Summary of Conference Call Company and Industry Overview - **Industry**: Consumer Sector, specifically focusing on the restaurant and jewelry industries - **Companies Discussed**: Haidilao (restaurant), Laopuhuang (jewelry), and Proya (cosmetics) Key Points and Arguments Haidilao 1. **Performance Recovery**: Haidilao's performance is showing signs of stabilization, with a notable recovery in customer turnover rates in Q3 and Q4 of 2025, maintaining an average customer spend of around 100 RMB [2][6] 2. **Management Changes**: The return of Zhang Yong is expected to positively influence the company's operations, although specific growth targets have not been set. The potential for new store openings is contingent on stabilizing turnover rates [3][4] 3. **Brand Expansion**: Haidilao is exploring multi-brand strategies, with new concepts like barbecue and sushi being developed, which could enhance its market presence [4][5] 4. **Market Sentiment**: The overall sentiment in the consumer sector is at a low point, particularly in the Hong Kong market, but there is potential for a rebound due to low expectations and valuations [1][6] 5. **Future Outlook**: For 2026, the revenue forecast is cautiously optimistic, with estimates suggesting a recovery in performance, potentially reaching 4.5 to 4.7 billion RMB [6][7] Laopuhuang 1. **Sales Momentum**: Laopuhuang is experiencing a surge in customer interest, particularly during the Valentine's Day season, with expectations of exceeding previous sales records due to rising gold prices and promotional activities [9][10] 2. **Brand Strength**: The brand's positioning and market presence have strengthened, with significant customer engagement observed during promotional events, indicating a robust demand outlook [11][12] 3. **Pricing Strategy**: There is anticipation of price increases following the Valentine's Day period, which could further enhance sales performance [10][11] 4. **Market Positioning**: Laopuhuang's strategy includes optimizing store locations and expanding its product offerings, which is expected to drive growth in the coming years [12][13] Proya 1. **Valuation and Growth Potential**: Proya is currently undervalued, with a projected earnings multiple of around 15 times for 2026, making it an attractive investment opportunity [19][20] 2. **Management Changes**: Recent leadership changes are expected to bring new strategies and innovations, particularly in product development and market positioning [19][20] 3. **Product Innovation**: The introduction of new product lines, particularly in the skincare segment, is anticipated to capture market share and drive sales growth [20][21] 4. **Acquisition Strategy**: Proya is actively pursuing acquisition opportunities, particularly in the cosmetics sector, to enhance its market presence both domestically and internationally [22][23] Additional Important Insights - **Consumer Sentiment**: The overall consumer sentiment remains cautious, but there are signs of potential recovery in spending, particularly in the restaurant and jewelry sectors [1][6] - **Market Dynamics**: The competitive landscape is evolving, with companies like Haidilao and Laopuhuang adapting their strategies to meet changing consumer preferences and market conditions [4][10] - **Future Monitoring**: Continuous monitoring of market trends and consumer behavior will be essential for assessing the performance of these companies in the upcoming quarters [24]

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]

Summary of Haidilao Conference Call Company Overview - Haidilao is a leading player in the Chinese restaurant industry, with an estimated valuation of approximately 17 times earnings by the end of the year and a dividend yield close to 5%, making it an attractive investment target [2][3]. Development Stages - The development of Haidilao can be divided into three stages: 1. **Initial Expansion**: Focused on classic products like the beef tallow hot pot. 2. **Deep Adjustment During Pandemic**: Implemented the "Pomegranate Plan" to adapt to market changes. 3. **Current New Brand Exploration**: Actively exploring new brands such as "Banquet Barbecue" [2][4]. Industry Position - The hot pot segment is the largest in Chinese cuisine, with a projected market size of approximately 600 billion yuan in 2024, accounting for 14.5% of the entire Chinese dining market. The hot pot industry is characterized by high standardization, operational efficiency, and long lifecycle, positioning Haidilao with a market share of about 6.9% [2][5][6]. Core Competitive Advantages - Haidilao's core competitive barriers include: - **Service Management Capability**: Known for exceptional service, including family-friendly spaces and additional services like nail care. - **Mentorship Management System**: Ensures standardized service and operational management through a unique apprenticeship model. - **Mystery Shopper Program**: Maintains service quality at the front end of operations. - **Integrated Supply Chain**: Manages everything from ingredient supply to store decoration, ensuring quality stability and cost control [2][7]. Future Growth Potential - The main brand's stores have stabilized and are showing a gradual recovery in table turnover rates. The company is also exploring franchise models to expand its reach in more cities and regions. New brands like "Banquet Barbecue" have made significant progress, and the exploration of small hot pot brands is ongoing. This positions Haidilao for substantial future growth potential [2][8]. - Projected net profits for the next two years are estimated at 4.8 billion yuan and 5.3 billion yuan, respectively, with a current PE ratio of about 17 times and a generous dividend payout of over 95%, providing a relatively secure investment return [2][8].

Summary of Conference Call on the Restaurant Industry and Haidilao Industry Overview - The restaurant industry experienced a year-on-year decline in 2025, primarily due to the absence of consumer subsidies that were present in the same period last year, which ranged from 0.2 to 0.3 [4][3] - The price war among delivery platforms has also impacted the industry, with Haidilao opting not to participate in significant discounts, leading to a decrease in customer traffic [5][4] - The average table turnover rate in the restaurant industry was approximately 4 times in July and August 2025, consistent with national averages [2] Haidilao's Performance and Strategies - Despite pressure on table turnover rates, Haidilao maintained stable gross margins through cost control measures [4][8] - The company anticipates that the implementation of mandatory social security policies in September could increase labor costs by about 3 percentage points, but it does not plan to raise prices [8][9] - Haidilao is focusing on optimizing store locations and sizes to enhance space utilization and investment returns [10] - The company has lowered the threshold for franchise operations, resulting in new franchise stores performing comparably to company-owned stores, indicating acceptance of the new policies [12][13] Competitive Landscape - The competitive environment in the restaurant industry has intensified, with brands like Banlu Hotpot seeking to go public, creating pressure on existing players [11] - Haidilao aims to avoid direct competition with Banlu Hotpot, which targets a higher-end market, while Haidilao focuses on the mass market [11] Cost Management and Future Outlook - The increase in social security costs is manageable and will not significantly raise overall operational costs [15] - Haidilao's external delivery business remains limited, as the product offerings are not well-suited for delivery, and the company prefers to focus on scaling its sub-brands [14] - The company has implemented innovative strategies to enhance table turnover, such as themed events and promotions, which have yielded positive results in specific periods [18] - The overall market environment is challenging for new restaurant brands, with cautious consumer spending impacting the development of new brands [17] - The average customer spending for mass-market hotpot has been declining, while the spending for banquet-style barbecue remains stable at around 100-110 yuan [17] Conclusion - The restaurant industry is navigating a challenging landscape with various pressures, including competition and changing consumer behavior. Haidilao's strategic focus on cost control, franchise expansion, and innovative marketing is aimed at maintaining its market position and improving performance in the second half of 2025 [20][21]