Haidilao Seeks Valuation Exceeding All Hong Kong Eatery Stocks

(Bloomberg) -- Never mind the market rout. In its initial public offering, Haidilao International Holding Ltd. is aiming for a market cap greater than all Hong Kong-listed restaurant operators combined.

The Chinese hotpot chain is seeking a value of at least $10 billion, higher than all of the 33 eatery companies traded in Hong Kong, according to data compiled by Bloomberg including all of its outstanding stock. Haidilao is offering 424.5 million shares -- about 8 percent of its enlarged equity capital -- at HK$14.80 to HK$17.80 apiece, according to deal terms.

The price range values the hotpot chain at 25.1 times to 30.2 times estimated 2019 earnings, people with knowledge of the matter have said. That’s more than the average multiple of 16 times for the four biggest restaurant operators trading in Hong Kong. Haidilao revenue surged 54 percent in the six months through June from a year earlier to about 7.3 billion yuan ($1.1 billion), according to a pre-listing filing.

The eatery plans to price the IPO on Sept. 18, with trading beginning Sept. 26. It’s moving ahead despite a stock rout that’s pushed the Hang Seng Index down almost 20 percent from a January high. Companies listed on Hong Kong’s main board in the past year have dropped a median of 19 percent from their IPO price through Friday, data compiled by Bloomberg show.

To contact the reporters on this story: Fox Hu in Hong Kong at fhu7@bloomberg.net;Crystal Tse in Hong Kong at ctse44@bloomberg.net

To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Cecile Vannucci

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