Hotpot chain Haidilao weighing listing of overseas unit in HK

BEIJING • Haidilao International Holding, China's largest hotpot restaurant chain, is considering a listing of its overseas business in Hong Kong by way of introduction.

In an exchange filing, the Beijing-based company said a spin-off of Super Hi International Holding would position the unit and the parent for growth.

The company has not yet applied to list 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, sources 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 meat and vegetables. Its restaurants offer perks such as snacks, games and free manicures for waiting customers.

Free photo printing services and leather shoe care are also available for diners. 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 in Singapore in 2012. As at the end of last year, Haidilao ran 1,329 stores in mainland China and 114 stores in locations including Hong Kong, Macau, South Korea, Japan, Canada and Britain.

The overseas operations generated about 2.95 billion yuan (S$617 million) in revenue last year, about 7 per cent of the firm'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$158 million) in an initial public offering. Haidilao itself raised about HK$7.6 billion in a first-time share sale in the city two 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 (S$15.5 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 last year. With rising costs in staffing and raw materials, the company's profit growth may stay choppy for the rest of this year, Bloomberg Intelligence analysts Angela Lee and Choo Kai Lin wrote in a report last month.

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