Hot Stock! Stirring the Pot to Get Super Hi

I like salacious titles, but they need to deliver the goods.

I’ve trained myself to deliver the goods for you guys.

Like Chinese takeout.

Here’s another one:

Want a boots-on-the-ground stock?

Want a small cap with under coverage?

Let me whet your appetite.

In the Kendrick v Drake beef, there was a clear winner: The Ho King restaurant in Toronto. The context is that some robberies happened near the restaurant, and it is the only place open late enough past typical business hours for the events to transpire, which is why Drake and Kendrick refer to the restaurant.

This indicates that Chinese restaurants are open all the time worldwide, making them an ideal spot to bring a BBL partner for a bite.

All over the world, people are going on dinner dates with their BBL loved ones, as cosmetic surgery is all the rage in the region as well. Coincidentally, Metro Boomin encapsulates this by implying that BBL Drake likes late-night Chinese restaurants.

Chinese Food is Open Source

The issue with most Chinese restaurants is that they are ‘open source’, as your corner Chinese restaurant is unlikely to have brand equity with Kung Pao Chicken.

One of Ho King’s best dishes is its fried rice.

However, it’s an SME with no scale.

Yet there is something more fulfilling and healthier to end your night with: hot pot is all the rage in the Asian diaspora.

*From a historical context, the roots of hot pot and stews stem from the leftovers of colonial leaders, coincidentally containing broth extracts with health benefits. I mean, there are beef purists who don’t believe in sauce.

Therefore, putting it in a liquid is sort of blasphemy, isn’t it?

But, I digress.

Chairman lMao

One of my shareholders brought to my attention a recent ADS listing that is flying completely under the radar of Wall Street and many fund managers in Asia.

Which is a nice pure play on growth and maturity in USD without being too much a BRIC in your portfolio.

Long Hi International HDL 0.00%↑

Beef not BRICS

Super Hi is coming to location near you for decades to come. Here is more excerpts for you.

Since opening our first restaurant in Singapore in 2012, we have expanded to 115 restaurants in 12 countries across four continents as of December 31, 2023, including Singapore, Thailand, Vietnam, Malaysia, Indonesia, Japan, Korea, the United States, Canada, the United Kingdom, Australia and the United Arab Emirates. We currently do not have restaurant business operations in Greater China (which includes mainland China, Hong Kong, Macau and Taiwan), and, when as part of HDL Group, did not have restaurant business operations in Greater China.

In 2022, we consummated a series of business and corporate reorganization transactions (the “Group Reorganization”) in connection with the listing of our ordinary shares on the HKEx in December 2022 (the “Hong Kong Listing”). As part of the Group Reorganization, we established SUPER HI INTERNATIONAL HOLDING LTD., our holding company incorporated under the laws of the Cayman Islands, in May 2022. Upon completion of the Group Reorganization and immediately prior to the consummation of the Hong Kong Listing in December 2022, all of HDL Group’s restaurant business operations outside Greater China were held by SUPER HI INTERNATIONAL HOLDING LTD.

Our ordinary shares have been listed on the HKEx since December 30, 2022 under the stock code “9658.” The Hong Kong Listing of our ordinary shares was achieved through HDL Group’s distribution (the “Distribution”) of 100% of its equity interest in SUPER HI INTERNATIONAL HOLDING LTD. to qualified holders of HDL Group’s ordinary shares as of the close of business on the record date of December 20, 2022 (the “Record Date”) in proportion to their respective shareholding in HDL Group.

Get Super Hi King not Ho King

The key metric lies in selling to emerging markets at a premium. Once you observe the revenue per chain throughout the region, it’s evident that it exceeds F&B comps. As the Asian diaspora globalizes, they bring their consumption habits to higher GDP per capita areas, ensuring higher revenues per location at growth and scale. This, to me, is the most compelling feature and a case example of selling first poor and then the rich—an inversion of typical business models.

Benefiting from our proven management philosophy and successful localization efforts, we have built an international Haidilao restaurant network with highly standardized operations, effective management systems and motivated employees. We have achieved strong growth and margin expansion in the past three years.

Restaurant network expansion.   Our number of restaurants increased from 74 restaurants as of January 1, 2021 to 115 restaurants as of December 31, 2023. While we primarily focused on the expansion within existing countries and enhancing their operating performance over the past three years, we keep exploring new markets and have opened our first restaurant in the United Arab Emirates in the first half of 2023.

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Same-store sales growth.   Alongside our continual restaurant network expansion, we have also achieved meaningful same-store sales growth of 54.0% and 8.8% in 2022 and 2023, respectively.

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Table turnover rate.   Our overall table turnover rate improved from 2.1 times per day in 2021 to 3.3 times per day in 2022, and further improved to 3.5 times per day in 2023.

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Average daily revenue per restaurant.   Our average daily revenue per restaurant increased from US$10.0 thousand in 2021 to US$15.4 thousand in 2022, and further increased to US$16.3 thousand in 2023.

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Income from operation margin.   Our income from operation margin improved from 0.2% in 2022 to 6.3% in 2023.

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Restaurant level operating margin.   Our restaurant level operating profit margin significantly improved from 4.1% in 2022 to 9.0% in 2023.

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Strengths

We believe that the following strengths have contributed to our historical growth and will drive our future development:

A leading Chinese cuisine restaurant brand in the international market;

Haidilao as a global cultural phenomenon and an ambassador of Chinese culinary heritage;

Strong local know-how and international operating capabilities;

Proven management philosophy that enables sustainable international expansion; and

Seasoned management team with a corporate culture that prescribes acting with kindness.

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Growth Strategies

We intend to implement the following business strategies going forward:

Continue to grow our international Haidilao brand, enhance our dining experience and propagate Chinese culinary heritage internationally;

Enhance restaurant performance and explore new sources of revenue;

What are you waiting for?

Hit the BID and take me for a steak.