Plates of raw food sit on a table as diners cook them in a pot at a Haidilao hotpot restaurant, operated by Haidilao International Holding, in Hong Kong.[SHANGHAI] China's largest hotpot chain is whetting the appetite of investors as well as diners.
The Sichuan-based firm is the market leader in hotpot in China, a segment that accounts for almost 14 per cent of the country's US$21 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, the world's most profitable distiller whose fiery drink is coveted and hard to procure.
"The hotpot market in China is still extremely fragmented," Arnold Tam, Hong Kong-based analyst at Bright Smart Securities, said in an email."Haidilao's market share is expected to rise as the industry evolves towards strengthening the strongest players." The restaurant chain's revenue nearly tripled in the past three years to 17 billion yuan in 2018, while profit climbed over 500 per cent to 1.7 billion yuan in the same period, according to data compiled by Bloomberg.
Its fortunes were also helped by a food safety scandal at rival Xiabuxiabu in September last year, when a Shandong province customer allegedly found a rat in a hotpot, causing shares to fall. Xiabuxiabu had contested that allegation after an internal preliminary probe.
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