Consumer Staples Author：Yifei Liu Editor：Hu Bi Jul 12, 2022 05:24 PM (GMT+8)

Haidilao will have a third listed company after divesting the overseas business.

Haidilao hot pot brand logo

Haidilao (Chinese: 海底捞, 06862:HK) announced on July 11 that it is considering the possibility of divesting the shares of Super Hi, which together with its subsidiaries are mainly engaged in the food and beverage business outside of Greater China, by way of a distribution in specie and a separate listing on the Main Board of the Hong Kong Stock Exchange by way of introduction.

According to the announcement, Super Hi plans to adopt the "distribution in specie + introduction listing" approach. A "distribution in specie" means that Super Hi will distribute its shares directly to existing shareholders, and an "introductory listing" means that no new shares will be issued and no financing will be raised. 

Haidilao has a history of spinning off mature businesses to reduce the financial burden and complexity of the company. In 2014, Haidilao spun off its base supply chain business. This business was injected into the overseas-listed leading company through a series of company creation and equity operations. This made Haidilao, which was in the midst of expansion at the time, lighter in assets. The spun-off Yihai International gained access to more external customers and raised more capital in the public market.

Now that the divestment of its overseas business is on the horizon, Haidilao will become lighter, hopefully providing management with more opportunities for change. But Haidilao still needs to continue to shift its mindset and re-examine this popular business.

The firm's competitors include Mongolian hotpot (Chinese: 小肥羊) and Xiaolongkan (Chinese: 小龙坎).

As of press time, the company closed at HKD 15.64 apiece with a market cap of HKD 87.2 billion.