HAIDILAO shares dropped as much as 10% on Sept. 9 after a major shareholder placed about 259 million shares worth HKD2.75 billion in pre-market deals at an average HKD10.62 apiece. Morgan Stanley held its Overweight rating and HKD16.5 target, flagging near-term sentiment pressure until investors see no further asset disposals.
HAIDILAO shares fell as much as 10% after a major shareholder sold about 259 million shares for HKD2.75 billion in pre-market negotiated transactions, the latest test of confidence in the Hong Kong-listed hotpot chain.
Morgan Stanley kept its Overweight rating and HKD16.5 target price, saying the stake reduction may pressure market sentiment in the short term until investors regain confidence in the earnings outlook and become convinced there will be no further asset disposals.
The stock opened 4.39% lower and touched a session low of HKD10 before trading at HKD10.3, down 9.49%, with turnover of 290 million shares worth HKD3.074 billion. The block was struck at an average HKD10.62 per share, according to exchange data. Short selling accounted for 34.37% of turnover on Sept. 8.
The sell-down lands as Citi described mixed first-half 2026 results across China's consumer goods sector, pointing to a challenging operating environment for restaurant operators that has kept earnings pressure on the group. The placement, priced at a discount to the prior close, suggests the selling shareholder sought to exit a large block quickly rather than feed shares into the market over time.
The HKD16.5 target implies roughly 60% upside from current levels if the decline proves overdone and no further sell-downs materialize. The drop leaves the stock trading near the lower end of its recent range, with the controlling shareholder's remaining stake now the key variable for the recovery path.
The next catalyst is whether additional block trades surface, which would determine how quickly HAIDILAO recovers toward Morgan Stanley's target. Investors will also watch the group's next earnings update for signs that margin rebuilding is on track, given the sector-wide pressure Citi flagged in its first-half review.
This article is for informational purposes only and does not constitute investment advice.
