SUPER HI INTERNATIONAL HOLDING LTD. (SPHIF)

Haidilao is not just another Chinese hot pot chain. The restaurants are known for tableside noodle-pulling, free snacks and appetizers while you wait, live entertainment, and a service intensity that borders on theatrical. Super Hi International exists to take that formula across oceans, from China into North America, Europe, and the Asia-Pacific region. What has emerged is a company caught between the ambition to scale a beloved brand globally and the sobering realities of operating restaurants on six continents.

The origin of Haidilao

Haidilao was founded in Sichuan in the late 1990s as a hot pot restaurant, a cooking method where diners simmer raw meats and vegetables in a shared broth at the table. What made Haidilao different was not the food alone but the service philosophy — staff were trained to anticipate needs, offer entertainment during the wait, and create a memorable social experience. The brand grew dominant in mainland China over two decades, becoming synonymous with hot pot dining.

Mainland China’s operations remained under Haidilao International Holding Co., Ltd, the parent company listed separately on the Hong Kong Stock Exchange. Super Hi was spun out as a separate entity — formed in 2022 — to operate Haidilao restaurants in all markets outside mainland China. The bifurcation reflected the complexity of managing restaurants in radically different regulatory, cultural, and economic environments. A single company trying to run restaurants in Chengdu and Chicago faced too many conflicting pressures.

The international expansion and its execution

By the end of 2025, Super Hi operated 126 Haidilao restaurants across 14 countries. North America held 20 locations, Southeast Asia accounted for 73, and the remainder were scattered across Europe, Australia, and other regions. This rapid geographic spread was intentional — the company saw an opportunity to introduce a beloved Asian dining concept to global markets at a moment when Chinese food culture held appeal worldwide.

Revenue climbed steadily, from US$686 million in fiscal 2023 to US$840 million in fiscal 2025. That growth rate — roughly 10 to 13 percent annually — was solid for casual dining but modest by the standards of a business expanding into thirteen new countries. Net profit fluctuated, hitting a low of US$21 million in 2024 before recovering to US$36 million in 2025. Behind that volatility lay the heavy lifting of international expansion: new location ramp, localization costs, and the burden of operating in unfamiliar markets.

The structural pressures mounting

The cost to operate a Haidilao abroad is materially higher than in China. Labor costs in North America and Europe run two to three times those in China. Rent for premium dining locations in Manhattan, London, or Sydney carries a steep premium. Fresh ingredients and cold-chain logistics for supplies sourced to match the Sichuan menu standards added operational friction.

By early 2025, the company’s operating margins had compressed sharply. Q1 2025 showed operating margins of just 4.1 percent, down from 6.6 percent in the prior-year quarter — a warning sign. Labor and materials together consumed roughly 69 percent of revenue, leaving little room for profit or reinvestment. In a mature market with established competitors, this margin profile is punishing.

A second, subtler problem: regulatory fragmentation. Haidilao’s international locations historically offered on-site manicure and pedicure services as part of the hospitality experience. In the United States, offering beauty services requires cosmetology licenses in most states — licenses Haidilao could not easily obtain. The company had to abandon this signature element, diminishing the experience differentiation it relied on to justify premium pricing.

The strategic inflection

As of 2024 and into 2025, Super Hi began to slow its pace of new openings. Instead of chasing headcount, management shifted focus to “enhancing single-store profitability” — the language of a company forced to reckon with unit economics. Rather than opening a new restaurant every month, the priority became improving margins and reducing losses at underperforming locations.

This reorientation showed in product strategy, too. The company began introducing localized menu items — flavors, proteins, and preparation methods tailored to regional tastes rather than pure transplant of the Sichuan original. It started experimenting with delivery and takeaway models to drive scale beyond sit-down service. And it began testing promotional strategies and competitive pricing in response to local rivals.

Super Hi remained profitable overall, and its brand awareness in key markets grew. But the gap between the ambition — becoming Haidilao, a household name globally — and the economic reality was widening. Hot pot is a niche concept outside Asia, casual dining margins are thin everywhere, and running a labor-intensive, fully-staffed restaurant at a loss in order to acquire customers is an unsustainable game.

The research angle

Anyone analyzing Super Hi should start with the company’s annual report (Form 20-F on SEC EDGAR), which breaks revenue and unit counts by geography, outlines market conditions, and flags regulatory and competitive risks. Watch the quarterly trends in per-location revenue and operating margins — these tell you whether the expansion is generating returns or burning cash. Track new restaurant openings against closures to see if the company is actually pulling back or merely announcing plans to do so. The gross margin trend on a same-store basis (controlling for mix) reveals whether the company can improve profitability without simply closing low-margin locations.

The real test for Super Hi is whether Haidilao can win at scale on international markets without the cost and brand leverage of 400 locations to support centralized supply chains and training. The company’s ability to execute on operational discipline while maintaining the brand experience that made Haidilao special in the first place will determine whether this remains a growth story or a cautionary tale about the limits of restaurant globalization.