Shares of Chinese hotpot chain Haidilao International rose 7% in Hong Kong on Wednesday, after the company's first-half results revealed delivery revenue more than doubled.
The results, released on Tuesday, showed Haidilao's revenue rose 7.9% year-on-year to 22.34 billion yuan ($3.32 billion) in the six months to June, while core operating profit, a non-IFRS measure, rose 4.4% to 2.51 billion yuan.
Delivery was Haidilao's fastest-growing business segment, with revenue jumping 121.2% to 2.05 billion yuan, driven mainly by rapid growth in its single-serving fast-food business and the expansion of its delivery network through more local hubs.
Revenue from Haidilao-branded restaurants, which accounted for 79.9% of group sales, fell 4% to 17.84 billion yuan, mainly due to a decline in the number of self-operated restaurants.
As of the end of June, Haidilao operated 1,389 restaurants under its core hotpot brand, and 183 restaurants across 21 other catering brands.
What is driving Haidilao's growth?
Revenue from other restaurant operations surged 113.1% to 1.27 billion yuan, which Haidilao attributed to the development of catering brands under its "Pomegranate Plan" to explore new catering formats and contributions from dining scenarios, including camping hotpot and late-night hotpot.
The company said its food-stall hotpot and sushi formats have developed relatively mature single-restaurant models and entered the stage of "large-scale replication," with plans to progressively scale them up from the second half of this year, becoming a significant source of revenue growth for its other restaurant operations in 2027.
In a note after the earnings, Citi said Haidilao's first-half operating profit before other income rose 13% from a year earlier, coming in 6% above its expectations.
The bank also noted that Haidilao's seafood-stall hotpot and sushi formats should start scaling up in the second half of 2026, while Haidilao-branded store openings are expected to accelerate in 2027, with likely accelerated topline growth next year. The bank maintained its buy rating.