 2020, the net profits of haidilaoshan store were 4.374 million yuan, 3.539 million yuan, 3.056 million yuan and 239000 yuan respectively.

The expansion of the epidemic bottom reading is one of Zhang Yong’s few decision-making mistakes, but this time, the bottom reading failed, which almost entered the ICU for Haidilao.

In an interview in the middle of last year, Zhang Yong said: “in 2020, I judged that the epidemic would end in 9 cases, but until today, our stores in Taiwan and Singapore are still affected by the epidemic. I was wrong in judging the trend. I made further plans to expand stores in June last year, and now it is really blind.”

From this sentence, the outside world can understand many meanings: in addition to Zhang Yong admitting his mistake, it is very important that Haidilao is a mom and pop shop, and Zhang Yong has absolute voice and decision-making power.

Therefore, Zhang Yong integrates his extremely distinctive individualism into enterprise management, and his performance is not rational. For example, when asked whether Haidilao will maintain sustained growth in performance in the future, Zhang Yong showed a pessimistic attitude: “as the largest shareholder of Haidilao, I don’t have hope.”

Zhang Yong also said, “blind expansion will certainly happen. Once I integrate my current stores, I will expand, because this is my mission. When it is stable, I will charge, when it is unstable, I will stabilize, and when it is stable, I will charge again until the bottom of the sea comes down.”

But Haidilao is not only a mom and pop shop, but also a listed company. The primary task of listed companies is to be responsible to investors.

Obviously, after more than half a year, Zhang Yong chose to retire on the eve of the release of 2021 results. The core point is to delegate power and hand over Haidilao to professional managers.

In fact, Haidilao is a catering company with internet attributes, and its core advantage is to expand by management.

It is the consensus of Internet manufacturers to cultivate second-generation successors. In recent years, Alibaba, jd.com, bytecode and other enterprises have completed the alternation between the new and the old.

As a leading enterprise in the catering industry, Haidilao has brought a more professional and younger senior management team into the decision-making level, which has played a positive role in Haidilao in the reform.

Haidilao enters the era of “guarding rivers and mountains”

If Hailao in Zhang Yong’s era is a “period of fighting rivers and mountains”, now Yang Lijuan is in command, Haidilao has entered a “period of guarding rivers and mountains”.

Zhang Yong also admitted that the success of Haidilao is due to many excellent cadres. Xi’an is the cradle of Haidilao’s excellent cadres, and Yang Lijuan is one of them.

In that year, Haidilao operated its first cross regional store in Xi’an. It continued to lose money for half a year and changed three store managers. It didn’t start to turn the situation around until Yang Xiaoli (Yang Lijuan’s former name), 21, went.

After Haidilao became famous, Yang Lijuan often received calls from headhunting companies to dig her, but she refused, “it’s all an annual salary of more than one million plus shares, not a problem of more money and less money. I told them not to call again. I’m nothing when I leave Haidilao. I won’t leave Haidilao.”

The cooperation between Zhang Yong and Yang Lijuan is considered to be a thousand mile horse meeting bole. Only Yang Lijuan knows that from the grass-roots waiter to the company’s executives, they not only rely on hard work, but also take Haidilao as a sense of belonging of “home”.

When Haidilao was listed in 2018, it was not his wife who struck the gong with Zhang Yong, but Yang Lijuan, then coo.

Today, Yang Lijuan, 43, has become the new CEO of Haidilao. Although she is young, she is also worthy of her name.

Especially in terms of internal management, Yang Lijuan’s previous ability in underwater fishing is obvious to all.

In 2014, Haidilao innovated the management system, the core of which is to “connect interests and lock management”. At the practical level, it is the apprenticeship system and piecework salary. The person in charge of this system