Haidilao March 2026 operational update: healthy traffic, with further support from consumer recovery ahead

Overview

This report is Morgan Stanley's March 2026 operational update on Haidilao International Holding Ltd (6862.HK). The key message is that y/y growth was stronger in the first half of March and slowed later in the month, which the report believes may reflect the timing distortion from this year's later Lunar New Year holiday. Overall traffic trends are described as healthy, and April has an easier y/y base than March, which could allow restaurant operations to benefit earlier from macro stability and the recovery in offline consumption.

Core views

The report's view is constructive: on one hand, Haidilao Hot Pot's table turnover rate rose slightly y/y in March, with 2M26 growth of about 4%; on the other hand, the company is still adjusting its store network, opening 4 direct-operated stores and 2 franchised stores in March while closing 10 stores. Founder/Chairman/CEO Mr. Yong plans to increase his holdings based on a positive view of the market and the company's prospects, further supporting the report's upbeat stance.

Analysis framework

The report mainly evaluates Haidilao's operational recovery and potential share-price catalysts from monthly operating data, y/y traffic and table-turnover trends, the Lunar New Year timing shift, store opening and closing pace, the macro consumption environment, and management/founder share-buying signals. On valuation, it uses a base-case target P/E and, together with the 2025-2027e EPS CAGR of 27%, operating leverage, and cost control, assesses a reasonable valuation level.

Methodology notes

• Valuation methods目标市盈率法

  20x 2026e earnings

  The base case uses 20x 2026e earnings, taking into account a gradual macro recovery, low inflation, the company's slow store-network expansion, as well as strong operating leverage and disciplined cost control.

• 模型口径Morgan Stanley ModelWare

  ModelWare framework

  The report states that, unless otherwise noted, all metrics are based on the Morgan Stanley ModelWare framework; consensus data come from Refinitiv Estimates, and e denotes Morgan Stanley Research forecasts.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• 6862.HK

  Covered company stock

  Strengths

  Healthy traffic trends, improving y/y table turnover, strong operating leverage, disciplined cost control, and the founder's share purchase plan that conveys confidence.

  Weaknesses

  The y/y growth rate slowed at the end of March, the store network is still being adjusted, and the number of stores closed in March was higher than the combined total of new direct-operated and franchised stores opened.

  Comparison

  The target P/E is slightly above the level one standard deviation below the average valuation since 2018, reflecting recovery expectations while still retaining macro and store-opening cadence constraints.

  Risks

  Macro recovery slower than expected, demand recovery weaker than expected, slower table-turnover recovery, raw-material cost inflation, rising labor costs, or overly aggressive cost control that hurts service quality.

Key data

• Report date2026-04-12The report time is April 12, 2026, 05:10 PM GMT.
• March y/y trendStronger in the first half of the month, slowing toward month-endThe report believes this may be related to this year's later Lunar New Year holiday.
• Haidilao Hot Pot table turnover rateSlight y/y increase in March; about +4% in 2M26From the chart note.
• March openings4 direct-operated stores and 2 franchised storesDuring the same period, 10 stores were closed.
• Base valuation20x 2026e earningsThe target P/E is slightly above the level one standard deviation below the average valuation since 2018.
• Earnings growth assumption2025-2027e EPS CAGR 27%Driven by operating leverage and cost control.

Impact & implications

If the macro economy and offline consumption continue to stabilize, Haidilao's traffic and table-turnover recovery could continue, and the lower y/y base in April also supports further improvement in operating performance. If the store expansion pace shifts from cautious to more proactive, there may be room for valuation upside; however, if table-turnover recovery is slow or raw-material and labor cost pressures increase, earnings leverage and medium-term growth expectations could come under pressure.

Risks

• Macro recovery slower than expected.
• Demand recovery weaker than expected.
• Slower pace of table-turnover recovery.
• Raw-material cost inflation.
• Delays in new store openings.
• Labor cost increases faster than expected, or overly aggressive cost control that weakens service quality and affects the medium-term growth outlook.

What to watch

• Whether April operating performance benefits from a lower base.
• Whether offline consumption and macro stability continue to improve restaurant traffic.
• Whether the pace of table-turnover recovery remains sustained.
• Whether the opening pace for direct-operated and franchised stores accelerates.
• Whether the number of store closures declines and the store network re-enters a more proactive expansion phase.
• Progress in the founder/chairman/CEO Mr. Yong's subsequent share purchases.