Haidilao Expects NP to Exceed CNY 4.4 Billion in 2023, with Substantial Revenue Growth

On the evening of February 20, Haidilao(6862:HK) issued a positive profit forecast, stating that the expected annual revenue from continuing operations as of December 31, 2023, is projected to be no less than CNY 41.4 billion, with an increase of no less than 33.3% (based on CNY 31.04 billion, excluding revenue from Super Hi); the recorded net profit from continuing operations is expected to be no less than CNY 4.4 billion.

Regarding the substantial growth in revenue and net profit in 2023, Haidilao explained in the announcement that the revenue growth was mainly due to the increase in customer flow at Haidilao restaurants as pandemic-related control measures were lifted and the economy recovered, leading to improved operational performance. The substantial increase in net profit was attributed to the improved table turnover rate at Haidilao restaurants and operational sales enhancements.

This announcement marks the first annual performance forecast issued by Haidilao after the completion of the overseas business spin-off listing.

On December 30, 2022, Super Hi Holding Ltd. (09658:HK) was officially listed on the Hong Kong Stock Exchange at an issue price of HKD 7. Super Hi mainly serves the international market for Haidilao hotpot. The company and its subsidiaries are mainly engaged in restaurant operations, takeout, hotpot base product, and food ingredient sales. Public information shows that Super Hi operates approximately 103 restaurants in over 11 countries and regions across four continents, including Singapore, Thailand, Vietnam, Malaysia, Indonesia, Japan, South Korea, the United States, Canada, the United Kingdom, and Australia. Signature dishes provided by Super Hi include spicy Sichuan hotpot base and ramen, and the services offered include birthday celebrations at all its restaurants.

According to Haidilao's 2023 interim report, in the first half of 2023, Haidilao recorded revenue of approximately CNY 18.89 billion, a 24.6% increase from the same period in 2022, which was CNY 15.16 billion; the net profit was approximately CNY 2.26 billion, a substantial increase of 3025.8% year-on-year. Using this as a benchmark, Haidilao's revenue for the second half of 2023 is expected to be no less than CNY 22.51 billion, with a net profit of no less than CNY 2.14 billion.

However, according to Haidilao's announcement, the net profit for the first and second half of 2023 was affected by exchange rate fluctuations. In the first half of 2023, there was a net exchange gain of approximately CNY 192 million, while in the second half of 2023, there was a net exchange loss. Excluding the impact of exchange gains and losses, the expected increase in net profit for the second half of 2023 compared to the first half is no less than 10.0%. In other words, excluding the impact of exchange rates, Haidilao's net profit for the second half of 2023 is expected to be no less than CNY 2.48 billion.

In the first half of 2023, Haidilao opened 5 new stores, resumed operations for 24 previously closed stores, and closed 18 underperforming restaurants. As of the end of June 2023, Haidilao operated a total of 1382 stores, with 1360 located in mainland China and 22 in the Hong Kong, Macao, and Taiwan regions.

Meanwhile, constrained by the decrease in average customer spending in first and second-tier cities, Haidilao's overall average customer spending decreased from CNY 105 in the first half of 2022 to CNY 102.9 in the first half of 2023. Specifically, in mainland China, it decreased from CNY 103.5 to CNY 100.9, while in the Hong Kong and Taiwan regions, it increased from CNY 194.6 to CNY 205.5.

At the time of writing, Haidilao's stock was trading at HKD 14.30 per share, with a market value of approximately CNY 79.708 billion; Super Hi's stock was trading at HKD 9.57 per share, with a market value of approximately CNY 5.927 billion.