Chinese Restaurant Operators Slip as Covid-19 Cases Climb
06 July 2022 - 3:25PM
Dow Jones News
By Justina Lee
Shares of Chinese restaurant operators fell on Wednesday amid
renewed lockdown fears after a rise in Covid-19 cases in parts of
the country.
Shares of Yum China Holdings Inc., one of the country's biggest
fast-food restaurant operators, was 6.1% lower at midday, while
hotpot operator Haidilao International Holding Ltd. slipped 5.3%.
Restaurant operator Jiumaojiu International Holdings Ltd. declined
4.2% and Xiabuxiabu Catering Management (China) Holdings Co. was
off 1.5%.
China reported a steep rise in Covid-19 infections in the past
week, with new cases in recent days numbering in the hundreds and
the capital of Shaanxi province going under lockdown.
"New rounds of Covid testing in Shanghai have increased fears of
further lockdowns for China, which would have a ripple effect on
other markets," ANZ analysts said in a research note.
Goldman Sachs late last month cut its 2022-23 earnings forecasts
for Yum China and Haidilao to reflect a more conservative outlook
on same-store-sales recovery and store expansion in the second
half.
Fitch Ratings said in a research note last month that it expects
dining restrictions and sporadic lockdowns throughout China to
weigh on the recovery in dining demand over the coming six to 12
months.
"The sudden and prolonged Covid-19 control measures so far this
year have been more severe than our earlier expectations and the
initial pandemic impact in 2020," Fitch said.
Write to Justina Lee at justina.lee@wsj.com
(END) Dow Jones Newswires
July 06, 2022 01:10 ET (05:10 GMT)
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