The projected rapid growth of hotpot in China is also expected to benefit Haidilao by shoring up its front-runner status, said analysts. Frost & Sullivan projects hotpot chains to grow 10.2% by 2022 to reach revenue of over 700 billion yuan ($137.5 billion), outpacing the restaurant industry as a whole.
(Aug 13): Haidilao International Holding, one of the largest additions to the MSCI Emerging Markets Index by market capitalisation, has surged 75% since its Hong Kong listing last September while the Hang Sang Index slipped 7.2% in the same period. Analysts believe there’s still steam left in this rally: the 12-month consensus target price of HK$33 ($5.83) is 6% above the stock’s current level.
The Sichuan-based firm is the market leader in hotpot in China, a segment that accounts for almost 14% of the country’s US$28 billion restaurant scene, according to data from Frost & Sullivan. Its lack of listed rivals – there’s only one other hotpot stock, Xiabuxiabu – has added to its lure, prompting comparisons with Kweichow Moutai Co., the world’s most profitable distiller whose fiery drink is coveted and hard to procure.
