A newcomer to the local fast food market EJINSIGHT

The major local fast food operators have cause for concern.

Enter Daai Fun Gwo, a unit of the first-rate hotpot operator Haidilao. The brand quietly set up its first store in Wan Chai about a month ago.

Its inexpensive undercut offer has attracted attention from many Internet users and residents. A chicken and mushroom noodle breakfast was priced at HK $ 15, with an unlimited HK $ 5 refill drink option, by far the cheapest deal one could get over the course of the week. last decade.

A baked rice with pork chops is priced at HK $ 28, about 40% lower than the big three – Maxim, Cafe de Coral, and Fairwood.

Right, Hong Kong consumers known for their price sensitivity are no strangers to the relentless strategy of mainland newcomers, notably Luckin Coffee, now bankrupt after opening more than 4,500 kiosks in a few years in an attempt to challenge the bigger rival Starbucks, which proved unsuccessful.

Still, they can’t help but wonder how Haidilao could finance the expensive rental of Wan Chai Road, and possibly more outlets in Hong Kong in the future.

In fact, Daai Fun Gwo is not listed in Haidilao’s annual report, but a Singapore company register register has shown that it is a subsidiary of Haidilao.

It seems like this new fast food restaurant business in Hong Kong is more of an experience than a central focus.

Time will tell if this new venture will be successful.

As for relative Haidilao, the situation is difficult.

The majority of the group’s outlets are located in China. Haidilao had to suspend most of its outlets on the continent in the first half of last year due to the Covid-19 outbreak, but rebounded strongly and resumed operations in the summer.

Haidilao shares surged and were promoted to the Hang Seng Index earlier this year. Just when everything looked good, his good fortune ran out of steam.

Haidilao said he expects to make a profit of only 100 million yuan in the first half. President Zhang Yong apologized to investors for misinterpreting the impact of the pandemic, and the high costs of opening a large number of new restaurants over the past year have resulted in profits.

Stock prices are currently down 66 percent from the peak.

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