Core Viewpoint - The future of restaurant investment will move away from a scattergun approach to a more focused and meticulous strategy, emphasizing the need for investment institutions that understand both capital and industry, capable of identifying and nurturing opportunities [1][14] Group 1: Recent Developments in Restaurant IPOs - New tea beverage brand Bawang Chaji (CHA.O) officially listed on NASDAQ on April 17, becoming the first new-style tea beverage company to enter the US stock market, with a market capitalization exceeding $5 billion after a 12% opening day increase [2] - In the week prior, Hong Kong restaurant brand Niu Daren successfully listed on NASDAQ, raising $120 million, while another brand, Yujian Xiaomian, submitted its prospectus to the Hong Kong Stock Exchange, aiming to become the first listed Chinese noodle restaurant [2] - The recent surge in restaurant IPOs has drawn attention, with several brands, including Mixue Ice Cream and Guming, also having listed in Hong Kong [2] Group 2: Investment Trends and Market Dynamics - According to Qing Yong, founder of Tomato Capital, the current wave of IPOs is a continuation of the investment boom in the restaurant sector that peaked in 2021, which saw 178 financing events totaling over 21 billion yuan [3] - The 2021 investment frenzy led to inflated valuations, with brands like Manner and Hutouju achieving single-store valuations exceeding 100 million yuan and 375 million yuan respectively [4] - However, investment in the restaurant sector has cooled significantly, with a 20% year-on-year decrease in financing events in 2023, as capital shifts towards mature enterprises [4] Group 3: Challenges and Future Outlook - Current restaurant investments face the challenge of limited available projects, with many enterprises under pressure to exit their investments, making IPOs a necessary choice [4][5] - The investment landscape has shifted, with a more cautious valuation approach now prevalent, with PE ratios for quality projects at 15 times and ordinary projects at 10 times [10] - The market is witnessing a transformation where only those with sustainable cash flow and reasonable growth will receive valuations aligned with their fundamentals [10][12] Group 4: Investment Strategies and Focus Areas - The financing logic in the restaurant industry has changed, with three main types of companies seeking funding: those nearing IPO, those facing exit pressure, and those with validated single-store models ready for scaling [11][12] - Investment institutions are increasingly focusing on nurturing quality entrepreneurs and building a comprehensive industry ecosystem, moving away from traditional financial investment models [12][13] - Companies are exploring overseas markets for greater investment opportunities, with the US market offering stable single-store profit models and mature exit mechanisms [15]

Core Viewpoint - Super Hi International Holding Ltd. will report its unaudited financial results for the first quarter of FY2025 on May 21, 2025, before the U.S. market opens [1][2]. Company Overview - Super Hi operates Haidilao hot pot restaurants internationally, recognized as a leading Chinese cuisine brand with roots in Sichuan since 1994 [3]. - Haidilao has become one of the most popular and largest Chinese cuisine brands globally, known for its unique dining experience, which includes warm service, great ambiance, and delicious food [3]. - The brand has been ranked among the world's most valuable restaurant brands for six consecutive years since 2019 and earned the title of "World's Strongest Restaurant Brand" for 2024 [3]. - As of December 31, 2024, Super Hi had 122 self-operated Haidilao restaurants in 14 countries across four continents, making it the largest Chinese cuisine restaurant brand internationally in terms of the number of countries covered [3].

Group 1 - The Hang Seng Index rose by 1.10%, gaining 250 points to reach 22,941 points, while the Hang Seng Tech Index increased by 1.56% [1] - The stock of Hu Shang A Yi (02589) surged over 52% on its first trading day, with a transaction volume of HKD 493 million [1] - Domestic insurance stocks saw broad gains, with China Pacific Insurance (02601) up 3.69%, China Life (02628) up 2.70%, New China Life (01336) up 3%, China Property & Casualty Insurance (02328) up 1.95%, and Ping An Insurance (02318) up 1.39% [1] Group 2 - Goodbaby International (01086) rose over 15% as reports indicated the U.S. is considering tariff exemptions for imports of Chinese baby strollers [1] - Yunfeng Financial (00376) increased over 14%, with a cumulative rise of 150% over the past week, as Ant Group is expected to achieve business synergies internally [1] - Changfei Optical Fiber (06869) rose over 8% as its subsidiary Bochuang Technology plans to invest in the third phase expansion project of Changxin Sheng in Indonesia [1] Group 3 - Meituan-W (03690) increased by 3% due to a surge in tourism activity, reaching a three-year high, which boosted OTA platforms [2] - Trip.com Group-S (09961) rose by 2% after signing a memorandum of understanding with Visit Oman, indicating strong overseas market development prospects [2] - China Software International (00354) increased by 2.6% as Huawei's first HarmonyOS computer was officially launched, benefiting the core of the Harmony ecosystem [2] Group 4 - Guoquan (02517) surged over 17% as shareholders committed to a six-month lock-up period after converting to H-shares, with expectations for improved store efficiency and opening speed this year [3] Group 5 - Tehai International (09658) rose by 7% due to strong overseas market demand, with institutions optimistic about the company's stable operations [4] - SMIC (00981) fell over 2% ahead of its quarterly report, amid reports that Trump plans to lift AI chip restrictions [5]

Core Viewpoint - The Chinese restaurant industry is experiencing a notable recovery driven by a shift in policy focus towards expanding domestic demand, with significant growth in consumer confidence and spending observed in the first quarter of 2024 [1][2]. Group 1: Market Performance - The Hong Kong restaurant index has rebounded over 20% since April 22, reaching around 787 points, with several restaurant companies like Xiaobai Xiaobai and Jiumaojiu showing positive performance [1]. - In Q1 2024, the offline consumption heat index increased by 14.2% year-on-year, with the dining sector growing by 14.5% [1]. - The overall revenue of the domestic restaurant industry in 2024 is projected to reach 55,718 billion yuan, marking a 5.3% increase compared to the previous year [2]. Group 2: Revenue and Profit Growth - The restaurant sector has shown double-digit growth in both revenue and profit, with 17 listed restaurant companies reporting an 11% increase in revenue and a 10% increase in profit for 2024 [5][6]. - The coffee and tea segment leads in revenue growth at 22.5%, while traditional Chinese dining (excluding hot pot) and fast food show growth rates of 6.3% and 5.6%, respectively [7]. Group 3: Store Expansion and Market Dynamics - The total number of restaurant stores increased by 20% in 2024, reaching 133,549, with coffee and tea stores growing by 24% [9][11]. - The closure rate of restaurants has risen to 61.2%, indicating a significant industry reshuffle [5]. - The trend of down-market expansion is evident, with 52% of restaurant stores located in third-tier cities and below [13]. Group 4: Strategic Adjustments and Innovations - Companies like Haidilao are adopting franchise models to penetrate lower-tier markets, with over 70% of franchise applications coming from these areas [14]. - New business models are being explored, such as Kudi Coffee's convenience store concept and Guoquan's community kitchen strategy [15]. - The restaurant sector is expected to stabilize in Q2 2025, with a potential recovery in valuation and fundamentals as seasonal demand increases [16].

Investment Rating - The industry rating is "Recommended" [4] Core Insights - The consumption power during the May Day holiday was strong, with a total of 1.467 billion people traveling across regions, a year-on-year increase of 8.0% [1][2] - Hotel bookings saw a significant increase, with OTA hotel sales up 24.93% year-on-year, and user spending on hotels also rising by 24.8% [1] - The retail and catering sectors experienced a robust performance, with key retail and catering enterprises' sales increasing by 6.3% year-on-year during the holiday [2] - The tourism sector thrived, with various scenic spots reporting record visitor numbers and revenue growth [2] Summary by Sections 1. Industry Overview - The report highlights a resurgence in offline traffic, benefiting traditional business formats, with key beneficiaries including Yonghui Supermarket and other retail chains [3] - AI technology is expected to continue its upgrade, with increasing penetration in applications, benefiting companies like Focus Technology and others [3] 2. Consumer Behavior - Consumers are increasingly willing to pay for emotional value, leading to a sustained high performance in the new retail sector, with beneficiaries including Miniso and Pop Mart [3] - Under the backdrop of promoting domestic demand, cyclical sectors are expected to recover from low levels, releasing performance elasticity, with beneficiaries including Haidilao and others [3] 3. Investment Opportunities - The report suggests focusing on five investment themes, including the recovery of offline traffic, AI technology upgrades, emotional value in consumer spending, cyclical sector recovery, and the potential of consumer brands going overseas [3]

Market Overview - The Hong Kong stock market experienced a collective rise during the holiday, with the Hang Seng Index increasing by 1.74%, the Hang Seng China Enterprises Index rising by 1.92%, and the Hang Seng Tech Index climbing by 3.08% [1][2]. Technology Sector - Tech stocks saw significant gains, with Xiaomi Group rising over 6%, Alibaba and JD.com increasing by over 3%, and Tencent up by over 2% [2]. - Notable individual performances included Tencent Holdings at 487.80 HKD (+2.22%), Alibaba at 122.00 HKD (+3.83%), and Xiaomi at 53.10 HKD (+6.31%) [3]. Robotics and AI - Robotics stocks surged, with Horizon Robotics increasing by over 14%, and other companies like Shengye and Jinli Permanent Magnet rising by over 11% and 5%, respectively [4][5]. Healthcare and Biotech - The healthcare outsourcing sector was active, with Kanglong Chemical and WuXi AppTec both rising over 7%, and WuXi Biologics increasing by over 5% [6]. New Energy Vehicles - New energy vehicle companies saw substantial increases, with Leap Motor rising over 7%, Xiaopeng Motors and Xiaomi both up over 6%, and Li Auto and BYD increasing by over 3% [7]. Consumer Goods - Beer stocks performed well, with Hong Kong San Miguel rising over 4%, and Qingdao Beer and Budweiser APAC both increasing by over 2% [8]. - Home appliance stocks also strengthened, with Quan Feng Holdings rising over 7%, and Hisense and Techtronic Industries increasing by over 4% [9]. Gambling Sector - The gambling sector saw broad gains, with Galaxy Entertainment and MGM China both rising over 2% [10]. Restaurant Sector - The restaurant sector faced declines, with Yum China dropping over 7% and other companies like Chaogao and Cafe de Coral decreasing by over 1% [11]. Local Consumption - Local consumption stocks weakened, with Chao Yue Holdings falling over 6% and Chow Tai Fook down over 1% [13]. Stock Performance - Hong Kong Exchanges saw a peak increase of 3.46% during trading, reaching 352.6 HKD, marking a new high since early April [13]. - Standard Chartered Group's stock initially rose over 4% post-earnings but closed up only 0.71% at 113.6 HKD, with a total market value of 269.225 billion HKD [15]. Future Outlook - Huatai Securities noted that the market has largely priced in the impact of tariffs on earnings expectations, with a 1.5% downward adjustment in profit expectations for core offshore Chinese stocks [17].

Investment Rating - The report assigns an "Outperform" rating to multiple companies including Anta Sports, Haidilao, and China Feihe, while Budweiser APAC is rated "Neutral" [1]. Core Insights - The report highlights a successful co-branding event by GOODME, which led to a temporary crash of its official app due to high traffic [2]. - Luckin Coffee has upgraded its lemon tea series by incorporating fresh fruit ingredients [2]. - POP MART reported a significant revenue increase of 165%-170% year-on-year for Q1, with a 95%-100% growth in China and a staggering 475%-480% growth overseas [2]. - Green Tea has passed the HKEX listing hearing and plans to open 150, 200, and 213 new stores in 2025, 2026, and 2027 respectively [2]. - The CPC Politburo emphasized the need to increase incomes for middle- and low-income groups and to vigorously develop service consumption [2]. Weekly Performance Summary - In the F&B sector, top performers included GOODME (+22.0%), SuperHi International (+7.3%), and Xiabuxiabu (+4.5%), while underperformers included ChaPanda (-4.9%) and Tongqinglou (-3.5%) [3][8]. - In the designer toys sector, MINISO (+10.1%), BLOKEES (+8.2%), and POP MART (+4.7%) showed strong performance [3][8].

Core Viewpoint - Super Hi International Holding Ltd. will hold its annual general meeting (AGM) on June 24, 2025, to consider proposed resolutions [1] Company Information - Super Hi operates Haidilao hot pot restaurants, a leading Chinese cuisine brand with a history dating back to 1994 in Sichuan [5] - As of December 31, 2024, Super Hi had 122 self-operated Haidilao restaurants in 14 countries across four continents, making it the largest Chinese cuisine restaurant brand internationally by the number of countries covered [5] - Haidilao has been recognized as one of the world's most valuable restaurant brands for six consecutive years since 2019 and was named "World's Strongest Restaurant Brand" for 2024 by Brand Finance [5] AGM Details - The AGM will be held virtually at 11:00 a.m. Hong Kong Time on June 24, 2025, with voting rights for shareholders recorded as of May 9, 2025 [1][2] - Holders of American depositary shares (ADSs) must submit voting instructions to Citibank, N.A. and cannot attend the AGM in person [2] Financial Reporting - The Company has filed its annual report on Form 20-F for the fiscal year ended December 31, 2024, with the U.S. Securities and Exchange Commission [3] - A Hong Kong annual report for the same period has also been published in accordance with local listing rules [4]

Financial Performance - SUPER HI INTERNATIONAL HOLDING LTD. reported a significant increase in revenue, achieving a total of $150 million for the fiscal year 2024, representing a 25% growth compared to the previous year[1]. - For the year ended December 31, 2024, the company recorded revenue of US$778.3 million, reflecting a 13.4% increase from US$686.4 million in 2023[29]. - The Group recorded revenue of US$778.3 million in 2024, a 13.4% increase from US$686.4 million in 2023[47]. - Total revenue for 2024 reached $747.296 million, a 13% increase from $661.162 million in 2023[62]. - Revenue from Haidilao restaurant operations increased by 13.0% year-on-year to US$747.3 million, driven by improved table turnover rates and strategic expansion[58]. - The Group's revenue from delivery business reached US$11.3 million in 2024, a 15.3% increase from US$9.8 million in 2023[74][77]. - Revenue from other segments amounted to US$19.7 million in 2024, reflecting a 27.9% increase from US$15.4 million in 2023[76][78]. - The Group's net profit decreased by 15.4% to US$21.4 million in 2024 from US$25.3 million in 2023, mainly due to increased foreign exchange losses[112][117]. User Growth and Market Expansion - The company’s user base expanded to 1.2 million active users, reflecting a 40% increase year-over-year, driven by enhanced marketing strategies and product offerings[2]. - Market expansion plans include entering three new international markets by the end of 2025, targeting a 15% increase in market share[5]. - By the end of 2024, the number of overseas Haidilao members exceeded 6 million, representing a growth of over 40% from 2023[40]. - The company plans to continue expanding its market presence and enhancing operational efficiency through new strategies and technology[66]. Operational Efficiency - The company's operating income margin in 2024 was 6.8%, a slight increase from 6.3% in 2023[29]. - The restaurant level operating margin improved to 10.1% in 2024 from 9.0% in 2023, indicating enhanced operational efficiency[167]. - The average table turnover rate of Haidilao restaurants was 3.8 times per day, with the same store table turnover rate reaching 3.9 times per day, both increasing by 0.3 times per day compared to last year[31]. - Dynamic operational strategies were implemented during peak periods, including adjusting business hours and optimizing staff utilization[36]. Investments and Innovations - The company is investing $20 million in research and development for new product lines, aiming to launch two innovative products by Q3 2025[4]. - The company has completed a strategic acquisition of a tech startup for $10 million, expected to enhance its technological capabilities and product offerings[6]. - The company is exploring innovative business forms, including barbecue, specialty hot pot, and fast food, under the "Pomegranate plan" to establish itself as a leading global comprehensive catering service group[32]. - The Group's strategic exploration of diverse business forms contributed to the popularity of hot pot condiment products and secondary branded restaurants[76][78]. Sustainability and Corporate Governance - The company is focusing on sustainability initiatives, allocating $5 million towards environmental projects in 2024[8]. - The organization maintained a principle of "aligned interests and disciplined management" to enhance employee motivation and operational capabilities[41]. - The Group does not currently have a foreign exchange risk hedging policy but monitors currency risks closely[150]. Financial Position and Capital Management - Total assets as of December 31, 2024, were US$684.4 million, an increase from US$576.9 million in 2023[27]. - Total equity increased to US$361.7 million in 2024, up from US$272.1 million in 2023[27]. - The current ratio improved to 2.5 as of December 31, 2024, compared to 1.7 in 2023[145]. - The gearing ratio decreased to 0.3 as of December 31, 2024, down from 0.4 in 2023[145]. - The Group plans to finance future capital expenditures through cash generated from operations and unutilized proceeds from the initial public offering[136]. Management and Leadership - The company is focusing on internationalization and globalization strategies under the leadership of newly appointed chairlady Ms. Shu Ping[174]. - Mr. LI has over 17 years of experience in the catering industry and was appointed as the chief operating officer (mainland China) from March 2022 to October 2022[184]. - Ms. LIU has over 12 years of experience in the catering service sector and was promoted to overseas product director in March 2022[186]. - Mr. TAN was appointed as an independent non-executive Director on December 12, 2022, responsible for supervising and providing independent judgment to the Board[190].

Core Viewpoint - Haidilao is increasingly adopting a price reduction strategy to attract more customers and adapt to the competitive market environment, introducing smaller portion sizes and lower-priced menu items to cater to the "solitary economy" trend [1][3][6]. Pricing Strategy - Haidilao has launched a "small pot" model priced between 16-22 yuan and introduced 35 types of small dishes priced between 4-25 yuan, aiming to lower the consumption threshold [1][3]. - The average customer spending has decreased from 110.1 yuan in 2020 to 97.5 yuan in 2024, reflecting a shift towards more affordable dining options [4][8]. - The company has implemented various pricing strategies, including high-value meal packages and discounts for students, to maintain customer traffic despite declining average spending [6][8]. Market Trends - The hot pot industry is experiencing a general decline in average spending, with consumer preferences shifting towards value for money, leading to a decrease in average spending from over 80 yuan in late 2023 to below 70 yuan by the end of 2024 [6][8]. - Haidilao's table turnover rate has improved to 4.1 times per day, indicating effective management despite the drop in average spending [6][8]. Expansion and Business Model - In 2024, Haidilao opened 62 new stores but had a net decrease of 6 stores, bringing the total to 1,368 [8]. - The company is cautiously exploring a franchise model to expand its reach while managing costs, with a high entry barrier for potential franchisees [10][11]. - Haidilao has also initiated a diversification strategy, launching multiple new restaurant brands under the "Red Pomegranate Plan" to innovate and expand its market presence [12][14]. Operational Adjustments - The company has decentralized decision-making to regional managers, allowing for localized menu adaptations and improved customer satisfaction [16][17]. - Haidilao is focusing on enhancing customer engagement through unique in-store experiences and personalized service, which may help in retaining customer interest amid competitive pressures [15][17].