Underwater Haibao's Overseas Operations Report Losses in First Half of 2024

Te Hai International Reports Financial Loss in First Half of 2024

Te Hai International, the overseas operating company of the acclaimed Chinese restaurant chain Hai Di Lao, recently released its financial report for the first half of 2024, revealing a shift from profit to loss. Despite aggressive global expansion efforts and an increase in the number of restaurants along with improved table turnover rates, exchange rate fluctuations and escalating operating costs emerged as the primary contributors to the reported losses. Labor costs surged by 17.3%, while rental and related expenses soared by 44.4%. Established in Singapore, Te Hai International is one of the largest Chinese restaurant brands on the international stage, operating a total of 122 restaurants in various regions including newly opened establishments in Southeast Asia, North America, and East Asia as of June 30, 2024.

Key Takeaways

• Te Hai International saw a transition from profit to loss in the first half of 2024, influenced by exchange rate fluctuations and escalating operating costs.
• Labor costs surged by 17.3%, and rental and related expenses increased by 44.4%.
• Hai Di Lao's international operations encompass 122 restaurants, including 5 new establishments in Southeast Asia, 2 in North America, and 1 in East Asia.
• Revenue growth was propelled by optimizing table turnover rates and enhancing customer experiences.
• Based in Singapore, Te Hai International stands as one of the leading international Chinese restaurant brands.

Analysis

Te Hai International's financial losses were primarily driven by exchange rate fluctuations and significant increases in operating costs, particularly evident in the substantial rise in labor and rental expenses. In the short term, these factors may continue to impact its financial performance, particularly if global economic conditions remain unstable. In the long term, cost optimization and the implementation of exchange rate risk management strategies are imperative for the company to regain profitability. Additionally, while its global expansion strategy has augmented market share, it has also imposed additional financial pressures. Both investors and partners may adopt a cautious stance until the company demonstrates stable profitability.

Did You Know?

• Turnover Rate: The turnover rate, in the context of restaurant operations, alludes to the frequency at which a table is occupied and then cleared within a specific timeframe. Efficient management of a higher turnover rate can lead to increased revenue by optimizing seating arrangements and service efficiency.

• Exchange Rate Fluctuations: Fluctuations in exchange rates refer to the variations in the value of one currency relative to another. In the case of Te Hai International, these fluctuations significantly impact financial performance, potentially resulting in losses.

• Labor Costs: Labor costs encompass expenses incurred by a company for employing staff, including salaries, wages, bonuses, and benefits. A surge in labor costs, as seen in Te Hai International's case, directly affects profitability.

The revised version incorporates personal insights, restructured language, and deeper analytical perspectives on both the financial struggles and strategic considerations of Te Hai International.