Sichuan Haidilao mulls IPO for expansion

Chinese hotpot restaurant group Sichuan Haidilao Catering reportedly plans to raise up to HK$700 million (US$89.1 million) in a Hong Kong IPO aimed at taking the brand global.

Haidilao, which mainly serves Sichuan-style hotpot and is popular for its free services and entertainment such as manicures and board games for waiting customers, has tapped Goldman Sachs and CMB International (CMBI) as joint sponsors for the proposed IPO, scheduled for the second half of the year.

Haidilao’s chief strategy officer Zhou Zhaocheng has told Reuters the company has “no comment on market speculation”. Goldman has declined to comment, while CMBI has not responded to requests for comment.

Co-founded by former tractor factory worker Zhang Yong in 1994, Haidilao has about 190 stores across China and has already entered Singapore, Los Angeles, Seoul and Tokyo. In February it signed a lease for its first restaurant in Hong Kong.

Its focus on customers service helped Haidilao become a case study at Harvard Business School in 2011.

Yihai International Holding, which makes hotpot soups and sauce condiments, was spun off from Haidilao and went public in Hong Kong in 2016. The unit, controlled by Zhang and another Haidilao co-founder, has a market capitalisation of about $13.2 billion.

Haidilao had a food hygiene scandal at two of its Beijing restaurants last year, and one of its Singapore outlets was suspended for two weeks this year for violating hygiene standards.

Acknowledging the issues, the company started to offer live streams from its kitchens in Beijing.

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