Chinese hotpot chain Haidilao eyes nearly US$1 billion IPO

Haidilao said it earned a net profit of 647 million yuan in the first half of the year. (Bloomberg pic)

BEIJING: China’s premier hotpot chain Haidilao International is hoping to raise almost $1 billion in an initial public offering in Hong Kong, according to a prospectus made public Wednesday.

The Sichuan hotpot operator is known for its good customer service – a rarity in China – with queuing diners provided with snacks, tea, and even manicures.

The legion of customers also enjoys live shows during their meals put on by Haidilao staff. For those who do not finish their meals, they can return uneaten meat.

Haidilao aims to sell 424.5 million shares for between HK$14.80 and HK$17.80 each, which could raise as much as $963 million.

But it could face headwinds as Hong Kong’s stock market struggles – it fell into a bear market on Tuesday after dropping more than 20% from its record high set in January.

The restaurant operator said it would use proceeds from the offering to push its global expansion, repay loans and improve food safety-related technology.

The chain has had problems in the area before, with a Beijing outlet under fire last year over allegations of a rat-infested kitchen and dirty dishes.

Zhang Yong, 47, founded the chain in 1994 after years of working in a tractor factory in southwest Sichuan province. Zhang earned 14 million yuan ($2 million) stewarding the company last year, the prospectus shows.

The chain has kept to its roots and boiling chilli pepper-laden water to cook the frozen meat remains a fan favourite.

It has expanded rapidly, adding more than 30 restaurants per year since 2015.

Revenue has also jumped, with its 341 restaurants earning 647 million yuan on sales of 7.3 billion yuan for the six months ending in June.

The company is expected to price its IPO on Tuesday with trading to start on September 26.