Core Viewpoint - Haidilao has launched its first "Sugar Water Shop" as a themed store, utilizing a "store within a store" model to cater to the diverse needs of business and young consumers [1] Group 1: Business Model Innovation - The new Sugar Water Shop occupies approximately 72 square meters and features an independent dining area [1] - The shop offers a total of 13 products, including 7 fresh sugar water options and 6 ice cream series sugar water [1] - The initiative aims to upgrade the previously single-function waiting area into an independently operated Sugar Water Shop, serving both hot pot customers and walk-in customers from the mall [1] Group 2: Customer Engagement and Performance - The Sugar Water Shop is designed to attract not only diners but also shoppers and office workers in the vicinity [1] - Currently, the shop maintains an order volume of over 100 orders per day, relying solely on offline customer traffic [1]

Core Viewpoint - The report from Industrial Securities maintains an "overweight" rating for Haidilao (06862), highlighting recent management changes aimed at enhancing operational efficiency and promoting innovative development. The return of the chairman to frontline management is expected to improve execution of diverse strategies, with stable brand operations and a projected revenue increase in the second half of the year [1]. Group 1: Management Changes - The company announced management changes on January 13, with Chairman Zhang Yong appointed as CEO, returning to frontline management. Four young executives have been promoted to executive directors, including Li Nana, Zhu Yinhua, Jiao Defeng, and Zhu Xuanyi, who have all progressed through various roles within the company [1]. Group 2: Operational Performance - The table turnover rate for the first half of 2025 is projected at 3.8 times, with restaurant operating revenue expected to reach 18.58 billion yuan. The company anticipates that the turnover rate in the second half of 2025 will outperform the first half, leading to a narrowing of revenue decline for the year [2]. Group 3: Store Development - The estimated number of Haidilao restaurants for 2025 is 1,372, remaining stable compared to the beginning of the year. The company is actively replacing underperforming stores to enhance overall operational quality. Additionally, the estimated number of the subsidiary brand Yanhui is expected to reach 80, with other brands like Jugaogao and Xiaohai Aizha projected to have 39 and 5 stores, respectively [3]. Group 4: Brand Expansion - Since the second half of 2025, the company has intensified its strategy for subsidiary brand development, launching multiple new brands. Jugaogao, focusing on self-service hot pot, has a customer price point of approximately 60 yuan, with rapid store openings in second-tier cities. The company has also entered the sushi market with its first store opening in Hangzhou in October 2025, priced around 90 yuan. Additionally, the first Haidilao Dapaidang hot pot store opened in Guangzhou in December 2025, with a pricing model based on dishes, targeting group gatherings at around 110 yuan per customer. Xiaohai Aizha continues to expand its offerings with a customer price point of about 30 yuan [4].

Core Viewpoint - The report from Industrial Securities maintains an "overweight" rating for Haidilao (06862), highlighting recent management changes aimed at enhancing operational efficiency and promoting innovative development [1] Group 1: Management Changes - The company announced management changes on January 13, with Chairman Zhang Yong returning to frontline management as CEO [1] - Four young executives have been promoted to executive directors, including Li Nana, Zhu Yinhua, Jiao Defeng, and Zhu Xuanyi, all of whom have significant tenure and experience within the company [1] Group 2: Operational Performance - The table turnover rate for H1 2025 is projected at 3.8 times, with restaurant operating revenue expected to reach 18.58 billion yuan, indicating a recovery in performance for H2 2025 compared to H1 [2] - The company anticipates that the turnover rate in H2 2025 will outperform H1, leading to a narrowing of the revenue decline for the year [2] Group 3: Store Development - The estimated number of Haidilao restaurants for 2025 is 1,372, remaining stable compared to the beginning of the year, with ongoing efforts to improve the quality of existing stores [3] - The company is also actively developing its sub-brands, with an expected 80 stores for the "Yanhui" brand and additional stores for other brands like "Jugaogao" and "Xiaohai Aizha" [3] Group 4: New Brand Initiatives - Since H2 2025, the company has intensified its sub-brand development strategy, launching multiple new brands [4] - The "Jugaogao" self-service hot pot targets individual diners with an average spending of approximately 60 yuan, while the first "Sushi" store opened in October 2025 in Hangzhou with an average spending of around 90 yuan [4] - The "Haidilao Dapaidang" hot pot's first store opened in Guangzhou in December 2025, with a focus on group dining and an average spending of about 110 yuan [4]

Core Insights - The return of Zhang Yong as CEO of Haidilao is driven by disappointing financial results, with a 3.7% year-on-year decline in revenue and a 13.7% drop in net profit for the first half of 2025 [1] - Key metrics such as customer traffic and table turnover rates have also declined, with a loss of 10 million customers and a turnover rate of 3.8 times per day, below the target of 4 times [1] Group 1 - The average spending per customer has decreased from 110 yuan in 2020 to below 100 yuan, indicating a shift in consumer behavior towards more cost-effective dining options [3] - Haidilao has attempted various innovations, including transforming some locations into "nightclubs" and launching "male aesthetics marketing" to attract customers [3][8] - The company has also ventured into the children's meal market, capitalizing on the crisis faced by competitors like Xibei [6] Group 2 - Haidilao's market value has plummeted from over 430 billion HKD at its peak to around 70 billion HKD, reflecting a significant loss of over 80% [11] - The company's aggressive expansion strategy has backfired, leading to a decline in table turnover rates and increased costs, prompting the closure of 300 stores as part of the "Woodpecker Plan" [15] - Despite attempts to restart some locations, the net number of stores decreased in the first half of 2025, highlighting the challenges of expansion [17] Group 3 - The "Red Pomegranate Plan" was initiated to foster internal innovation, resulting in the incubation of 14 brands and the opening of 126 stores by mid-2025 [17] - However, many of these new brands have struggled, with over half of the 26 brands launched by Haidilao either closed or failing to survive beyond a year [21] - The company is also exploring new dining concepts, such as high-end seafood hotpot and themed restaurants, but these efforts have yet to yield significant results [23][25] Group 4 - Consumer preferences have shifted towards value for money, with price being the primary consideration for dining choices, as highlighted by various market research reports [29] - Haidilao's high labor costs, which account for about 30% of expenses, are significantly higher than many competitors, impacting profitability [31] - The company is attempting to enhance its product offerings while maintaining affordability, focusing on fresh ingredients and operational efficiency [34][36] Group 5 - The return of Zhang Yong is seen as a critical move to address the company's challenges and improve operational efficiency [38] - The key to recovery lies in aligning with the cost-conscious mindset of consumers, which is essential for revitalizing the brand [39]

Core Viewpoint - The recent leadership changes at Haidilao, including the return of founder Zhang Yong as CEO and the appointment of four experienced female executives to the board, signify a strategic pivot aimed at stabilizing the core hotpot business while accelerating the growth of the newly formed "Pomegranate Plan" [2][4][10]. Group 1: Leadership Changes - Zhang Yong's return as both Chairman and CEO is interpreted as a move to enhance decision-making efficiency and is seen as a strategic restructuring rather than a mere reaction to past challenges [6][10]. - The appointment of four internal executives, aged 35-44, to the board reflects a shift towards empowering younger leaders with operational backgrounds, transforming the board into a training ground for future leaders [10][11]. Group 2: Strategic Initiatives - The "Pomegranate Plan," launched in August 2024, aims to transition Haidilao from a single-brand operation to a multi-brand ecosystem, with a focus on diversifying its restaurant offerings [9][10]. - Since the initiation of the "Pomegranate Plan," Haidilao has successfully incubated 14 new restaurant brands, contributing significantly to revenue growth, with other restaurant income reaching 597 million yuan, a 227% year-on-year increase [13]. Group 3: Market Response and Future Outlook - Market reactions to the governance changes have been mixed, with Goldman Sachs maintaining a neutral rating while other firms like Citigroup have raised target prices, indicating confidence in the multi-brand strategy [14]. - The long-term challenge for Haidilao lies in nurturing these new brands to become substantial growth drivers while maintaining the core hotpot business, reflecting the broader challenges faced by leading companies in the restaurant industry during periods of transformation [14].

Group 1: Guangdong Trade Performance - In 2025, Guangdong's goods trade import and export reached 9.49 trillion RMB, a year-on-year increase of 4.4%, marking a historical annual high [4] - Exports amounted to 6.03 trillion RMB, up 2.5% year-on-year, while imports were 3.46 trillion RMB, increasing by 7.8% [4] - Guangdong accounted for 20.9% of the national foreign trade total, contributing 24.1% to the national foreign trade growth [4] Group 2: Quarterly Trade Growth - Guangdong's import and export growth rates for the four quarters of 2025 were 4.1%, 3.8%, 3.5%, and 6.1%, showing a steady upward trend [5] - The quarterly trade volumes were 2.13 trillion, 2.41 trillion, 2.47 trillion, and 2.48 trillion RMB, indicating a gradual increase [5] Group 3: High-tech Product Exports - High-tech product exports from Guangdong exceeded 1 trillion RMB for the first time, with a year-on-year growth of 9.5% [6] - The growth in high-tech exports reflects Guangdong's resilience and potential in the face of complex external environments [5][6] Group 4: Night Economy and New Consumption Trends - The newly opened Haidilao Dapaidang hotpot restaurant in Wuhan has attracted significant consumer interest, indicating a revival in the dining industry [12] - The restaurant operates from 10:30 AM to 7:00 AM, focusing on seafood and fresh-cut beef, and has seen long queues since its opening [13] - The unique immersive experience and high quality-to-price ratio are key factors driving consumer traffic to the new dining format [15][18]

Core Viewpoint - Haidilao International Holding Ltd. is facing challenges with declining revenue, profit, and table turnover rates, prompting the return of founder Zhang Yong as CEO to strengthen confidence and unify strategic decision-making [1][3][5] Performance Decline - The company announced that from January 13, 2026, Zhang Yong will resume the role of CEO, following the resignation of Guo Yiqun [2] - In 2024, Haidilao achieved revenue of 42.755 billion yuan, a year-on-year increase of 3.1%, while profit rose by 4.6% to 4.7 billion yuan [3] - In the first half of 2025, revenue fell by 3.7% to 20.703 billion yuan, and profit decreased by 13.7% to 1.755 billion yuan, attributed to a decline in table turnover rates and initial adjustments in product and service innovation [3] Management Changes - The change in CEO is linked to unsatisfactory performance metrics in 2025, including revenue, net profit, and table turnover rates, alongside management issues highlighted by public controversies [3][5] - Zhang Yong's return aims to address these challenges and enhance management efficiency by promoting frontline managers to decision-making roles [3][5] Market Environment - The overall restaurant market is undergoing transformation, with intensified competition in the hot pot sector, leading to operational challenges for large-format restaurants like Haidilao [4][5] - The company has initiated a franchise model to tap into demand in lower-tier cities, with over 70% of franchise applications coming from third-tier cities and below [6] Growth Strategies - Haidilao is implementing the "Red Pomegranate Plan" to encourage the incubation of new restaurant brands, having launched 11 new brands with a total of 74 outlets by the end of 2024 [5] - The company is also focusing on diversifying consumer scenarios, with nearly 30 night snack-themed stores and over 50 standard version theme stores operational by mid-2025 [5] - In the first half of 2025, the takeaway business saw a revenue increase of nearly 60%, indicating a shift towards enhancing service delivery channels [5]

Core Viewpoint - The return of founder Zhang Yong as CEO of Haidilao has led to a significant increase in the company's market value, indicating a strategic shift in leadership amidst ongoing challenges in revenue and profit [2][3][9]. Leadership Changes - Haidilao has experienced three CEO changes in less than four years, with Zhang Yong returning to the role after previously stepping down in 2022 [5][7]. - The recent leadership shake-up includes the resignation of Guo Yiqun as CEO and the appointment of Zhang Yong, who aims to address the company's current challenges [4][5]. - The new board appointments include four women who have been with the company for several years, reflecting a strategy to bring fresh perspectives to the management team [7]. Performance Challenges - Haidilao's financial performance has been declining, with a reported revenue of 20.703 billion yuan in the first half of 2025, a decrease of 3.7% year-on-year, and a net profit drop of 13.7% [9][13]. - The company has faced criticism regarding service quality and employee satisfaction, contributing to its performance issues [9][10]. - The average customer spending has decreased, with figures dropping below 100 yuan for the first time in 2023, indicating a shift in consumer behavior [12][13]. Strategic Initiatives - The "Red Pomegranate Plan" was initiated to diversify Haidilao's offerings beyond traditional hotpot, with 14 new restaurant brands launched, although they currently represent a small portion of total revenue [14][15]. - The company is focusing on innovation and digital transformation to enhance operational efficiency and adapt to changing market conditions [8][10]. - Zhang Yong's return is seen as a move to reinvigorate the company's growth strategy and address the pressing need for new revenue streams [15][20].

Core Viewpoint - COMMUNE is set to become China's first "restaurant and bar" public company, with a business model that successfully integrates various dining experiences and social interactions, achieving over 1 billion RMB in annual revenue and a profitable operation model [1][2]. Business Model and Strategy - COMMUNE operates 112 fully-owned stores across China, generating over 1 billion RMB in annual revenue, and has submitted its IPO application to the Hong Kong Stock Exchange [1][2]. - The company has adopted a unique operational strategy that allows it to serve multiple dining experiences throughout the day, including coffee in the morning, Western cuisine for lunch, and cocktails at night, effectively utilizing the same physical space [3][5]. - The average payback period for COMMUNE's stores is approximately 17 months, with a break-even point of just 3 months, which is considered top-tier in the industry [6]. Financial Performance - In the first three quarters of 2025, COMMUNE reported a profit of 78.63 million RMB, showcasing its ability to maintain profitability despite the challenges faced by the industry [2]. - The company's gross profit margin ranges from 68.7% to 70.5%, significantly higher than the industry average, with approximately 45% of its revenue coming from high-margin alcoholic beverages [10]. - Despite high gross margins, the adjusted net profit for 2023 was 73.4 million RMB, which decreased to 66.2 million RMB in 2024, indicating challenges in maintaining profitability as the number of stores increased [12]. Market Position and Competition - COMMUNE has established itself as a market leader in the restaurant and bar segment, holding a market share of 7.8% in 2024, which is nearly double that of its closest competitors [16]. - The decline of traditional low-cost bars like Helen's, which saw a 95% drop in market value, highlights a shift in consumer preferences towards more engaging and transparent dining experiences [16][19]. - The company faces competition from emerging brands that focus on unique local flavors and community-oriented experiences, which may appeal to younger consumers seeking deeper emotional connections [18][19]. Consumer Trends - There is a notable shift in the social drinking habits of young consumers in China, with a preference for environments that offer a relaxed atmosphere and transparent pricing, as opposed to traditional high-pressure bar settings [3][16]. - The average consumer spending at COMMUNE is around 97 RMB, with various pricing strategies aimed at attracting a diverse customer base [9][10]. - The company is strategically expanding into lower-tier cities, although the average spending in these areas is significantly lower than in first-tier cities, indicating a potential challenge in maintaining profitability [15].

Summary of Haidilao Conference Call Company Overview - **Company**: Haidilao International Holding Ltd. - **Industry**: Restaurant and Food Service Key Points and Arguments Financial Performance - In 2025, Haidilao's restaurant revenue experienced a slight decline, but overall group revenue increased due to growth in the Pomegranate series restaurants and takeout business, with an average selling price (ASP) slightly up compared to 2024 [2][4] - Profit in the second half of 2025 is under pressure due to rising raw material costs and table turnover rate challenges, impacting both profit margins and absolute profit figures [2][5] - The overall revenue for the group saw a small increase driven by the growth of the Pomegranate series and takeout services [4] 2026 Outlook - The outlook for 2026 is characterized as stable and conservative, with a slight increase in the number of stores and adjustments to closures based on actual performance [2][6] - The company aims to stabilize the table turnover rate based on 2025 levels and continue advancing the Pomegranate plan and smart middle platform construction [6][7] Management Changes - A management team adjustment was made to focus on the Pomegranate plan and smart middle platform development, with founder Zhang Yong returning as CEO, which will not alter the company's long-term strategy or existing policies [2][8] Takeout Business - Haidilao's takeout business saw a 100% increase in both revenue and profit in 2025, with plans to operate takeout as independent satellite stores and increase SKUs to enhance profitability [2][9] Brand Development and Competition - The expansion speed of the Yanjing barbecue brand has slowed due to intense market competition, lack of unique flavors and products, and customer dissatisfaction with service [2][10] - The company is exploring new areas through franchising, particularly in lower-tier markets, with good performance from franchise stores [3][18] Store Model Changes - The store model has changed, with a slowdown in the opening of new Yanjing stores due to unmet operational expectations and increased competition in the barbecue sector [11] - The average breakeven table turnover rate remains at approximately 2.5 times [16] Employee Costs and Marketing - Employee costs are expected to remain stable in 2026, with plans to optimize labor efficiency through kitchen upgrades [12] - Marketing expenses have increased significantly due to various promotional activities, and this trend will continue into 2026 [12] Innovation and New Brands - Innovative store types have performed well, with themes like fresh-cut and night snack showing increased customer engagement [13] - The "Pomegranate plan" focuses on developing new brands, with a shift towards collaboration with experienced external operators to reduce failure rates [19][20] Franchise Impact - The franchise business will contribute to the 2026 opening targets, although transitioning from direct to franchise operations may negatively impact overall revenue [21] - The franchise fee structure is generally fixed at over 10%, with adjustments based on individual store performance [22] Additional Important Information - The company plans to continue exploring partnerships with franchisees to enhance market coverage and brand influence [3][18] - The management is focused on maintaining a balance between direct and franchise operations to optimize revenue streams and minimize risks [21]