[ET Net News Agency, 25 March 2021] Nomura lowered its target price for Haidilao
International (HDL) (06862) to HK$82.6 from HK$89.1 and reiterated its "buy" rating.
The research house believes the major disappointment in HDL's FY2020 results was the 21%
rise in staff cost, with the expense ratio up 3.7pp to 33.8%. This increase was much
higher than Jiumaojiu's (09922) 7% hike.
Nomura highlighted that HDL has adopted a no-layoff strategy and has raised the basic
salary (including piece-rate unit price and base salary levels of employees) of front-line
staff since 3Q 2020. It expects the staff cost ratio to rise to 32.5%/32.3%/31.9% in
FY2021-23. (KL)