【Zhenzhuo Institutional View】Haidilao (06862.HK): Recovery in dining demand drives operational improvement

Recent domestic catering retail data shows that catering revenue in October-November maintained mid-single-digit year-on-year growth, improving from the low growth level in mid-year, reflecting a gradual recovery in offline demand. As e-commerce platform subsidies decrease, the pressure on offline catering has eased. Combined with the seasonal peak characteristics of the hot pot industry in winter, the market generally expects a sequential improvement in customer traffic and table turnover performance for related companies. Additionally, the Central Economic Work Conference proposed directions such as "boosting service consumption." If specific measures are implemented, they are expected to provide some support for brands related to dining scenarios.

At the company level, management disclosed that the table turnover rate in November was similar to the same period last year, slightly lower than in October, mainly due to holiday misalignment and seasonal factors, with no clear signs of structural weakening in demand. Benefiting from cost control and product structure adjustments, the gross margin and operating profit margin in 3Q25 improved slightly compared to the first half of the year, indicating a gradual recovery in single-store profitability.

In terms of structural development, the company continues to adjust store formats, focusing on nighttime consumption, family dining, and pet-friendly scenarios. The table turnover efficiency of renovated stores has improved compared to before the renovation. Meanwhile, the takeout business maintained a strong year-on-year growth rate in 3Q25, with full-year revenue expected to approach RMB 2 billion, providing the company with additional income sources and demand supplementation. Considering the macro environment, industry competition landscape, and changes in the company's operational efficiency, the market holds an observant but generally positive outlook on its mid-term profit recovery and cash flow performance.

Source: KGI Securities