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Hotpot stock that's up 75% still has room to run, analysts say

Bloomberg
Bloomberg8/13/2019 07:22 AM GMT+08  • 3 min read
Hotpot stock that's up 75% still has room to run, analysts say
(Aug 13): Haidilao International Holding, one of the largest additions to the MSCI Emerging Markets Index by market capitalisation, has surged 75% since its Hong Kong listing last September while the Hang Sang Index slipped 7.2% in the same period. Analys
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(Aug 13): Haidilao International Holding, one of the largest additions to the MSCI Emerging Markets Index by market capitalisation, has surged 75% since its Hong Kong listing last September while the Hang Sang Index slipped 7.2% in the same period. Analysts believe there’s still steam left in this rally: the 12-month consensus target price of HK$33 ($5.83) is 6% above the stock’s current level.

The Sichuan-based firm is the market leader in hotpot in China, a segment that accounts for almost 14% of the country’s US$28 billion restaurant scene, according to data from Frost & Sullivan. Its lack of listed rivals -- there’s only one other hotpot stock, Xiabuxiabu -- has added to its lure, prompting comparisons with Kweichow Moutai Co., the world’s most profitable distiller whose fiery drink is coveted and hard to procure.

The projected rapid growth of hotpot in China is also expected to benefit Haidilao by shoring up its front-runner status, said analysts. Frost & Sullivan projects hotpot chains to grow 10.2% by 2022 to reach revenue of over 700 billion yuan ($137.5 billion), outpacing the restaurant industry as a whole.

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