Haidilao hot-pot chain operator eyes global growth after positive US debut

SHANGHAI - Super Hi International Holding, the international operator of China’s popular hot-pot chain Haidilao, is planning to boost its international footprint following a listing in the United States that has been well received.

The company’s American depositary shares are up 7.4 per cent after three sessions in New York, versus a 3.5 per cent drop during the same period of an index tracking Chinese shares listed on the Nasdaq.

Some 70 per cent of net proceeds from the US$53 million (S$71.4 million) initial public offering (IPO) will be tagged to strengthen the company’s brand and expand its network globally, according to the prospectus. The listing in the US gives Super Hi access to a deeper pool of investors, improves liquidity and makes it easier to raise funds abroad in the future.

“Leveraging the more active US stock market compared with Hong Kong helps achieve growth in its overseas business, with a focus on expanding Haidilao’s store network, brand value and image positioning in overseas markets,” said Chanson & Co director Shen Meng.

Super Hi began trading in the US as momentum increases for Chinese firms weighing a listing abroad. There has been optimism that Beijing will increase approvals for companies seeking US IPOs after China’s regulator said in April that it would support overseas listings of tech firms, following two years marked by a drought of blockbuster deals from the sector.

Earlier in May, shares of Zeekr Intelligent Technology Holding, the high-end electric car brand under Zhejiang Geely Holding Group, debuted in New York after an IPO that raised US$441 million, the biggest US listing by a China-based company since 2021. Its shares are up 29 per cent.

Still, mid-to-large offerings by Chinese firms in the US remain scarce. Of the 30 Chinese companies that have listed in the US since 2023, only five raised more than US$50 million.

As at the end of March, Super Hi International operates 119 Haidilao restaurants in 13 countries including Australia, the US, Canada, the UK and the United Arab Emirates. The restaurants, frequently chosen for effusive birthday celebrations in mainland China, hosted 26.7 million guests in 2023, according to the prospectus.

While the US listing adds liquidity to the company’s stock, Super Hi was not in need of additional cash since it does not have borrowings and is profitable, according to Ms Angela HanLee, a Bloomberg Intelligence analyst.

“The Haidilao brand is one of the pioneers among China restaurant brands exploring overseas markets, and it has a proven track record with both earnings improvement and network expansion,” she said. “The company could gain operating leverage and expand its profit margin.” BLOOMBERG