An artist performs face-changing tricks at a Haidilao hotpot restaurant in Hong Kong on Sept 22, 2018. (PHOTO / BLOOMBERG / CHINADAILY.COM.CN)

Hotpot restaurant chain Haidilao International Holding has filed an application with the Hong Kong Stock Exchange to spin off its overseas operation, Super Hi International.

Haidilao, founded in Sichuan province in 1994, said in the filing that the spinoff will help unlock value, pave the way for a separate listing, and create a platform to raise funds independently. The move also will allow “more focused development,” the company said.

The number of diners of Haidilao dropped from 8.1 million in 2019 to 7.1 million in 2020, but recovered to 9.8 million last year

In the three months to March 31, Haidilao recorded a loss of $28.49 million, up from a loss of $25.2 million in the first quarter of 2021.

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For the year ended Dec 31, the loss was $150.75 million, up from $53.8 million the year before. Haidilao also reported losses in 2019 ($33.01 million) and 2020 ($53.7 million). The financial data are not audited. In 2021, it received pandemic-related government grants of $17.45 million.

Revenue increased 59.8 percent from $68.3 million in 2021 to $109.1 million for the three months ended March 31.

The spicy Sichuan-style soup base, beef tripe, shrimp paste, and hand-pulled noodles are among the company’s signature menu items. It offers four signature soup bases — the spicy vegetable oil Sichuan-style soup base, tomato soup base, mushroom soup base, and savory bone soup base. Subsidiary Yihai Group is the biggest supplier of the soup base. In 2021, purchases amounted to $8.6 million.

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The global hotpot market has begun to recover to $28.9 billion in 2021, after shrinking to $25.6 billion the year before as a result of the pandemic, according a commissioned report by consultancy Frost & Sullivan. By 2026, the market is predicted to grow to $46.5 billion.

Noting risks to business, the company, which has more than 7,500 workers, says there is no guarantee that it will be able to successfully manage the restaurants in all jurisdictions and effectively manage growth. Customer confidence in the brand could diminish. Also, the company plans to open new restaurants in the United Arab Emirates and in Spain, where it has little or no operating experience.

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The number of diners dropped from 8.1 million in 2019 to 7.1 million in 2020, but recovered to 9.8 million last year. In 2019, the company began offering deliveries.

Haidilao opened the first overseas restaurant in Singapore in 2012 and its first US restaurant in 2013. Singapore Super Hi was incorporated in Singapore by Haidilao Singapore. Since 2012, the company has expanded to 97 restaurants in 11 countries as of March 31.