New brands to provide new growth drivers. Haidilao's Pomegranate Plan has incubated 14 catering brands with a total of 126 stores. Among them, "YEAH QING BBQ" opened 46 new stores in 1H25, bringing the total number of its stores to 70. Revenue from other restaurants increased by 227% YoY to Rmb597, and its revenue share rose by c.2ppts to c.3%. Interim dividend. Haidilao announced an interim dividend of Rmb0.309 or HK$ 0.338 per share. The dividend payout ratio for 1H25 was 97%. Based on the closing price o ...

Core Insights - The company reported a decline in core operating profit by 14% in H1 2025, with total revenue at 20.7 billion yuan, down 3.7% [1] - The main business of hot pot generated revenue of 18.58 billion yuan, a decrease of 9.0%, accounting for 89.7% of total revenue [1] - The takeaway business saw significant growth, with revenue increasing by 59.6% to 930 million yuan, now representing 4.5% of total revenue [1] Revenue Breakdown - Hot pot main business revenue: 18.58 billion yuan, down 9.0% [1] - Takeaway business revenue: 930 million yuan, up 59.6% [1] - Other restaurant business revenue: 600 million yuan, up 227.0% [1] - Sales of condiments and ingredients: 460 million yuan, up 55.0% [1] - Franchise business revenue: 90.85 million yuan, up 227.0% [1] Same-store Performance - Same-store revenue declined by 9.9%, with a turnover rate of 3.8 times per day, down 9.5% [1] - Overall average spending per customer was 97.9 yuan, up 0.5% [1] - Turnover rates in different city tiers showed slight variations, with first-tier cities at 3.8 times per day, down 0.2 times [1] Store Expansion and Brand Development - As of June 2025, the total number of hot pot stores was 1,363, a net decrease of 5 stores since the beginning of the year [2] - The company is cautiously expanding its hot pot business while actively growing its sub-brands, with a net increase of 46 stores in the barbecue brand [2] - The company operates a total of 14 restaurant brands with 126 locations [2] Profitability and Financial Metrics - Gross margin decreased by 0.8 percentage points due to increased portion sizes to enhance dining experience [2] - Employee compensation as a percentage of revenue increased by 0.5 percentage points, reflecting fixed cost pressures [2] - Net profit margin stood at 8.5%, down 1.0 percentage points [2] Dividend Policy - The company maintained a high cash dividend payout ratio of 95%, distributing 0.309 yuan per share [2]

Core Viewpoint - Haidilao reported a revenue of 20.7 billion yuan for 1H25, a year-on-year decrease of 3.7%, and a net profit of 1.76 billion yuan, down 13.7% year-on-year, indicating challenges in maintaining growth amidst a competitive market [1][2]. Financial Performance - 1H25 revenue breakdown: restaurant operating income was 18.58 billion yuan (down 9.0% YoY), while takeaway business revenue reached 928 million yuan (up 59.6% YoY) [1][2]. - The overall gross margin was 60.2%, a decrease of 0.8 percentage points YoY, influenced by increased material costs [2]. - The net profit margin was 8.5%, down 1.0 percentage points YoY, reflecting short-term operational adjustments impacting profitability [2]. Business Strategy - The company is focusing on scene innovation, dish innovation, and brand innovation, with a cautious approach to expanding the main brand while incubating new brands like "Pomegranate" and "Woodpecker" [1][3]. - As of 1H25, Haidilao operated 1,363 restaurants, with 1,322 self-operated and 41 franchised, and a net addition of 28 franchise stores during the period [3]. Market Position and Future Outlook - The company aims to enhance customer experience through differentiated services and has transformed nearly 30 late-night dining theme stores [1]. - The company expects to optimize same-store sales performance in 2H25 as customer experience improves and base pressure diminishes [1][2]. Profit Forecast and Valuation - The net profit forecasts for 2025-2027 have been revised down by 17.7%, 13.8%, and 10.5% to 4.314 billion yuan, 4.767 billion yuan, and 5.281 billion yuan, respectively [3]. - The target price has been adjusted to 20.92 HKD, based on a 25x PE ratio for 2025 [3].

Event Overview - In H1 2025, the company achieved revenue of 20.703 billion yuan, a decrease of 3.7%, and a net profit attributable to shareholders of 1.759 billion yuan, down 13.7%. The core operating profit was 2.408 billion yuan, down 14.0% [1] - The company plans to distribute an interim dividend of 1.673 billion yuan, equivalent to 0.309 yuan per share, with a payout ratio of 95% [1] Brand Performance - The main brand's table turnover rate declined, with restaurant revenue of 18.580 billion yuan, down 9.0%. The average table turnover rate for self-operated stores was 3.8 times, a decrease of 0.4 times, primarily due to intensified competition in the dining market and changes in consumer demand. The average customer spending was 97.9 yuan, an increase of 0.5% [1] - In H1 2025, the company closed 5 stores while opening 28 (25 self-operated and 3 franchised), resulting in a total of 1,363 stores by the end of June 2025, comprising 1,322 self-operated and 41 franchised stores [1] - The company is focusing on differentiated services through the "Different Haidilao" initiative, which includes themed stores such as specialty product scenes, late-night dining, family interaction, and pet-friendly environments, aiming to improve table turnover rates [1] Multi-Brand Development - In H1 2025, revenue from other restaurant brands was 0.597 billion yuan, an increase of 227.0%. The company operates 14 restaurant brands with a total of 126 stores, including 46 new openings for the Yanjing BBQ brand, bringing the total to 70 stores [1] - Revenue from the takeaway business reached 0.928 billion yuan, up 59.6%, driven by expanding product categories beyond traditional hot pot to include side dishes, mixed rice, and homemade beverages, as well as increased capacity and support from mainstream platforms [1] Cost and Profitability - The core operating profit margin was 11.6%, down 1.4 percentage points. The gross profit margin was 60.2%, a decrease of 0.8 percentage points, mainly due to increased food and material costs to enhance customer experience [2] - Employee cost ratio was 33.8%, up 0.5 percentage points, attributed to a higher proportion of fixed labor costs. Depreciation and amortization expenses accounted for 5.6%, down 0.6 percentage points, while rental and related expenses accounted for 1.0%, up 0.1 percentage points [2] - Other expenses accounted for 5.2%, up 1.1 percentage points, primarily due to increased promotional and support costs related to the takeaway business and more diversified marketing activities [2] Investment Outlook - Given the company's performance in the first half and the overall weak performance of the dining industry, revenue forecasts for 2025-2027 have been adjusted to 43.055 billion, 45.885 billion, and 49.027 billion yuan, respectively. Net profit forecasts for the same period are 4.305 billion, 4.786 billion, and 5.355 billion yuan, respectively [2] - The latest earnings per share (EPS) estimates are 0.77, 0.86, and 0.96 yuan for 2025-2027, with corresponding price-to-earnings (PE) ratios of 18, 16, and 14 times based on the latest stock price [2]

Summary of Haidilao Conference Call Company Overview - **Company**: Haidilao - **Period**: First half of 2025 - **Total Revenue**: 20.703 billion CNY, a decrease of 3.7% year-on-year [2][3] Financial Performance - **Net Profit**: 1.755 billion CNY, down 13.7% year-on-year [3] - **Core Operating Profit**: 2.408 billion CNY, down 15% year-on-year [3] - **Self-operated Restaurant Revenue**: 18.58 billion CNY, accounting for 89.8% of total revenue [8] - **Average Table Turnover Rate**: 3.8 times per day, a decline from the previous year [3] - **Material and Consumable Costs**: 39.8% of revenue, up 0.8 percentage points year-on-year [9] - **Labor Costs**: 33.8% of revenue, up 0.5 percentage points year-on-year [9] - **Total Assets**: 21.115 billion CNY, a decrease of 1.666 billion CNY from the end of 2024 [10] Revenue Breakdown by Region - **First-tier Cities**: 3.161 billion CNY, 17% of total revenue [3] - **Second-tier Cities**: 6.923 billion CNY, 37.3% of total revenue [3] - **Third-tier and Below Cities**: 7.757 billion CNY, 41.8% of total revenue [3] - **Hong Kong, Macau, and Taiwan**: 730 million CNY, 3.9% of total revenue [3] Strategic Initiatives - **Differentiated Services**: Introduction of dedicated customer manager model and themed store renovations to enhance customer experience [2][4] - **Red Pomegranate Plan**: Development of a multi-brand matrix, with 14 other restaurant brands and 126 locations, including Yanching BBQ with nearly 200 million CNY in revenue [5][12] - **Digital Operations**: Implementation of an intelligent management platform to improve operational efficiency and decision-making [2][7] Membership and Franchise Model - **Membership Growth**: Over 200 million members, with initiatives to enhance engagement through updated task systems and cross-industry collaborations [6] - **Franchise Expansion**: 41 franchise stores, utilizing a combination of old and new stores to validate scalability and attract quality franchisees [6] Cost Management - **Raw Material and Consumable Costs**: Increased due to enhanced customer experience initiatives [9] - **Labor Cost Management**: Adjustments made to optimize employee management and control costs in response to new social security policies [20][24] Market Trends and Challenges - **Industry Performance**: Overall restaurant industry growth with challenges in same-store sales for hot pot brands [21][22] - **Consumer Behavior**: Increased demand for differentiated experiences and health-conscious options, with a shift towards online dining [22][23] Future Outlook - **Store Opening Plans**: Anticipation of over 40 new franchise stores in the second half of 2025 [16][17] - **Continued Focus on Digital Transformation**: Ongoing efforts to enhance supply chain and operational efficiency through digital initiatives [20] Conclusion - **Financial Health**: Despite a decline in revenue and profit, the company maintains a strong cash position with 6.017 billion CNY in cash and 5.3 billion CNY in financial products [19] - **Strategic Focus**: Emphasis on customer-centric services, digital transformation, and multi-brand development to navigate competitive pressures and market changes [20][23]

Core Insights - Haidilao reported a revenue of 20.703 billion RMB and a net profit of 1.755 billion RMB for the first half of 2025, indicating challenges in the restaurant industry amid slowing growth and increased competition [1][2]. Financial Summary - Total revenue for the first half of 2025 was 20.703 billion RMB, down from 21.491 billion RMB in 2024, representing a decrease of approximately 3.7% [2]. - Restaurant operating income was 19.177 billion RMB, compared to 20.596 billion RMB in the previous year, reflecting a decline [2]. - The core operating profit was 2.408 billion RMB, down from 2.799 billion RMB in 2024 [2]. - Basic earnings per share were 0.32 RMB, a decrease from 0.38 RMB in the previous year [2]. Industry Context - The overall restaurant industry in China saw a 4.3% year-on-year increase in revenue from January to June, but the growth rate for key enterprises was only 3.6%, with a decline of 0.4% in June [3]. - The China Cuisine Association described the industry's situation as "slowing revenue growth, declining profits, and intensified competition" for the first half of the year [3]. Operational Performance - Haidilao's self-operated restaurant turnover rate was 3.8 times per day, down from 4.2 times in the previous year, with a total customer count of nearly 190 million in the first half of 2025 [5][6]. - The company operated 1,363 restaurants as of mid-2025, an increase from 1,343 in the same period last year, with 1,299 in mainland China and 23 in Hong Kong, Macau, and Taiwan [5][6]. - Haidilao opened 25 new self-operated restaurants and 3 franchise restaurants while closing 33 underperforming locations [5]. Business Highlights - The takeaway business saw a nearly 60% increase in revenue, with "one-person meal" offerings contributing over 55% of takeaway income [6]. - The "Red Pomegranate Plan," launched in August 2024, has been in effect for a year, focusing on incubating internal and external entrepreneurs [7]. - Other restaurant brands under Haidilao, including "Yanjing Barbecue," opened 46 new locations, contributing to a 227% year-on-year increase in "other restaurant income," totaling 597 million RMB [7].

Core Viewpoint - Haidilao's financial performance for the first half of 2025 shows a decline in revenue and profits, indicating challenges in the competitive dining market while also highlighting growth in its second brand and delivery services [1][5][10]. Financial Performance - Total revenue for the first half of 2025 was 20.703 billion RMB, a decrease of 3.7% compared to 2024 [4]. - Core operating profit (non-IFRS) was 2.408 billion RMB, down 14.0% year-on-year [1][4]. - Net profit reached 1.755 billion RMB, reflecting a 13.7% decline from the previous year [1][4]. Restaurant Operations - The overall table turnover rate for self-operated restaurants was 3.8 times per day, with a total customer count of nearly 190 million in the first half of 2025 [6][7]. - The company has closed underperforming restaurants as a strategy to cope with reduced customer traffic [6][7]. - As of June 30, 2025, Haidilao operated 1,363 restaurants, including 1,299 in mainland China and 23 in Hong Kong, Macau, and Taiwan [7]. Brand Expansion and Innovation - Haidilao has launched 126 second brand stores, indicating a focus on diversifying its offerings beyond traditional hotpot [3][8]. - The company has introduced various themed restaurants and products, such as late-night dining options and "one-person meal" delivery services, contributing to a nearly 60% increase in delivery revenue [10][11]. - The "other restaurant income," including second brands, reached 597 million RMB, a significant increase of 227.0% year-on-year [10]. Customer Engagement and Future Strategy - Haidilao has surpassed 200 million members and is expanding member benefits through partnerships with other industries [11]. - The management plans to leverage digital operations and continue diversifying its business strategy, including potential acquisitions of quality assets [11].

Core Insights - The company, Tehai International, reported a revenue of approximately $397 million for the first half of 2025, with a profit attributable to shareholders of $28.35 million, translating to an earnings per share of $0.05 [1] Group 1: Financial Performance - The average table turnover rate for Haidilao restaurants was 3.9 times per day, an increase of 0.1 times compared to the previous year [1] - Same-store revenue grew by 3.0% year-on-year [1] - The operating profit margin at the restaurant level was 6.4%, a decrease of 2.3 percentage points year-on-year, reflecting the company's expected profit-sharing policy and indicating areas for improvement in management precision [1] Group 2: Expansion and Strategy - Tehai International opened 8 new Haidilao restaurants in the first half of 2025 and closed 4 underperforming locations as part of its "Woodpecker Plan" in Southeast Asia and East Asia [1] - As of June 30, 2025, the company operated a total of 126 Haidilao restaurants internationally, with 74 in Southeast Asia, 20 in East Asia, 20 in North America, and 12 in other regions [1] Group 3: Brand Development - The company is steadily advancing its second brand incubation under the "Pomegranate Plan," with other sales revenue reaching $11.5 million, a 25.0% increase from $9.2 million in the same period of 2024 [2] - As of June 30, 2025, Tehai International has opened prototype stores across various categories, including hot pot, barbecue, and fast food, while preparing to offer Chinese, other Asian, and Western fast food options [2]

Core Viewpoint - Haidilao International Holding Ltd. reported a significant decline in net profit for the first half of 2025, indicating challenges in maintaining revenue growth and profitability [1] Financial Performance - Revenue for the first half of 2025 was 20.703 billion yuan, a year-on-year decrease of 3.7% [1] - Net profit fell to 1.755 billion yuan, down 13.7% compared to the previous year [1] - Core operating profit decreased to 2.408 billion yuan, reflecting a 14.0% decline year-on-year [1] - Basic earnings per share were 0.32 yuan, lower than 0.38 yuan in the same period last year [1]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company reported a revenue of 20.703 billion yuan, a decrease of 3.7%, and a net profit attributable to shareholders of 1.759 billion yuan, down 13.7% in H1 2025. The core operating profit was 2.408 billion yuan, a decrease of 14.0%. The company plans to distribute an interim dividend of 1.673 billion yuan, with a payout ratio of 95% [2] - The main brand's table turnover rate has declined, but differentiated services are expected to drive a recovery in turnover rates. The company has implemented the "Different Haidilao" plan to enhance customer experience and introduce themed stores [3] - The company is steadily advancing multi-brand development and focusing on the takeaway business, with takeaway revenue increasing by 59.6% in H1 2025 [4] - The cost-to-revenue ratio has increased, putting pressure on the core operating profit margin, which was 11.6%, down 1.4 percentage points [5] - Due to the company's performance in the first half of the year and the overall weak performance of the restaurant industry, the profit forecast has been revised downwards for 2025-2027 [6] Summary by Sections Financial Performance - In H1 2025, the company achieved a revenue of 20.703 billion yuan, a decrease of 3.7%, and a net profit of 1.759 billion yuan, down 13.7%. The core operating profit was 2.408 billion yuan, a decrease of 14.0% [2] - The company plans to distribute an interim dividend of 1.673 billion yuan, with a payout ratio of 95% [2] Brand and Service Strategy - The main brand's revenue was 18.580 billion yuan, down 9.0%, with an average table turnover rate of 3.8 times, a decrease of 0.4 times. The company has closed 5 stores and opened 28 stores, resulting in a total of 1,363 stores by the end of June 2025 [3] - The company is focusing on differentiated services and has launched the "Different Haidilao" initiative to enhance customer experience [3] Multi-Brand and Takeaway Business - The revenue from other restaurant brands was 0.597 billion yuan, an increase of 227.0%. The company operates 14 restaurant brands with a total of 126 stores [4] - Takeaway revenue reached 0.928 billion yuan, an increase of 59.6%, driven by product diversification and capacity enhancement [4] Cost and Profitability - The core operating profit margin was 11.6%, down 1.4 percentage points, with a gross margin of 60.2%, down 0.8 percentage points [5] - Employee cost ratio increased to 33.8%, and other expenses related to takeaway business have also risen [5] Profit Forecast - The revenue forecasts for 2025-2027 are adjusted to 43.055 billion yuan, 45.885 billion yuan, and 49.027 billion yuan, respectively. The net profit forecasts are adjusted to 4.305 billion yuan, 4.786 billion yuan, and 5.355 billion yuan, respectively [6]