Group 1 - The company, "遇见小面," plans to globally offer 97.3645 million H-shares, with 9.7365 million shares available in Hong Kong and 87.628 million shares for international offering, subject to reallocation and the exercise of the over-allotment option [1] - The company operates a network of 451 restaurants in 22 cities in mainland China and 14 in Hong Kong, with 115 new restaurants in preparation [2] - According to Frost & Sullivan, the company ranks as the fourth largest Chinese fast-casual restaurant operator in China with a market share of 0.5% in 2024 [2] Group 2 - The cornerstone investors have agreed to subscribe for approximately $22 million (or about HKD 171 million) of the offered shares, assuming certain conditions are met [3] - If the offer price is set at HKD 6.34 per share, the company expects to receive a net amount of approximately HKD 551.6 million from the global offering [4] - The company plans to allocate approximately 60% of the proceeds to expand its restaurant network and deepen market penetration, with 10% each for upgrading IT capabilities, brand building, strategic investments in upstream food processing, and general corporate purposes [4]

Company Overview - The company operates a Chinese noodle restaurant brand called "Yujian Xiaomian" in mainland China and Hong Kong, with a total of 451 restaurants in 22 cities in mainland China and 14 in Hong Kong as of the last practical date [2] - The company is the fourth largest operator in the Chinese noodle restaurant sector, holding a market share of 0.5% based on total gross merchandise volume for 2024 [2] - The company has a strong growth momentum, with 115 new restaurants in the pre-opening stage [2] Market Context - The Chinese noodle restaurant market is a significant segment of the overall Chinese fast food market, which is projected to have a market share of approximately 29.8% in 2024 [2] - The fast food restaurant market is characterized by standardized operations and efficient, scalable models that provide convenient meal options for consumers [2] - The overall Chinese fast food restaurant market accounts for about 17.6% of the total dining service market in China, with the top five players collectively holding around 3.0% market share in 2024 [2] Financial Performance - The company's revenue increased from RMB 418 million in 2022 to RMB 800.5 million in 2023, and is projected to reach RMB 1.1544 billion in 2024, reflecting a compound annual growth rate (CAGR) of 66.2% [3] - Revenue for the six months ending June 30, 2025, is expected to rise by 33.8% to RMB 703.2 million from RMB 525.7 million for the same period in 2024 [3] - Net profit grew from RMB 45.9 million in 2023 to RMB 60.7 million in 2024, with a significant increase of 95.8% in net profit for the six months ending June 30, 2025, reaching RMB 41.8 million [3] IPO Details - The company plans to conduct a global offering of 97.3645 million H shares from November 27 to December 2, 2025, with a share price range of HKD 5.64 to HKD 7.04 [1] - The offering will allocate 10% for public sale in Hong Kong and 90% for international sale, with an additional 5% for over-allotment [1] - Assuming a share price of HKD 6.34 and no exercise of the over-allotment option, the net proceeds from the global offering are estimated to be approximately HKD 551.6 million, with 60% earmarked for expanding the restaurant network [1]

Company Overview - The company operates a Chinese noodle restaurant brand called "Yujian Xiaomian" in mainland China and Hong Kong, with a total of 451 restaurants in 22 cities in mainland China and 14 in Hong Kong as of the latest available date [2] - The company is the fourth largest operator in the Chinese noodle restaurant sector, holding a market share of 0.5% based on total gross merchandise value for 2024 [2] - The company has a strong growth momentum, with 115 new restaurants in the pre-opening stage [2] Financial Performance - Revenue increased from RMB 418 million in 2022 to RMB 800.5 million in 2023, and is projected to reach RMB 1.1544 billion in 2024, representing a compound annual growth rate (CAGR) of 66.2% [3] - For the six months ending June 30, 2024, revenue was RMB 525.7 million, which further increased by 33.8% to RMB 703.2 million for the same period in 2025 [3] - Net profit rose from RMB 45.9 million in 2023 to RMB 60.7 million in 2024, with a significant increase of 95.8% from RMB 21.4 million for the six months ending June 30, 2024, to RMB 41.8 million for the same period in 2025 [3] Market Position - The Chinese fast food restaurant market, which includes noodle restaurants, is a significant segment of the overall Chinese dining service market, accounting for approximately 17.6% in 2024 [2] - The noodle restaurant market is highly fragmented, with the top five players collectively holding about 3.0% market share based on total gross merchandise value in 2024 [2] - The company ranks thirteenth in the overall Chinese fast food restaurant market with a market share of 0.14% based on total gross merchandise value for 2024 [2] IPO Details - The company plans to conduct a global offering of 97.3645 million H-shares from November 27 to December 2, 2025, with a price range of HKD 5.64 to 7.04 per share [1] - The net proceeds from the global offering are estimated to be approximately HKD 551.6 million, with 60% allocated for expanding the restaurant network and market penetration [1] - The company has secured cornerstone investment agreements totaling approximately USD 22 million from various investors [1]

Investment Rating - The report provides various investment ratings for companies in the consumer staples sector, with "Outperform" ratings for several companies including China Feihe, Haidilao, and China Resources Beer, while Budweiser APAC is rated as "Neutral" [1]. Core Insights - The report highlights significant price increases in vegetables and corrugated paper, with the spot cost index for vegetables rising by 7.08% month-on-month and 16.16% year-on-year, while corrugated paper prices increased by 8.81% month-on-month and 17.49% year-on-year [6][24][27]. - Most spot cost indices for monitored consumer goods have risen, while futures cost indices have generally declined, indicating a mixed outlook for the sector [31]. Summary by Category Beer - The spot cost index for beer decreased by 2.25% month-on-month, with a cumulative decline of 3.04% since the beginning of the year [12][32]. - The futures index also fell by 2.62% month-on-month, reflecting ongoing supply-demand imbalances [12][32]. Condiments - The spot cost index for condiments decreased by 0.95% month-on-month, with a cumulative decline of 3.50% since the start of the year [15][33]. - Soybean prices have shown an increase, with spot prices rising by 1.38% month-on-month [15][33]. Dairy Products - The spot cost index for dairy products increased by 0.74% month-on-month, while the futures index decreased by 1.07% [18][34]. - Fresh milk prices have declined to 3.03 yuan/kg, a year-on-year decrease of 3.2% [18][34]. Instant Noodles - The spot cost index for instant noodles increased by 0.64% month-on-month, while the futures index decreased by 1.47% [21][35]. - Palm oil prices have decreased significantly, impacting production costs [21][35]. Frozen Foods - The spot cost index for frozen foods increased by 0.37% month-on-month, while the futures index rose by 0.52% [24][36]. - Vegetable prices have surged due to adverse weather conditions, contributing to rising costs [24][36]. Soft Drinks - The spot cost index for soft drinks increased by 2.50% month-on-month, while the futures index decreased by 1.70% [27][37]. - The price of PET chips has declined, affecting overall production costs [27][37].

Core Insights - Shanghai's restaurant industry has shown positive growth, with revenue exceeding 16.3 billion yuan, marking a year-on-year increase of 2.1% and a month-on-month increase of 7.0%, the first month of positive year-on-year growth this year [5][11] Industry Trends - The increase in restaurant revenue is attributed to factors such as the National Day holiday and consumption vouchers, alongside evolving consumer demands and intensified competition [5][11] - Restaurants are adapting to market changes by modifying their offerings and business models, such as focusing on lunch services and introducing new menu items to attract customers [7][10] Company Strategies - Long-term establishments like Shanghai Renjia have revitalized their business by selling prime locations for specific dishes, enhancing their lunch service [4] - Haidilao has introduced fresh seafood options, resulting in a 5% to 10% increase in customer visits, indicating a successful adaptation to consumer preferences [4] - The restaurant "Dongfa Dao" has shifted its focus from dinner to lunch, optimizing for speed, convenience, and affordability [7] - "Jiangbian Chengwai" has expanded its menu beyond its signature dish to include various new items, leading to increased customer traffic and sales [8] Market Dynamics - The competitive landscape has prompted restaurants to frequently adjust their offerings, with many establishments reducing their space and focusing on smaller, more efficient models to cope with the growing number of dining options in Shanghai [7][11] - The Longing Dream shopping mall, a key player in the Longing district, has over 200 restaurants and experiences annual sales of approximately 2.5 billion yuan, with 20% to 30% of its tenants changing each year to stay relevant [11]

Summary of Haidilao International Holding Ltd Conference Call Company Overview - **Company**: Haidilao International Holding Ltd - **Industry**: China/Hong Kong Consumer - **Stock Ticker**: 6862.HK - **Market Cap**: RMB 67,320 million - **Current Share Price**: HK$ 13.59 - **Price Target**: HK$ 17.50 (29% upside) [6][9] Key Points Business Performance - **Stabilization**: Haidilao's hotpot business operations are stabilizing and benefiting from a low base [3][4] - **Profit Contribution**: The delivery business and new brands are growth drivers, but their profit contributions remain non-material. The hotpot segment is the major profit contributor [4][3] - **Delivery Revenue Growth**: Accelerated by 60% in Q3 compared to 1H 2025, with average selling prices (ASP) between RMB 30-50 [8] Financial Metrics - **Revenue Projections**: Expected net revenue for 2025 is RMB 42,405 million, with a projected CAGR of 26% from 2025 to 2027 [6][9] - **Earnings Per Share (EPS)**: Projected EPS for 2025 is RMB 0.73, with an increase to RMB 0.94 in 2026 [6] - **EBITDA**: Expected to be RMB 6,963 million in 2025, increasing to RMB 8,523 million in 2026 [6] Market Dynamics - **Macro Factors**: Key risks include macroeconomic conditions, particularly inflation, and external factors like delivery platform price wars affecting dine-in demand [3][11] - **Store Expansion**: Slowed due to weaker-than-expected performance of YEAH Qing, with a revised target of 80+ stores by the end of 2025 [8] Valuation and Risks - **Valuation Methodology**: Target P/E of 17x 2026 earnings, reflecting cautious consumption sentiment amid macro uncertainties [9] - **Upside Risks**: Faster macro recovery, better-than-expected demand, and quicker new store openings could enhance performance [11] - **Downside Risks**: Include raw material cost inflation, delays in new store openings, and potential increases in staff costs affecting service quality [11] Additional Insights - **Table Turn Improvement**: Sequential improvement in table turn year-over-year, with low-single-digit growth observed in October [8] - **New Brand Performance**: Ju Gao Gao, a lower ASP hotpot format, has over 30 stores, with plans for more openings in 2026 [8] This summary encapsulates the essential insights from the conference call regarding Haidilao International Holding Ltd, highlighting its current performance, financial outlook, market dynamics, and associated risks.

Investment Rating - The investment rating for the social services industry is "Positive" (maintained) [1] Core Insights - The report highlights a strong performance in the tourism sector, with Ctrip achieving a revenue of 18.37 billion yuan, a year-on-year increase of 15.5% [17] - The report indicates a structural shift in the toy industry, with a net closure of 9 stores in October 2025, leading to a total of 3,967 stores [29] - The restaurant industry is experiencing a contraction in tea supply while coffee continues to grow, with Haidilao focusing on increasing its takeout sales [36] Summary by Sections Ctrip Performance - Ctrip's Q3 2025 revenue reached 18.37 billion yuan, reflecting a year-on-year growth of 15.5% [17] - The adjusted EBITDA for Ctrip was 6.35 billion yuan, up 11.7% year-on-year [22] - The revenue breakdown shows ticketing, accommodation, vacation, and business travel management growing by 11.6%, 18.3%, 3.1%, and 15.2% respectively [21] Toy Industry - As of October 2025, the number of offline toy stores in China was 3,967, with a net decrease of 9 stores [29] - The average store efficiency for toy brands increased by 10% year-on-year, with top brands like Pop Mart showing significant growth [31] Restaurant Industry - The tea beverage sector is entering a contraction phase, while the coffee sector is accelerating [36] - As of October 2025, the average monthly store efficiency for the tea industry was 212,400 yuan, a 5.8% increase year-on-year [39] - The coffee industry saw a net increase of 5,600 stores, with an average monthly store efficiency of 289,000 yuan, up 1.2% year-on-year [39]

Core Points - The Hang Seng Index Company announced the results of the quarterly review for the Hang Seng Index series as of September 30, 2025, with changes to be implemented after market close on December 5, 2025, and effective from December 8, 2025 [1] Group 1 - Innovent Biologics has been included in the Hang Seng Index [1] - New Hope Energy, Haidilao, and New Oriental Education have been removed from the Hang Seng China Enterprises Index [1]

Core Insights - The dining market is increasingly being targeted by the elderly demographic, with companies like Haidilao adapting their services to cater to this group [1][3][4] - The growth of the silver economy is supported by a significant elderly population in China, with 310 million people aged 60 and above, representing 22% of the total population [8][9] - The silver economy is projected to reach a scale of approximately 7 trillion yuan, accounting for about 6% of GDP, with the dining sector being a core area of focus [9][12] Group 1: Company Strategies - Haidilao has implemented an elder-friendly service system, offering activities and discounts specifically for elderly customers, such as games and special menus [3][4] - Starbucks has seen a notable increase in elderly customers, who not only have high repurchase rates but also comparable spending levels to younger patrons, leading to initiatives like coffee tasting events [4][8] - Fast food chains like McDonald's and KFC are also targeting the elderly market with tailored promotions and menu adaptations [6][8] Group 2: Market Trends - The elderly population's stable consumption ability and willingness to spend are driving the silver economy, with a 245% year-on-year increase in orders from users aged 60 and above on food delivery platforms [9][12] - The dining industry is witnessing a shift towards more inclusive and tailored offerings for the elderly, with community dining options and social engagement becoming key components [19][20] - New dining concepts are emerging that focus on social interaction and community, such as themed tea houses and community restaurants designed for elderly patrons [20][22] Group 3: Challenges and Considerations - The complexity of the elderly consumer group requires more nuanced and long-term operational strategies from dining establishments [15][19] - There is a risk of misperception regarding the elderly market, with some businesses focusing only on seasonal promotions rather than consistent engagement [17][19] - Understanding the social needs of the elderly is crucial, as many prefer leisurely dining experiences over quick service, which can impact restaurant efficiency [13][14]

Investment Rating - The investment rating for Haidilao International Holding Ltd is maintained as "Buy" with a target price of HK$18.50, indicating an expected share price return of 31.5% and an expected total return of 33.3% [4][7]. Core Insights - Haidilao experienced low single-digit year-over-year growth in table-turn in October, showing significant month-over-month improvement compared to a largely flat performance in the third quarter [1][2]. - Management anticipates less pressure on table-turn in the fourth quarter of 2025 due to seasonally cold weather and a low comparison base from the previous year, along with positive momentum expected in the first quarter of 2026 due to a longer Chinese New Year holiday period [1][2]. - The gross profit margin (GPM) improved sequentially in the third quarter of 2025, reaching 60.2%, aided by menu optimization efforts and lower labor costs [3]. - Management plans to terminate several loss-making pilot programs in the first quarter of 2026, which is expected to yield operational expense savings for the full year [3][4]. Summary by Sections Sales Performance - Table-turn growth in October was driven by holiday consumption, effective consumer activation campaigns, and remodeled stores catering to new scenarios such as nightlife and family gatherings [2]. - The average selling price (ASP) for dine-in increased slightly in the third quarter of 2025, attributed to a higher mix of premium items [2]. Store Operations - Haidilao opened 59 new stores and closed approximately 60 stores while transferring over 50 stores to franchisees in the first ten months of 2025 [2]. - Delivery sales grew approximately 100% year-over-year in the third quarter of 2025, with projected delivery sales reaching around RMB 2 billion for the full year [2]. Margin Analysis - The GPM improved sequentially in the third quarter of 2025 compared to the first half of 2025, supported by menu optimization and reduced labor costs [3]. - Despite the improvement, 16 new piloting brands remain loss-making on an aggregate basis, prompting management to consider program terminations [3][4]. Valuation - The target price of HK$18.50 is based on a 12x 2025E EV/adjusted EBITDA, aligning with the trading average of global restaurant peers [7].