Haidilao shares suffered a dramatic collapse today, plunging more than 12% at one point to hit a low of HK$10, marking the weakest level since August 2024. The stock has now fallen over 20% so far this year, triggered directly by a massive share disposal from founder Zhang Yong's wife, Shu Ping, who sold 259 million shares through UBS at approximately HK$10.60 each, cashing out a staggering HK$2.75 billion.
This heavy-handed selloff sent shockwaves through the market, with Morgan Stanley describing the move as "surprising" given that Zhang Yong himself had increased his stake just in May, only for his wife to offload shares shortly after. The immediate cause of today's rout is clear, but beneath the surface lies a far more concerning signal hidden within Haidilao's half-year financial report that deserves closer scrutiny than the selloff itself.
On the surface, Haidilao's 2026 interim results appear respectable: revenue reached RMB 22.3 billion, up 7.9% year-on-year, reversing last year's decline, while the table turnover rate recovered from 3.8 to 3.9. At first glance, many investors would conclude that the hotpot giant has stabilized and the sector is rebounding, but a closer examination reveals a very different reality beneath the glossy headline numbers.
The most critical issue lies in Haidilao's core dine-in hotpot business. While total revenue climbed 7.9%, revenue from "restaurant operations" — the actual earnings generated from dine-in hotpot — contracted 4% to RMB 17.8 billion. This means the company's most fundamental business is actually shrinking, despite what the aggregate figures suggest.
The revenue growth was instead driven by delivery services and multi-brand expansion. Haidilao has aggressively launched numerous sub-brands in recent years, such as Yanqing BBQ, alongside its delivery operations, all of which have doubled in growth this year, artificially propping up the overall top line. In other words, the "glossy" 7.9% revenue increase is powered by delivery and sub-brand ventures, not by a recovery in the hotpot dine-in business that built the company.
Even more alarming is the same-store sales performance. While the table turnover rate edged up from 3.8 to 3.9, suggesting customer traffic is returning, Haidilao's same-store sales actually registered negative growth. How can turnover improve while same-store sales decline? Because the company is attracting customers through lower average spending and promotional tactics — the average ticket price dropped from RMB 97.9 to RMB 97. While turnover rose marginally, each table is spending less, and when multiplied together, per-store revenue continues to fall. This is not genuine recovery but a "false rebound" — negative same-store growth, a marginal improvement in turnover from a low base, and declining ticket prices paint a picture of underlying weakness, not revitalization.
Today's sharp selloff appears driven by the major shareholder's disposal, but it represents a dual release of both "sentiment and fundamentals." Emotionally, the HK$2.75 billion reduction raises doubts that even the founding family lacks confidence in the company's prospects. Fundamentally, with dine-in hotpot declining, same-store sales in negative territory, and revenue growth dependent on delivery and sub-brands, the lackluster performance is tangible and undeniable. This explains why Haidilao shares have fallen 23% this year, leaving the market capitalization at under HK$60 billion — investors have seen the problems clearly and are voting with their feet.
Haidilao's predicament reflects a common challenge facing many legacy consumer companies: the core business has peaked, growth has stagnated, and the only remaining story is the "second growth curve." Whether this second curve can gain traction and justify the valuation depends on whether it becomes a genuine new profit driver or merely a fig leaf masking deterioration in the core operations. For Haidilao, if delivery and sub-brands can sustain their momentum and establish new earnings pillars, the transformation will prove successful. However, if these ventures are merely propping up the financial statements to conceal the dine-in decline, the valuation will inevitably face correction. The clearest benchmark is simple: watch whether same-store sales in the core hotpot dine-in segment turn positive and whether the table turnover rate can climb back above 4. Until then, Haidilao's growth remains "borrowed" rather than "owned."