(Yicai) March 28 -- Shares of Xiabuxiabu Catering Management China Holdings rose after the Chinese hotpot chain shrunk its loss by 44 percent last year.

Xiabuxiabu [HKG: 0520] ended 3.9 percent higher at HKD1.59 (20 US cents) a share in Hong Kong today, after earlier surging by as much as 7.8 percent.

The net loss was CNY199 million (USD27.5 million) in the 12 months ended Dec. 31, compared with CNY353 million a year earlier, the Beijing-based firm said in its annual financial report yesterday. Revenue jumped 25 percent to CNY5.9 billion (USD820 million). 

Competition in China’s catering sector was intense last year, especially the hotpot segment. 2023 was Xiabuxiabu’s third straight year in the red. The firm put last year’s loss down to asset impairment as a result of closing unprofitable restaurants. It had previously issued a profit warning, noting that another reason was ongoing deficits at its mid-to-high-end brand Coucou.

Xiabuxiabu closed 99 and opened 131 of its Xiabuxiabu branded restaurants last year while shutting 15 and opening 48 Coucou stores, with seven Chenshao shops also opening.

Xiabuxiabu's table turnover rate rose to 2.6 times from 2 times, while that of Coucou increased to 2 times from 1.9 times. But average spending per head at Xiabuxiabu shrank to CNY62.20 from CNY63.90 (USD8.60 from USD8.80), while that at Coucou narrowed to CNY142.30 from CNY150.90 (USD19.70 from USD20.80).

The Xiabuxiabu brand will continue to focus on market development in East and South China this year, with plans to open at least 100 outlets, the company said.

Coucou’s expansion in second- and third-tier cities will slow temporarily, with more new stores to open in first-tier cities and some relatively developed areas in second-tier cities, Xiabuxiabu noted. This year, Coucou will open three hotpot restaurants in Shanghai, six in the provinces of Jiangsu and Zhejiang, six in Guangdong province, three in Beijing, and eight in other regions.

The market size of China's hotpot industry will likely grow to CNY668.9 billion (USD92.6 billion) by 2025, but the growth rate is expected to fall to 4.3 percent from 10 percent in 2019, according to data from iiMedia Research.

Editor: Martin Kadiev