(Yicai Global) July 12 -- Shares of Haidilao International Holding ended higher after the operator of China’s biggest spicy hotpot restaurant chain said it is considering to spin off the firm’s overseas unit for an initial public offering in Hong Kong by way of introduction.

Haidilao [HKG: 6862] gained 1.5 percent today to finish at HKD16.24 (USD2.41). The Hang Seng Index fell 1.3 percent amid a retreat of Chinese stock markets.

The potential spin-off would help Haidilao and Super Hi International Holding improve their respective businesses and deliver value-added benefits through a standalone listing, its Chengdu-based parent company said late yesterday, adding that the unit has not yet filed to for an IPO.

Haidilao lost CNY4.2 billion (USD624 million) last year after sales slumped in the second half because of Covid-19 outbreaks and restrictions, its annual earning report showed. The company also told investors that the loss at its overseas business widened.

Haidilao’s shares plunged more than 80 percent to an all-time low of HKD10 in March from a peak of HKD85.80 in February last year, mainly due to the impact of Covid-19. Haidilao was founded in 1994 and went public in September 2018.

The pandemic has hit food and beverage business operators hard. Haidilao’s radical store expansion plan released before the novel coronavirus suffered a big setback. The firm closed more than 300 restaurants last year, leading to an impairment loss of more than CNY3.7 billion.

Operating income from restaurants was CNY39.5 billion (USD5.9 billion) in 2021, making up 96 percent of Haidilao’s total revenue. Take-out services accounted for just 1.7 percent at CNY706 million (USD105.3 million).

Haidilao had 1,443 restaurants worldwide as of the end of last year, 1,329 of which were in the Chinese mainland, according to its annual report.

Editor: Futura Costaglione