(Yicai Global) Sept. 27 -- Shares in Chinese restaurant chain Haidilao International Holding, whose eateries welcomed 100 million visitors last year, fell more than 5 percent today after a stellar start on the Hong Kong Stock Exchange yesterday.
The Sichuan-based hotpot brand [HKG:6862] opened at HKD18.80 (USD2.40) yesterday, higher than its HKD17.80 issue price -- which was already at the top end of its range. The listing was the most expensive to access in the history of the HKEX, with a minimum purchase of 1,000 shares, costing HKD17,800 (USD2,278).
The stock surged as much as 10 percent in intraday trading yesterday, briefly giving the firm a market cap of over HKD100 billion (USD12.8 billion) -- USD600 million less than the country's biggest restaurant chain Yum China Holdings, which runs KFC, Pizza Hut and other brands in China -- before closing up just 0.11 percent.
Haidilao plans to use the almost HKD7.5 billion (USD1 billion) it raised in the IPO to open around 200 restaurants this year, with as many as 22 in overseas markets, which is becoming the focus of the firm's strategy, Chief Strategy Officer Zhou Zhaocheng told Yicai Global at the listing ceremony.
The chain made its first moves overseas in 2012 when it set foot in Singapore, which is home to more Haidilao eateries than any other non-China market. The firm had 25 non-mainland restaurants as of the end of June, in Hong Kong, Taiwan, Singapore, South Korea, Japan and the United States, making up 7.5 percent of total revenue. It had 341 restaurants around the world as of the same time.
Overseas restaurants mostly use companies local to them to stock up, but Zhou envisions the firm setting up its own international supply chain as it expands across the globe.
Editor: James Boynton