(Yicai Global) March 24 -- Shares of Haidilao International Holding soared after China’s biggest hotpot restaurant chain said that although it had swung into the red last year, it closed more than 200 poorly performing stores and grew annual revenue by 44 percent.

Haidilao [HKG: 6862] closed 9.4 percent higher at HKD14.48 (USD1.85) today, after earlier climbing by as much as 11.5 percent.

The Beijing-based firm had permanently closed 260 restaurants and temporarily shuttered 32 more as of Dec. 31, it said in its earnings report for 2021 released yesterday. Founder Zhang Yong said previously that its rapid expansion had been too confident.

Haidilao added 308 new restaurants in 2019, 544 in 2020, and 299 in the first half of last year. Along with other restaurant businesses, its eateries ran foul of measures to prevent and control Covid-19.

The food and beverage industry faced great pressure from rising operating costs and raw material prices, said Chief Strategy Officer Zhou Zhaocheng, noting that the firm’s rapid expansion also caused difficulties, as stores in some areas had just a few customers.

“We have high expectations for the recovery and upgrade of consumption once the pandemic control measures are eased” this year, Zhou added.

Revenue jumped to CNY41.1 billion (USD6.4 billion) in the year ended Dec. 31, but Haidilao recorded a net loss of CNY4.2 billion (USD653.4 million), versus a net profit of CNY309.3 million (USD48.5 million) in 2020, due to a huge impairment loss from closing stores. Ninety percent of the loss, or CNY3.7 billion, resulted from the closures, it said.

Last month, the company said it expected to make a loss in the range of CNY3.8 billion to CNY4.5 billion.

“Haidilao’s table turnover rate has risen in recent month,” Chief Executive Yang Lijuan told Yicai Global. “The figure jumped last December from the previous month, so did that in January and February this year.”

Table turnover rate is the average number of times a table is occupied in a restaurant in a day. The higher the rate, the greater a restaurant’s sales.

Haidilao did not provide any future earnings guidance.

Editor: Futura Costaglione