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News> Business> Content
Wednesday, September 26, 2018, 23:30
Haidilao becomes new behemoth in Asia's restaurant world
By Bloomberg
Wednesday, September 26, 2018, 23:30 By Bloomberg

In this undated photo, a waiter serves a customer at a Haidilao restaurant in Beijing. (PHOTO PROVIDED TO CHINA DAILY)

Chinese hotpot chain Haidilao International Holding Ltd has become the biggest restaurant group on Asian exchanges after rising as much as 10 percent in its Hong Kong debut.

The company is trading at about 63 times its adjusted earnings for the year ended June

With a market value of about US$12 billion, Haidilao is larger than all Hong Kong-listed restaurant operators combined, according to data compiled by Bloomberg. Shares closed 0.1 percent higher at HK$17.82, valuing the company at about 63 times its adjusted earnings for the year ended June.

“It’s easy for a market leader to tell an attractive Chinese consumer story,” said Linus Yip, a strategist at First Shanghai Securities Ltd. in Hong Kong. “Investors will watch closely how well the company can control costs and maintain high growth when its network is already very big.”

Haidilao is the only restaurant chain listed in Asia to reach a market value surpassing US$10 billion. That makes it one of the world’s biggest companies in the sector -- similar to Domino’s Pizza Inc and Chipotle Mexican Grill Inc.

READ MORE: China's top hotpot chain attracts Hillhouse to US$963m IPO

Haidilao is the only restaurant chain listed in Asia to reach a market value surpassing US$10 billion

While its trailing price-earnings ratio eclipses nearly all global peers with a market value of more than US$10 billion, Haidilao’s forward multiple looks more reasonable. The hotpot chain’s offer price of HK$17.80 valued the company at about 30 times estimated 2019 earnings, people with knowledge of the matter said earlier this month.

For comparison, peer hotpot chain Xiabuxiabu Catering Management China Holdings Co is trading at about 25 times trailing 12-month earnings and 17 times estimated 2019 net income, data compiled by Bloomberg show.

Haidilao has opened 96 new outlets this year through Sept 3, expanding its network to 363 restaurants, the Beijing-based company said in the prospectus of its initial public offering. Revenue surged 54 percent to 7.3 billion yuan (US$1.1 billion) in the first half from a year ago.

ALSO READ: Beijing launches restaurant checks after sanitation scandal

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