IPO解读丨3店、1.14亿市值、1个泰式故事，Happy City的火锅小店能否逆袭？

Core Viewpoint - Happy City Holdings Limited (HCHL) is set to go public in the U.S. after achieving a net profit of approximately $131.97 million in FY2024, despite being a small player in the Hong Kong dining market with only 2.2% market share [1][3]. Industry Overview - The Hong Kong dining industry faced a significant downturn from 2019 to 2022, with a 17.3% decline in overall market size and a staggering 42.9% drop in the hot pot sector due to pandemic-related restrictions [3]. - Following the lifting of pandemic measures in 2023, the industry began to recover, with the total dining market expected to rebound to HKD 111.7 billion in 2024, and the hot pot market projected to reach HKD 7.4 billion [3]. - The specialty hot pot segment is anticipated to grow at a compound annual growth rate (CAGR) of 6.3%, potentially reaching HKD 4 billion by 2029 [3]. Company Performance - Happy City reported revenues of approximately $675.44 million in FY2023, with a net loss of $108.58 million, but turned around in FY2024 with revenues of $829.51 million and a net profit of $131.97 million [3][4]. - The company's recovery is attributed to three main strategies: price adjustments, cost optimization, and reduced marketing expenses [4]. Strategic Initiatives - Price adjustments included raising food prices, with average spending per person reaching around HKD 260 [4]. - Cost optimization was achieved through negotiations with suppliers, leading to a stable total cost and an increase in gross margin from 11.4% in FY2023 to 27.3% in FY2024 [4]. - Marketing expenses were cut by nearly 70%, decreasing from $463,800 in FY2023 to $149,600 in FY2024 [4]. Market Positioning - Happy City differentiates itself by focusing on Thai-style hot pot, which allows it to avoid direct competition with larger brands like Haidilao [7][10]. - The company operates two brands, "Thai Gold Pot" and "Niu Niu Hall," with the former being the only Thai hot pot brand among the top ten in Hong Kong, capturing approximately 2.2% of the specialty hot pot market [8][10]. - The operational efficiency is enhanced through a self-service model and time-limited dining, significantly increasing table turnover rates [8]. Challenges Ahead - As Happy City prepares for its IPO, it faces scrutiny regarding its expansion plans amid a net current liability of $918,300, highlighting potential funding pressures [12]. - The company plans to open three new locations in Hong Kong and Singapore by 2026, with each requiring an investment of HKD 7 million (approximately $897,400) [13]. - The competitive landscape remains challenging, with major players like Cow Cow Hot Pot and Haidilao dominating the market, posing risks of market dilution and operational challenges for new locations [13][14].