Soochow Securities has issued a research report maintaining a "Buy" rating on HAIDILAO (06862). The report states that HAIDILAO is the leading hot pot brand in China, with its service operations and supply chain building strong brand barriers, and it offers a dividend yield of 6%. Despite pressure on industry demand, the company is optimizing its single-store operating model and incubating a new brand portfolio, indicating there is still room for future development. The main views of Soochow Securities are as follows.
Recent events on December 31, 2025, and January 1, 2026, saw HAIDILAO hot pot restaurants nationwide cumulatively serve over 4.5 million customers. Post-concert crowds in many locations supported extended peak business hours at some stores on New Year's Eve.
The bank expects that HAIDILAO's overall store turnover rate remained stable year-on-year in November 2025, indicating stable overall operations. The company's turnover rate improved sequentially in the second half compared to the first half, and robust operations are expected to continue in December, the peak season for hot pot.
The company is optimizing store operations to enhance the profitability of its existing store network. As demand in the catering industry continues to face pressure, hot pot brands have generally entered a period of development adjustment. HAIDILAO is driving brand operational efficiency through its "A Different HAIDILAO" strategy, which includes launching themed store formats such as Select stores, Fresh Cut stores, and Late-Night stores, and increasing both seasonal and regular product innovation to support same-store improvements. Simultaneously, cost reduction and efficiency initiatives are expected to drive a recovery in profit margins.
The Pomegranate Plan is incubating new brands. The company launched the Pomegranate Plan to seek new growth drivers. As of June 2025, the plan had incubated 14 catering brands covering categories such as sushi, barbecue, and fried chicken, totaling 126 stores. Among these, the "Yan Qing Barbecue Shop" brand has reached 70 stores. In H1 2025, revenue from other restaurants was RMB 600 million, a year-on-year increase of 227%. The company evaluates and screens entrepreneurial brands, concentrating resources to support promising projects and strengthening multi-brand synergies.
Risks include fluctuations in raw material prices, food safety risks, and intensifying industry competition.
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