Hotpot Chain Haidilao’s Overseas Unit Files for Hong Kong Flotation

What’s new: Chinese hotpot chain Haidilao International Holding Ltd. took a formal step to list its overseas business unit in Hong Kong.

Super Hi International Holding Ltd., which operates Haidilao’s business outside greater China, filed with the Hong Kong stock exchange to float shares in the city by way of introduction, which doesn’t involve new stock issuance or fundraising.

Hong Kong-traded Haidilao announced a plan July 11 to spin off Super Hi as a separate listing. The deal will make Super Hi the third publicly traded company backed by Haidilao’s founder and controlling shareholder Zhang Yong, following Haidilao itself and condiments brand Yihai International Holding.

Super Hi is currently 90% controlled by Haidilao. Zhang and wife Shu Ping will retain a controlling stake in the unit.

Background: Haidilao said a spinoff of Super Hi would position the unit and the parent for growth.

As of July 4, Haidilao operated 103 restaurants outside the Chinese mainland, Hong Kong, Macao and Taiwan. More than half of the overseas outlets are in southeast Asia. Based on 2021 sales, Haidilao is the third-largest Chinese catering company operating in overseas markets, according to the prospectus.

The overseas operations generated about 2.95 billion yuan ($440 million) in revenue last year, equivalent to about 7% of the company’s total, its annual report shows.

But Haidilao’s overseas business suffered greater setbacks during the pandemic than domestic operations. Average daily revenue of the overseas restaurants fell by more than half to $10,000 in 2021 from $28,000 in 2019.

In the first quarter, Super Hi posted 60% growth in revenue to $109 million with a net loss of $280 million. Haidilao said it expects the overseas business to gradually rebound this year as more countries lift pandemic restrictions.

Quick Takes are condensed versions of China-related stories for fast news you can use.

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bob.simison@caixin.com)

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