(Yicai Global) Feb. 21 -- Shares in Haidilao International Holding tumbled by as much as 6 percent today after the popular Chinese hotpot restaurant chain said that it is bracing for losses of up to CNY4.5 billion (USD711 million) last year due to overaggressive expansion and the ongoing Covid-19 pandemic.

Haidilao’s share price [HKG:6862] was trading down 6.04 percent at HKD18.98 (USD2.43) as of 2:50 p.m. China time, giving it a market capitalization of HKD105.8 billion (USD13.6 billion). It had earlier sunk to HKD18.82.

The hotpot giant was forced to shutter over 300 restaurants, one fifth of its worldwide outlets, last year as recurring outbreaks of Covid-19 affected operations, particularly at its overseas restaurants, the Beijing-based company said in a filing to the Hong Kong bourse today. Too many new stores due to recent rapid expansion also meant that some were not meeting expectations.

This impacted performance results, with the deficit a far cry from 2020’s profit of CNY309.5 million (USD48.9 million), it said. Revenue, though, is expected to jump 40 percent from the year before to CNY40 billion (USD5.1 billion). The company also incurred impairment losses on long-term assets of up to CNY3.9 billion (USD616.5 million) due to restaurants' faltering performance.

Editor: Kim Taylor