China Stock -6862 "Haidilao International"

International Opportunities
1

Summary :
Haidilao International Holding Ltd is a China-based company principally engaged in the restaurant operation business. The Company is mainly engaged in the operation of hotpot chain restaurants under the brand of Haidilao. The Company is also involved in the takeaway business, as well as the sales of condiments and ingredients. The Company operates its businesses mainly in the domestic market.

Operation Details:
The total number of Haidilao International restaurants by geography seems to be around 1,343.

The average total size of restaurants 800 - 1000 sq meter’s.

Product offerings include hot pot with customizable broths, meats, seafood, and dipping sauces, plus additional brands like YEAH QING BBQ and delivery services.

The company emphasizes high-quality service and customer experience, with offerings designed to provide value through regional and core product enhancements.

The Average spend per customer in Cy-24 was 97 RMB (1159 INR ) which is premium , although it has fallen from previous years due to deflationary slowdown in the Chinese Economy.

Haidilao’s premium rates are likely due to several factors:

Exceptional customer service, including unique offerings like hand massages and entertainment, creating a memorable dining experience.

High-quality, customizable food options, such as various broths and ingredients, enhancing perceived value.

A unique dining atmosphere with personalized touches, like employees keeping solo diners company, justifying higher prices.

Investment Thesis
Premium Services
Strong Balance Sheet
5.5%+ Dividend yield on CMP as of July 2025
Valuation of 14 times PE

Outlook: Due to real-estate crisis this stock is hammered but as the economy recovers from the deflationary crisis and consumer confidence goes up in china this stock will get it’s mojo back of PE Expansion. Such high quality earnings stock in India is available above 60+ PE .

Patience will matter in this stock as deflationary crisis takes time. But at this valuation Haidilao has limited downside and huge upside.

2025-07-01T18:30:00Z

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