Haidilao’s Stock Surge Driven by Delivery Expansion and Diversified Brand Portfolio

Customers dine at a Haidilao hot pot restaurant in a Beijing shopping complex on March 13, 2025. One of China’s leading restaurant chains faces public scrutiny after a video surfaced showing a patron urinating into a simmering hotpot at a Shanghai branch, sparking widespread online backlash.

Shares of Chinese hotpot chain Haidilao International increased 7% in Hong Kong following the company’s first-half financial results, which highlighted significant growth in delivery services.

The results, released Tuesday, showed revenue rising 7.9% year-over-year to 22.34 billion yuan ($3.32 billion) for the six months ended June, while core operating profit—a non-IFRS figure—grew 4.4% to 2.51 billion yuan.

Delivery services emerged as the fastest-growing segment, with revenue soaring 121.2% to 2.05 billion yuan. This growth was fueled by the rapid expansion of its single-serving fast-food offerings and the broadening of its delivery network through additional local hubs.

Revenue from Haidilao-branded restaurants, representing 79.9% of group sales, declined 4% to 17.84 billion yuan, primarily due to a reduction in self-operated outlets.

Key Growth Drivers

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Revenue from non-core restaurant operations surged 113.1% to 1.27 billion yuan, attributed to the “Pomegranate Plan” initiative. This strategy focuses on exploring new dining formats, such as camping hotpot and late-night hotpot experiences.

The company emphasized that food-stall hotpot and sushi concepts have developed scalable business models, with plans to expand these formats from the second half of 2025. These outlets are expected to become a major revenue driver for other restaurant operations by 2027.

Citi analysts noted that Haidilao’s first-half operating profit before other income rose 13% year-over-year, exceeding forecasts by 6%. The bank anticipates seafood-stall hotpot and sushi formats to scale up in the second half of 2026, with Haidilao-branded store openings likely accelerating in 2027, potentially boosting revenue growth next year. Citi maintains its buy recommendation.

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