Nomura Lifts Haidilao Target Despite 13% Profit Decline

Edgen Stock

·Mar 30 2026, 05:12

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Key Takeaways

Nomura reiterated its "Buy" rating for Haidilao, raising its price target to HKD18.4 despite the restaurant chain reporting disappointing full-year 2025 results. While the investment bank sees future growth catalysts, current performance metrics, including a significant drop in operating profit and a reduced dividend, signal underlying business pressures.

Analyst Upgrade: Nomura increased its price target for Haidilao to HKD18.4 from HKD17.3, maintaining a "Buy" rating based on expected improvements in 2026.
Profit Squeeze: The company's core operating profit fell 13% year-on-year as its table turnover rate declined to 3.9 times and gross margin narrowed by 2.6 percentage points.
Dividend Disappointment: Haidilao cut its dividend payout ratio to approximately 87% for the year, a drop from about 95% in 2024, signaling a more conservative capital return policy.

Core Profit Falls 13% on Weaker Operations

Haidilao's full-year 2025 performance revealed significant operational headwinds, causing its core operating profit to fall by 13% year-on-year. While total revenue edged up by a marginal 1.1% to RMB43.23 billion, this failed to offset deteriorating efficiency and profitability metrics. A key pressure point was the decline in the table turnover rate, a critical industry measure, which fell to 3.9 times. This slowdown was compounded by a 2.6 percentage point contraction in the company's gross profit margin, which settled at 37.9%.

Nomura Raises Target to HKD18.4, Citing 2026 Catalysts

Despite the underwhelming 2025 results, Nomura upgraded its outlook for Haidilao, lifting its price target from HKD17.3 to HKD18.4 while maintaining a "Buy" rating. The firm acknowledged last year's performance was disappointing but believes multiple growth catalysts will emerge for the company in 2026. However, Nomura highlighted a key point of concern for investors: the reduction in the dividend payout ratio. The company lowered its payout from approximately 95% in 2024 to about 87%, a move that disappointed the market and suggests management is preserving capital in the face of operational challenges.