Haidilao, a popular Chinese hot pot restaurant chain, said on July 11 that it is considering the possibility of splitting overseas subsidiary Super Hi International Holding Ltd, listing it on the Hong Kong Stock Exchange (HKEx) by way of introduction.
Super Hi and its subsidiaries are principally engaged in catering businesses outside Greater China. The board of directors of Haidilao reportedly believes that this spin-off is in the overall interests of the company. At present, Super Hi has not applied for a listing on the HKEx.
Affected by the pandemic, Haidilao’s performance has continued to be sluggish. According to its 2021 financial report, in the past year, Haidilao’s revenue was 41.11 billion yuan ($6.1 billion) and its loss was 4.16 billion yuan. The firm’s loss is related to its blind expansion in the second half of 2020. In the second half of 2021, Haidilao admitted that it had misjudged the situation before, and its expansion plan was unsuccessful. It therefore decided to close some restaurants and planned to appropriately reduce future capital investments.
According to its financial report in 2021, Haidilao’s overseas business has begun to recover, but its overall proportion is limited. The company’s business income in first-tier cities, second-tier cities, third-tier cities and below, and areas outside the Chinese mainland was 7.728 billion yuan, 14.904 billion yuan, 14.23 billion yuan and 2.722 billion yuan, respectively, up by 30.3%, 32.2%, 74.8% and 22.3% year-on-year, and accounting for 19.52%, 37.65%, 35.95%, 6.88% of the firm’s total income.
By the end of 2021, Haidilao had 114 stores outside the Chinese mainland, compared with the 93 stores in 2020. With increasingly boiling competition in the domestic hot pot market, Haidilao has increased its emphasis on overseas markets.