Core Viewpoint - The article discusses the rapid expansion of Haidilao's sub-brands in the competitive restaurant industry, highlighting both successes and failures of various brands under different companies, and emphasizes a shift towards cautious and strategic growth in the face of market challenges [1][19]. Summary by Sections Haidilao's Sub-brands - Haidilao has launched several sub-brands, including "Haini Beef Spicy Hotpot" and "Congqian Yinyuan Claypot Dishes," with plans to open 25 and 1 locations respectively in 2024 [1][2]. - The sub-brand "Yanquan" has opened at least 30 locations since its launch, focusing on grilled meat with a unique offering of "grilled meat + fruit" [4]. - Other sub-brands have been more cautious, with many still in the market validation phase [4]. Industry Trends - The restaurant industry has seen a trend of rapid openings and closures, with many brands failing to establish a sustainable presence [6][10]. - For instance, the tea brand "Chamao" launched by Kudi closed 25 stores, reflecting a high closure rate of 22.32% [7]. - High-end brands like "Nawen Dashi is Chef" have also struggled, leading to their closure within months [11]. Market Challenges - The overall performance of major restaurant brands has declined, with significant drops in same-store sales reported for brands like Taier and Song Hotpot [11]. - Taier's average monthly sales per store fell from approximately 800,000 yuan to 600,000 yuan, indicating a troubling trend for profitability [11]. Strategic Shifts - There is a noticeable shift in strategy among restaurant giants, moving from aggressive sub-brand expansion to more measured and innovative approaches within existing brands [12][19]. - Companies are focusing on micro-innovations and leveraging existing supply chains to reduce costs and improve operational efficiency [17]. - The emphasis is now on understanding consumer needs and maintaining a competitive edge in core areas rather than expanding into numerous sub-brands [19]. Conclusion - The article concludes that the future of the restaurant industry will depend on brands' ability to adapt to market conditions, understand their consumers, and maintain a stronghold in their core competencies [19].

Core Insights - The popularity of hot pot among young people is declining, with many opting for alternatives due to factors like high prices, long wait times, and the emergence of healthier or cheaper options [21][22][35]. Group 1: Hot Pot Preferences - The most popular hot pot base among young people is spicy hot pot, favored by 74.2% of respondents, followed by Chaozhou beef hot pot at 57.5% and tomato hot pot at 40.4% [7][8]. - Preferences vary by age group, with 95s showing a strong preference for spicy hot pot (77.6%), while 00s lean towards tomato hot pot (over 50%) [9][10]. - Regional preferences also play a role, with different cities favoring specific types of hot pot, such as spicy hot pot in Chengdu and tomato hot pot in Suzhou [12][14]. Group 2: Hot Pot Dining Frequency - The frequency of hot pot dining among young people is decreasing, with an average of less than two visits per month, particularly among the younger age groups [24][25]. - The average score for hot pot cravings is lowest among 00s, indicating a generational shift in interest [22][24]. Group 3: Brand Preferences - Haidilao is the most frequented hot pot brand, chosen by 65.6% of respondents, followed by Xiaolongkan at 19.2% and Jiabujia at 18.7% [27][28]. - While taste is the primary factor influencing brand choice (90.2%), other factors like price, freshness, and wait times are becoming increasingly important [30][29]. Group 4: Market Trends - The hot pot market is facing competition from emerging dining trends such as small hot pots, grilled fish, and mala tang, which are gaining popularity due to their lower price points and convenience [40][41][43]. - The number of small hot pot establishments is expected to grow significantly, with a projected annual growth rate of 33.5% [40]. Group 5: Consumer Behavior - Young consumers are becoming more price-sensitive, with over half willing to pay between 100-200 yuan per person for hot pot, and nearly 40% preferring options under 100 yuan [35][36]. - The rise of "one-person meals" and the decline of large group dining indicate a shift in social dining habits among young people [45][56].

Core Insights - The article discusses the evolving preferences of young consumers regarding hot pot, highlighting a shift in taste and dining frequency, as well as the emergence of alternative dining options. Group 1: Hot Pot Preferences - The most popular hot pot base among young people is "spicy hot pot," favored by 74.2% of respondents, followed by "Chaozhou beef hot pot" at 57.5% [2][3] - Different age groups exhibit varying preferences, with 77.6% of post-95s favoring spicy hot pot, while over 50% of post-00s prefer tomato hot pot [5][6] - Regional preferences show that spicy hot pot is most popular in Chengdu, while other cities have their own favorites, such as sour soup hot pot in Guangzhou and tomato hot pot in Suzhou [8][10] Group 2: Hot Pot Ingredients and Dipping Sauces - Beef is the most favored hot pot ingredient, chosen by 86.6% of young consumers, followed by shrimp paste at 57.1% and lamb at 53.0% [11][12] - The most popular dipping sauce is sesame oil, with a 62.8% preference, followed by minced garlic and sesame paste [14][15] Group 3: Dining Frequency and Brand Preferences - Despite a strong interest in hot pot, the frequency of dining out has decreased, with many young people eating hot pot less than twice a month [21][22] - "Haidilao" is the leading hot pot brand, preferred by 65.6% of respondents, indicating its strong market position [23][24] Group 4: Factors Influencing Hot Pot Choices - Key factors influencing hot pot choices include taste (90.2%), freshness of ingredients (60.9%), and price (76.0%), with waiting time also becoming a significant concern [26][27] - Young consumers are increasingly price-sensitive, with over 50% willing to pay between 100-200 yuan per person for hot pot, and nearly 40% preferring options under 100 yuan [32][34] Group 5: Emerging Trends in Dining - The article notes a rise in alternative dining options such as small hot pots, grilled fish, and skewers, with small hot pot establishments growing at a rate of 33.5% [36][37] - The shift towards "one-person meals" reflects changing consumer behavior, as young people seek more affordable and convenient dining experiences [43][55]

Summary of Conference Call Company and Industry - The conference call primarily discusses **Haidilao**, a prominent player in the **hot pot restaurant industry** in China, and the broader **Chinese dining industry**. Key Points and Arguments 1. **Market Environment**: The overall economic environment for the dining industry remains uncertain, yet the hot pot segment continues to show stable growth, maintaining its position as the largest subcategory within Chinese dining [6][7][8]. 2. **Competitive Landscape**: The competition in the restaurant sector has intensified, with a higher rate of store closures compared to openings from 2022 to 2024. This indicates a challenging environment for many players, but established brands like Haidilao are leveraging their supply chain advantages to maintain stability [7][8][9]. 3. **Consumer Trends**: There is a notable increase in the consumption of higher-priced dining options, contradicting the trend of consumption downgrade observed in other sectors. This suggests that consumers are willing to pay a premium for quality dining experiences [10][11]. 4. **Company Performance**: Haidilao has demonstrated strong operational capabilities, with a reported revenue growth rate of 28% and a profit growth rate of 42%. The company remains a leader in the industry despite facing challenges during the pandemic [12][21]. 5. **Strategic Adjustments**: The company is shifting towards a more cautious expansion strategy, focusing on operational efficiency and management refinement. This includes closing underperforming stores and enhancing the management system to ensure better decision-making regarding new openings [13][15][18]. 6. **Future Growth Plans**: Haidilao plans to resume store expansion once operational metrics, such as table turnover rates, reach satisfactory levels. The company is also exploring new brand development opportunities to diversify its offerings [18][20]. 7. **Investment Outlook**: Despite a challenging economic backdrop, Haidilao's core business remains robust, with strong cash flow and a potential dividend payout ratio of 100% in 2024. The company's valuation is expected to have significant upside potential as it resumes expansion and new brand initiatives [21][22]. Other Important Insights - The management team has undergone changes, with a new CEO taking over, which may influence the company's strategic direction and operational focus [15][16]. - The company is implementing a new performance evaluation system that emphasizes operational efficiency and profitability, which could enhance overall performance [14][15]. - The report suggests that Haidilao's valuation could rebound significantly if the company successfully navigates the current challenges and capitalizes on growth opportunities in the future [22].

Investment Rating - The investment rating for the company is "Outperform" [2] Core Viewpoints - The report highlights that Haidilao has successfully navigated through operational challenges and has returned to profitability, achieving record revenue and profit in 2023, thus reaffirming its position as a leader in the Chinese dining sector [5][7][9] - The report discusses the ongoing growth potential of Haidilao's hot pot business and the strategic introduction of new brands under the "Red Pomegranate Plan" to enhance growth avenues [5][8][9] Summary by Sections 01 Hot Pot Market: The Largest Segment in Chinese Cuisine - The hot pot market is projected to exceed 590 billion yuan in 2024, with a CAGR of approximately 7.2% from 2024 to 2028 [6][14] - Sichuan and Chongqing hot pot dominate the market, accounting for over 66% of the segment's revenue in 2023 [6][14] 02 Haidilao: Organizational Evolution and Resurgence - From 2015 to 2023, Haidilao's revenue grew at a CAGR of 28%, and net profit grew at a CAGR of 42%, with 2023 revenue reaching 41.5 billion yuan and net profit at 4.5 billion yuan [7][9] - The company underwent significant organizational restructuring through the "Woodpecker Plan" and "Hard Bone Plan," which helped it recover from previous operational setbacks [7][9] 03 Growth Outlook: Improvement in Same-store Sales and Expansion of New Brands - The report anticipates improvements in same-store sales, with projected table turnover rates increasing from 4.1 to 4.3 times per day from 2024 to 2026 [8] - Haidilao plans to expand its store count to between 1,902 and 1,998 locations over the next five years, with an expected annual net increase of about 65 stores [8] - The new brand "Yanjing Barbecue" is expected to accelerate its development, with projections of adding 50 to 80 new locations annually from 2025 to 2027 [8] 04 Investment Recommendations: A Turning Point in Operations and Valuation - The report forecasts net profits of 45.1 billion yuan, 50.5 billion yuan, and 55.6 billion yuan for 2024 to 2026, reflecting growth rates of 0.4%, 11.8%, and 10.2% respectively [9] - The target price for Haidilao is set at a PE ratio of 16-18x for 2025, corresponding to a market value of 87.8 to 98.7 billion yuan, indicating a potential upside of 12.4% to 26.4% from the latest closing price [9]

Core Insights - The company, Haidilao, increased the number of operating stores during the Chinese New Year period in 2025 due to heightened consumer dining demand [1] - Over the seven days from New Year's Eve to the sixth day of the Lunar New Year, Haidilao served over 10 million customers nationwide [1] - The influx of tourists from heritage tours, inbound travel, and returning home trips contributed to a surge in customer traffic at various Haidilao locations [1] - Local stores in lower-tier markets experienced significant increases in holiday customer traffic due to returning visitors [1]

Investment Rating - The investment rating for the company is "Outperform" [2] Core Insights - The report highlights that Haidilao has successfully navigated through operational challenges and has returned to profitability, achieving record revenue and profit in 2023, reaffirming its position as a leader in the Chinese dining sector [5][7][9] - The report discusses the ongoing growth potential of Haidilao's hot pot business and the strategic introduction of new brands under the "Red Pomegranate Plan" to enhance revenue streams [5][8][9] Summary by Sections 01 Hot Pot Market: The Largest Segment in Chinese Cuisine - The hot pot market is projected to exceed 590 billion yuan in 2024, with a CAGR of approximately 7.2% from 2024 to 2028 [6][14] - Sichuan and Chongqing hot pot dominate the market, accounting for over 66% of the segment's revenue in 2023 [6][14] - The competitive landscape has seen a significant reshuffle, with a stabilization in store openings and closures expected in 2024 [15][17] 02 Haidilao: Organizational Evolution and Resurgence - From 2015 to 2023, Haidilao's revenue grew at a CAGR of 28%, with net profit growing at 42%, reaching 41.5 billion yuan in 2023 [7][36] - The company has implemented significant organizational changes through the "Woodpecker Plan" and "Hard Bone Plan" to enhance operational efficiency and adapt to market conditions [40][45] 03 Growth Outlook: Improvement in Same-Store Sales and Expansion of New Brands - Same-store sales are expected to improve, with projected table turnover rates increasing from 4.0 times per day to 4.3 times by 2026 [8] - The company plans to expand its hot pot outlets to a target of 1,902 to 1,998 stores over the next five years, with an annual net increase of approximately 65 stores [8] - The new brand "Yanjing Barbecue" is set to accelerate its development, with expectations of opening 50 to 80 new locations annually from 2025 to 2027 [8] 04 Investment Recommendations: A Turning Point for Profitability and Valuation - The report forecasts net profits of 45.1 billion yuan, 50.5 billion yuan, and 55.6 billion yuan for 2024, 2025, and 2026, respectively, indicating a stable growth trajectory [9] - The target price for Haidilao is set at a PE ratio of 16-18x for 2025, translating to a market value of 878 to 987 billion yuan, representing a potential upside of 12.4% to 26.4% from the latest closing price [9]

Strategic Partnership - Yili Group and Haidilao Group signed a strategic cooperation agreement on January 6 at the Yili Shanghai Innovation Center [1] - The partnership aims to establish a multi-level and comprehensive communication mechanism [1] - Both companies will leverage their respective resource advantages to deepen cooperation in areas such as brand promotion, market development, business integration, brand co-building, organizational development, and R&D innovation [1]

消息方面，伴随着元旦假期将至，餐饮预订持续火热。以海底捞为例，根据相关数据统计，截至12月26 日，全国海底捞火锅已接到12月31日跨年日的订餐超20万桌，这一预订量大约是平日的5倍以上。 中信证券也指出，临近春节，叠加自上而下不断对内需的重视、政策预期升温，消费有望迎来新一轮反 弹修复。 尽管元旦和春节假期提振市场对于餐饮股的预期，但是高盛研报近期指出，11月餐饮业同店销售额持续 疲软，需求波动。关于政策刺激方面，该行看到更多城市/省份推出了餐饮消费券，但是，该行认为影 响因品牌和地区而异，且该行覆盖的公司普遍尚未看到明显的提振效果。 财联社12月31日讯(编辑 胡家荣) 伴随着元旦假期将至，港股餐饮股多数上涨。截至发稿，海底捞 (06862.HK)、海伦司(09869.HK)、九毛九(09922.HK)分别上涨3.48%、3.27%、2.37%。 此前多地启动新一轮消费券发放活动，加大对餐饮、文旅等消费领域的支持力度。国金证券指出，消费 券发放进一步扩大了活动覆盖对象范围。消费券对餐饮业有直接拉动作用，有利于刺激当地餐饮行业的 消费需求。 11月餐饮业同店销售额持续疲软 该行指，海底捞11月平均翻台率同比 ...

Investment Rating - The report maintains an "Outperform" rating for Haidilao (06862 HK) [3] Core Views - Haidilao's main brand is expected to see improvements in both same-store operations and store expansion in 2025, while its barbecue brand is set to accelerate development [3] - The company has demonstrated strong operational adjustment capabilities in a weak market environment, with same-store sales expected to return to growth in 2025 [3][32] - The "Pomegranate Plan" is expected to drive the rapid expansion of new brands, particularly the barbecue brand, with synergies in supply chain and labor ensuring profitability [3][32] Business Review - Haidilao, founded in 1994, is a leading player in the hotpot and Chinese dining sectors, with a revenue CAGR of 28 0% and a net profit CAGR of 42 0% from 2015 to 2023 [7] - In 2021, the company faced operational challenges due to rapid expansion and the pandemic, leading to a net loss of RMB 4 16 billion, including over RMB 3 65 billion in impairment losses [8] - The "Woodpecker Plan" implemented in November 2021 helped the company turn around, with a net profit of RMB 1 638 billion in 2022 [9] - In 2023, Haidilao achieved record-high revenue of RMB 41 45 billion and net profit of RMB 4 499 billion, with 1,343 stores by mid-2024 [7][15] Growth Outlook Same-Store Operations - Haidilao's same-store operations are expected to improve, with a stable turnover rate and a recovery in average spending per customer [3][22] - The average spending per customer rebounded to around RMB 100 in December 2024, showing a continuous recovery trend [3] - The overall turnover rate reached 4 2 times in mid-2024, close to the 4 8 times in 2019, despite the number of stores doubling to nearly 1,400 [3] Store Expansion - Haidilao is expected to achieve a mid-single-digit percentage increase in net store openings in 2025, with the franchise model contributing additional growth [3][22] - The company has become more aggressive in store expansion, with plans to open 40-50 new stores in the second half of 2024 [3] New Brand Development - The "Pomegranate Plan" focuses on incubating new brands, with the barbecue brand "Yanqing Barbecue" leading the way [3][23] - Yanqing Barbecue, which opened its first store at the end of 2023, had 12 stores nationwide by November 2024, with plans to expand to 100/200 stores by 2025/2026 [3][23] - The single-store model for Yanqing Barbecue is estimated to generate annual revenue of RMB 10 million, with a net profit margin of 12-14% [3][27] Financial Projections - The report forecasts Haidilao's net profit for 2024-2026 to be RMB 4 62/5 12/5 62 billion, with growth rates of 3%/11%/10%, and a dynamic PE of 19/17/15x [3][32] - Under optimistic assumptions, the net profit for 2025-2026 could reach RMB 5 83/7 16 billion, with growth rates of 3%/26%/23%, and a dynamic PE of 15/12x [32]