The name is hot, and the IPO is probably hotter.
Hotpot chain Sichuan Haidilao Catering has filed for an initial public offering in Hong Kong, seeking to raise up to US$700 million.
Sichuan province, in southwestern China, is known for its spicy cuisine, a fitting birthplace for the hotpot restaurant chain.
Haidilao has become the largest Chinese restaurant operator, and it is known not only for its excellent Four Seasons-type of hotpot but also for its legendary customer service.
The company’s IPO prospectus shows that sales from its 320 outlets topped 10 billion yuan (US$1.57 billion) last year, up 36 percent from 2017, while its profit rose 40 percent to 1 billion yuan.
According to Hong Kong Economic Journal’s analysis, Haidilao’s financial performance is simply amazing. Typically, a Haidilao shop breaks even within three months of its opening, and most of them achieve positive cash flow between six and 13 months.
Its first Hong Kong restaurant opened in Mong Kok last summer, and sales reached 16 million yuan in the first two months.
Last year, each customer at Haidilao, which has served over 100 million customers, spent an average of 180 yuan.
The chain plans to open 180 to 220 outlets this year, adding to the 273 restaurants it had at the end of 2017.
What makes Haidilao unique as a restaurant is the quality of its service, which some think is over the top.
Its courteous and attentive staff always see to it that you get small but special treatment that makes you feel that you are a truly valued client.
While waiting for a table, for example, you are offered free biscuits, fruit, and even a free manicure and massage. There’s also a hair ring and a mobile charger whenever you need them.
Because of the chain’s terrific service and the goodwill it has earned from its clients, it won’t be surprising if Haidilao’s IPO turns out to be as hot as its hotpot.
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