Haidilao Reports Strong Delivery Growth Amid Decline in Core Hotpot Revenue
Shares of Haidilao International, a prominent Chinese hotpot chain, experienced a 7% increase in Hong Kong following the release of its first-half financial results, which highlighted a remarkable growth in delivery revenue. The company's overall revenue rose by 7.9% year-on-year, reaching 22.34 billion yuan (approximately $3.32 billion) during the six months ending in June. Notably, the core operating profit also saw a 4.4% increase, totaling 2.51 billion yuan.
The delivery segment emerged as Haidilao's fastest-growing area, with revenue surging by 121.2% to 2.05 billion yuan. This growth is largely attributed to the rapid expansion of its single-serving fast-food offerings and the enhancement of its delivery infrastructure through the establishment of more local hubs.
Conversely, revenue from Haidilao-branded restaurants, which represent 79.9% of total sales, declined by 4% to 17.84 billion yuan. This downturn is primarily linked to a reduction in the number of self-operated restaurants.
By the end of June, Haidilao operated a total of 1,389 restaurants under its core hotpot brand, alongside 183 establishments across 21 other catering brands. Revenue from these additional restaurant operations surged by 113.1% to 1.27 billion yuan, a success attributed to the company's "Pomegranate Plan," which focuses on exploring new catering formats and innovative dining experiences, including camping hotpot and late-night hotpot.
The company has developed its food-stall hotpot and sushi formats into mature single-restaurant models, entering a phase of large-scale replication. Plans are underway to progressively expand these formats starting in the latter half of the year, positioning them as a significant revenue source for other restaurant operations by 2027.
In a follow-up note after the earnings report, Citi highlighted that Haidilao's operating profit before other income increased by 13% compared to the previous year, exceeding expectations by 6%. The bank anticipates that the seafood-stall hotpot and sushi formats will begin scaling up in the second half of 2026, while new openings of Haidilao-branded stores are expected to accelerate in 2027, potentially leading to enhanced topline growth in the coming year.
