Fitch downgrades Haidilao

Fitch Ratings said it downgraded Haidilao International Holding Ltd.'s long-term issuer default rating and senior unsecured rating to BBB- from BBB. Fitch also lowered the rating on Haidilao's U.S. dollar senior unsecured notes to BBB- from BBB.

“The downgrade reflects Fitch's expectation that Haidilao's EBITDA will be sustained at a lower level compared with our previous forecast. Haidilao's overexpansion reduced restaurant productivity in 2021, and we expect Haidilao's restaurant productivity to recover starting in 2022, following closures of underperforming restaurants in November and December 2021.However, the recovery may be muted due to weaker consumer sentiment, a highly competitive and fragmented market and short-term disruptions due to Covid-19 outbreaks,” the agency said in a press release.

The outlook is stable.

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