Hot-pot chain eyes global growth after strong US debut

The listing in the US gives Super Hi access to a deeper pool of investors, improved liquidity and makes it easier to raise funds abroad in the future. — Bloomberg

Beijing: Super Hi International Holding Ltd, the international operator of China’s popular hot-pot chain Haidilao, is planning to boost its international footprint following a listing in the United States that’s been well-received.

The company’s American depositary shares, which represent 10 ordinary shares trading in Hong Kong, are up 7.4% after three sessions in New York, versus a 3.5% drop during the same period of an index tracking Chinese shares listed on the Nasdaq.

Some 70% of proceeds from the US$53mil offering will be tagged to strengthen the company’s brand and expand its network globally, according to the prospectus.

The listing in the US gives Super Hi access to a deeper pool of investors, improved liquidity and makes it easier to raise funds abroad in the future.

“Leveraging the more active US stock market compared to Hong Kong helps achieve growth in its overseas business, with a focus on expanding Haidilao’s store network, brand value, and image positioning in overseas markets,” said Shen Meng, a director at Beijing-based Chanson & Co.

Super Hi began trading in the US as momentum increases for Chinese firms weighing a listing abroad.

There’s been optimism that Beijing will increase approvals for companies seeking US initial public offerings (IPOs) after China’s regulator said last month it would support overseas listings of tech firms, following two years marked by a drought of blockbuster deals from the sector.

Earlier this month, shares of Zeekr Intelligent Technology Holding Ltd, the high-end electric car brand under Zhejiang Geely Holding Group Co, debuted in New York after an IPO that raised US$441mil, the biggest US listing by a China-based company since 2021. Shares are up 29%.

Still, mid to large offerings by Chinese firms in the United States remain scarce. Of 30 Chinese companies that listed in the United States since 2023, only five raised more than US$50mil.

As of the end of March, Super Hi International operated 119 Haidilao restaurants in 13 countries including Australia, the United States, Canada, Britain and the United Arab Emirates.

The restaurants, frequently chosen for effusive birthday celebrations in mainland China, hosted 26.7 million guests in 2023, according to the prospectus.

While the US listing adds liquidity to the company’s stock, Super Hi wasn’t in need of additional cash since it doesn’t have borrowings and is profitable, according to Angela HanLee, a Bloomberg analyst.

“Haidilao brand is one of the pioneers among China restaurant brands exploring overseas markets and it has a proven track record with both earnings improvement and network expansion,” she said. “The company could gain operating leverage and expand its profit margin.” — Bloomberg

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