Hotpot stocks slide after Hong Kong family confirmed to have coronavirus

The slide in hotpot stock prices came after the South China Morning Post reported on Sunday that nine members of the same Hong Kong family contracted the corona virus after sharing a hotpot and barbecue meal at a restaurant.
The slide in hotpot stock prices came after the South China Morning Post reported on Sunday that nine members of the same Hong Kong family contracted the corona virus after sharing a hotpot and barbecue meal at a restaurant. PHOTO: AFP

HONG KONG (BLOOMBERG)- Chinese hotpot stocks skidded in Hong Kong on Monday (Feb 10) after members of the same family who shared a large dinner in January were confirmed to have the coronavirus.

Xiabuxiabu Catering Management China, a major hotpot restaurant operator, fell as much as 8.3 per cent before closing down 7.1 per cent.

Haidilao International ended 4.8 per cent lower, while Yihai International, which makes seasonings and sauce products for hotpot, dropped 2.7 per cent.

"In general, restaurant business during virus outbreak suffers," Hao Hong, head of research at Bocom International, told CNBC in an e-mail.

"In the Guangdong province, 97 per cent of restaurant businesses reported greater than 50 per cent drop in revenue and one-third reported zero revenue."

"The situation is grave," he said. "Haidilao, despite being a strong company in the sector, is suffering along."

Haidilao, whose founder Zhang Yong is Singapore's richest person, has closed all its hotpot restaurants in mainland China stores while keeping them open in Hong Kong.

The stock slide came after the South China Morning Post reported on Sunday that nine members of the same Hong Kong family contracted the virus after sharing a hotpot and barbecue meal at a restaurant called the Lento Party Room.

Hotpot is a popular Chinese cuisine in which food is cooked in a communal bowl.

 
 

The hotpot sector was a strong spot for Hong Kong's struggling stock market in 2019.

Yihai was one of the best-performing stocks on the Hang Seng Composite Index last year with a 139 per cent surge, while Haidilao rose 82 per cent.

Both are near 2019's closing levels, while Xiabuxiabu has skidded 22 per cent this year, making it one of the index's biggest decliners.