Hotpot chain Haidilao weighs IPO of overseas unit
HAIDILAO International Holding, China’s largest hotpot restaurant chain, is considering listing of its overseas business in Hong Kong by way of introduction.
In an exchange filing, the Beijing-based company said a spinoff of Super Hi International Holding would position the unit and the parent for growth. The company has not yet applied for the listing of the unit, which operates its business outside greater China, and will announce any further progress, the filing showed.
Haidilao is working with advisers on the potential spin-off and has not finalised details, people familiar with the matter have said. A filing could come as soon as in the next few weeks, one of the sources said.
Founded in 1994, Haidilao is popular for the spicy broth in which diners cook their meats and vegetables. Its restaurants offer perks such as snacks, games and free manicures for waiting customers, according to its website. Free photo printing services and leather shoe care are also available for diners at the stores. For those who order noodles, chefs would make noodles combined with martial arts at the tables.
The company opened its first overseas store in Clarke Quay, Singapore in 2012. Its Los Angeles outlet commenced trial operation a year later. As the end of 2021, Haidilao ran 1,329 stores in mainland China and 114 stores in locations including Hong Kong, Macau, South Korea, Japan, Canada and the UK. The overseas operations generated about 2.95 billion yuan (S$618 million) in revenue last year, equivalent to about 7 per cent of the company’s total, its annual report shows.
Haidilao is no stranger to spinning off its unit for separate listing. In 2016, its condiment subsidiary Yihai International Holding went public in Hong Kong after raising about HK$881 million (S$157.6 million) in an IPO. Haidilao itself raised about HK$7.6 billion in a first-time share sale in the city 2 years later.
Haidilao’s shares have tumbled about 67 per cent in the past year, giving it a market value of about US$11 billion, as China’s Covid Zero approach led to disruptive lockdowns that impacted a wide range of businesses including eateries. The hotpot chain closed 276 outlets in 2021. With rising costs in staffing and raw materials, the company’s profit growth may stay choppy for the rest of 2022, Bloomberg Intelligence analysts Angela Hanlee and Kai Lin Choo wrote in a report last month.
Zhang Yong, the hotpot chain’s co-founder and chairman, has a net worth of about US$3.9 billion, according to the Bloomberg Billionaires Index. He and his wife Shu Ping are the biggest shareholders of the company. BLOOMBERG
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