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]

Company Overview - The company is expected to maintain stable same-store sales growth in 2H25, with cost optimization performing better than anticipated, resulting in resilient overall profitability [1] - The company continues to implement its "different Haidilao" strategy to enhance same-store performance, including the establishment of themed stores and product innovation [1] Performance Commentary - The company anticipates a quarter-on-quarter improvement in table turnover rates in 2H25, with year-on-year rates remaining stable [1] - Despite a challenging dining environment, the company benefits from a lower base and effective operational adjustments, estimating a quarter-on-quarter increase in table turnover rates and stable average spending per customer [1] - Cost optimization is better than expected, with overall profitability remaining resilient; however, gross margin is expected to decline year-on-year due to rising raw material costs and lower margins on fresh-cut products [1] New Brand Development Strategy - The company is optimizing its new brand development strategy, introducing a top-down management approach alongside the existing bottom-up proposal system [2] - New brands such as Yansheng BBQ and Juhigh Self-service Hotpot are expected to expand significantly, with plans to open 80-90 new locations for the BBQ brand in 2025 [2] - The company remains cautious about expanding its main brand, projecting a low single-digit percentage growth in new store openings [2] Profit Forecast and Valuation - Due to better-than-expected cost optimization, the company has raised its net profit forecasts for 2025 and 2026 by 6% and 7% to CNY 4.01 billion and CNY 4.71 billion, respectively [2] - The current stock price corresponds to a P/E ratio of 19x for 2025 and 16x for 2026, with a target price increase of 6% to HKD 17, implying a 15% upside potential [2]