Revenue Declines, Losses Narrow: The Stock Game Behind Xiabu Xiabu (00520)'s “Active Slimming”

As the restaurant industry enters a transition period of stock games, the established hot pot giant Xiabuxiabu (00520) is looking for a new way out, according to Ying Guang's prediction.

Recently, Xiabu Xiabu released its performance forecast for the first half of 2026: revenue is expected to be about 1.5 billion yuan (RMB, same below), down 23% year on year; however, net loss narrowed to 29 million yuan to 39 million yuan, a sharp decrease of 51% to 64% compared to the loss of 81 million yuan in the same period last year. The double-digit decline in revenue while losses narrowed. This “divergence” in performance is the epitome of Xiabu Xiabu taking the initiative to promote structural optimization of stores and bid farewell to the era of extensive expansion.

Under the haze of losing money for many years, can Xiabu Xiabu successfully reverse losses through “subtraction”?

The “subtraction” logic behind the effect of reducing losses

The Zhitong Finance App notes that in recent years, Xiabu Xiabu's performance has continued to fluctuate. In terms of revenue scale, although based on the strong recovery of the restaurant industry after the pandemic, the company's revenue performance rebounded for a short time, but over a longer period of time, the company's revenue fell from a high of 6.147 billion yuan in 2021 to 3,789 billion yuan in 2025, and the revenue scale was reduced by nearly 40% in five years. Among them, revenue in 2024 and 2025 declined by 19.65% and 20.32%, respectively. The sharp decline for two consecutive years indicates that market demand or company operations have faced continuous challenges.

Also, judging from net profit performance, the company has been in a state of loss since the first annual loss occurred in 2021. Although the company's loss in 2025 narrowed from 398 million yuan in 2024 to 296 million yuan, how to reverse the continuous loss situation and stop the decline in revenue is still the biggest challenge it faces.

The core of Xiabuxiabu's “loss reduction” in the first half of 2026 was that management finally began to reallocate resources according to economic results. Throughout 2025, the Group opened 57 new stores, closed 109, and the number of stores decreased by 52. Among them, the high-end brand Minato had a net decrease of 53. It is worth mentioning that there was only a net decrease of 2 during the Xiabuxiabu period, which is positioned as a popular small hot pot brand. This contraction strategy continued in the first half of 2026. The company stated in the latest profit warning that asset impairment losses accrued for closed and continuing loss restaurants are expected to be reduced by about 30% over the same period last year.

This strategy of “subtracting” in stores marks Xiabuxiabu's farewell to large-scale worship and a shift to refined management. In fact, this trend has been agreed upon throughout the leading hot pot industry. Haidilao, which is also a leading company in the industry, also shut down or relocated 85 stores in 2025 that did not meet expectations. As the industry shifts from scale orientation to efficiency orientation, closing stores is no longer a passive stop-loss for failed expansion, but an active attack to maintain profit quality. As far as Xiabu Xiabu is concerned, removing inefficient stores not only sheds the burden of losses, but also enables the “lightweight implementation” of financial statements.

Structural dilemmas need to be solved

If closing stores and reducing losses is a cure, then the continued weakness of its core brands, especially Minato Minato, is a persistent structural problem that Xiabuxiabu must face.

The Zhitong Finance App learned that in 2016, in order to explore new business growth, the company officially launched the high-end brand “Minato”, pioneered a new model of hot pot+tea, which complements the differences with the Xiabuxiabu brand. The per capita consumer price of Minato Minato was 2-3 times that of Xiabu Xiabu. At the time, the higher customer unit price not only did not hinder the expansion of the pool, but instead drove it to achieve an ideal turnover rate, making it the main revenue driver for Xiabuxabu, paving the way for high-end plans after Xiabuxabu.

As the second growth curve in the past, Minato has become a “heavy burden” on the Group's development as Minato's turnover rate and same-store sales growth rate continues to experience “cold” in recent years.

Judging from performance, in 2025, the Minato Minato brand revenue was drastically reduced by 30.8%, and operating losses reached 252 million yuan. In comparison, although the revenue of the Xiabuxiabu brand fell 13.3% during the period, the division successfully achieved a profit of 16.648 million yuan. It can be seen that rounding up brands has become the biggest variable that has dragged down the Group's overall performance.

At a time when the trend of consumer classification is intensifying, the rounded up position has the embarrassment of “high or low”. The customer unit price remains at 148.8 yuan in the middle and high-end, but in the face of consumers' increasingly rational decisions, it is unable to provide the ultimate service experience in the Haidilao style, and also falls short of emerging affordable hot pot in terms of cost performance, which in turn has led to a decline in both the turnover rate and same-store sales. According to financial reports, the round-up rate declined further from 1.6 times in 2024 to 1.4 times in 2025, in stark contrast to the 2.8 times turnover rate of Xiabuxiabu.

Seek a way to break the game

Under the heavy pressure of stock competition, Xiabu Xiabu is not sitting back and trying to optimize performance through various strategies such as digging deeper into the supply chain and speeding up the layout of affordable sub-brands while “doing subtraction” on scale.

From a supply chain perspective, Xiabuxabu does have a certain moat. In 2026, the Group put into operation a fresh meat production line in Tongliao, Inner Mongolia, to achieve same-day slaughter and delivery of fresh beef. The Zhitong Finance App learned that after fresh beef was launched, the product order rate increased by 33%. This not only enhances product competitiveness, but also reduces the marginal cost of multi-brand operations through supply chain reuse. The company said that this integrated supply chain, from procurement to logistics, is a core barrier to multi-brand collaborative combat.

However, in response to Minato's stall in the high-end market, the company switched hands and launched two new business formats, “Xiabu Ranch” and “Steak Steak.” The former focuses on small hot pot of your choice starting at 29.8 yuan, entering a lightweight and cost-effective one-person food circuit; the latter uses the “100 yuan steak+158 free dishes to eat” model to fill the gap in the Western food buffet market. This multi-category matrix layout aims to cover all prices and scenarios, superimpose group member communication and traffic sharing, and maximize large-scale effects.

However, it is important to note that exploring new business formats is not an easy path. Although multiple brands can cover more scenarios, they also place higher demands on the company's supply chain, R&D, and organizational collaboration. Currently, “Steak Steak” is still in the refinement stage of the single-store model. Whether it can achieve the goal of Baijiatuo Restaurant within three years will still take time to test.

In fact, the fluctuating performance of Xiabuxiabu reflects the epitome of the transformation period of China's catering industry. According to data from the National Bureau of Statistics, in the first half of 2026, the country's food and beverage revenue was 2825.5 billion yuan, and the growth rate has declined to 2.8%. It can be seen that as the industry enters a new stage of structural restructuring and accelerated differentiation, consumers are no longer willing to pay premiums for overpackaged environments and complex services, but are instead pursuing a stable, convenient, and price-transparent dining experience.

So after the inefficient stores are removed, can Xiabu Xiabu establish a sustainable single-store return model? The historical burden of losing money for five years in a row, and the ongoing profit difficulties faced by the Minato Minato brand are business challenges that management cannot avoid. Furthermore, in the stock market, there is also uncertainty as to whether the new brand can truly stand out.

He Guangqi, founder of Xiabuxiabu, once said, “There are no shortcuts in the catering industry. Only by doing a solid job in cost control, user management, and product innovation can we get through the cycle.” After experiencing the pain of extensive expansion, Xiabuxiabu is recalculating the value of each store. This “loss reduction” report card is an active trade-off for high-quality development, but the established hot pot giant still has a long way to go before it actually completely turns losses into profits.