HAIDILAO FOUNDERS US$6B RICHER
At about US$21b, restaurant operator’s market value now higher than Chipotle Mexican Grill
CHINA’S insatiable demand for spicy hotpot is placing the founders of a restaurant chain atop one of the world’s fastestgrowing fortunes, allowing them to outpace many of the wealthiest families globally.
As of Monday, Zhang Yong, chairman of Haidilao International Holding Ltd, and his wife, Shu Ping, had grown US$6 billion richer (RM24.69 billion) this year, a 79 per cent jump in just over three months.
That pace was the fastest in Asia and globally only topped by Australian mining baron Andrew Forrest, who has doubled his fortune this year, according to the Bloomberg Billionaire’s Index, a ranking of the world’s 500 richest people.
Haidilao went public in September, and it’s been a lucrative time for China’s largest hotpot chain, popular for the spicy broths in which diners cook their meats and vegetables. The company is pushing to make its restaurants more efficient by creating automated kitchens.
Perks like the free manicures it offers waiting customers have kept families coming in. And the brand is expanding overseas with new locations planned in New York and London.
Last year, revenue surged 60 per cent to 17 billion yuan (RM10.75 billion), and that’s helping to push the stock up more than 75
per cent this year. At about US$21 billion, the company’s market value is now higher than Chipotle Mexican Grill Inc.
“A good set of results has resulted in the stock rallying to new highs,” said Tristan D’Aboville, an analyst at William O’Neil & Co, pointing to increases in sales growth and new restaurants added in the second half of last year.
Another power couple behind Haidilao, co-founder and executive director Shi Yonghong and his wife Li Haiyan, have also grown 79 per cent wealthier this year, based on Monday’s data. Their fortune was now worth US$6.4 billion.
Still, the enthusiasm for Haidilao’s stock has made it increasingly expensive. Recently valued at about 47 times projected earnings for the next 12 months, it’s around four times more expensive than Hong Kong’s benchmark Hang Seng Index, according to Bloomberg data.
China’s increasingly competitive hotpot market is projected to grow at a compounded annual rate of more than 10 per cent, with revenue topping 700 billion yuan by 2022, according to consultancy Frost & Sullivan.
Besides small, privately-owned restaurants, there are other competing brands like the publicly listed Xiabuxiabu Catering Management China Holdings. Haidilao has a less than three per cent share of the Chinese hotpot market, according to its September prospectus.