China’s Restaurant Stocks Lose Luster as Dining-Out Demand Fades
- Haidilao, Yum China have lagged Hong Kong’s key stock index
- Analysts are trimming profit, sales expectations for 2024
While China’s food service sector initially benefited from pent-up demand after Covid, it’s now succumbing to a wider macro slowdown as an uncertain job market and property crisis hit consumer sentiment.
Photographer: Qilai Shen/BloombergThis article is for subscribers only.
Chinese consumers are cutting back on dining out, dealing a heavy blow to related shares as investors grow weary over the once-strong sector and its impact on the domestic economy.
Hot pot chain operator Haidilao International Holding Ltd., fast food retailer Yum China Holdings Inc. and tea drinks maker Nayuki Holdings Ltd. have each lost more than 20% since the start of April, lagging behind local equity benchmarks. Analysts attribute the underperformance to weak consumption and are expecting softer earnings and sales this year.