New Stock Preview | Hotpot Red Sea Track Welcomes the Third Hong Kong Stock Listing, Banu Hotpot IPO Awaits Examination

Recently, another hot pot brand has embarked on the journey to go public. According to the Hong Kong Stock Exchange, Banu International Holdings Limited (referred to as Banu Hotpot) has submitted an application for listing on the main board of the Hong Kong Stock Exchange, with CICC and CMB International as joint sponsors. If successful in this listing, Banu is expected to become the "third hot pot stock" on the Hong Kong Stock Exchange. According to the prospectus, while many top brands in the hot pot industry have faced declining performance and closures in recent years, Banu Hotpot has achieved continuous growth in performance, showing a positive development trend. In the increasingly competitive industry, how Banu Hotpot builds its differentiation and competitiveness to break through the intense competition will be the key focus for market investors. Entering a period of revenue growth, accelerating expansion Public information shows that in 2001, founder Du Zhongbing established Banu in Anyang, Henan, pioneering the category of beef tripe hotpot. With the ultimate pursuit of product perfection and differentiation, and featuring "beef tripe + mushroom soup" as its signature dish, Banu has become the absolute leader in the Chinese premium hot pot market. In terms of financial data, Banu has shown a stable growth in both revenue and profit in recent years, with excellent profit performance. In the financial years of 2022, 2023, 2024, the company achieved revenues of 1.433 billion, 2.112 billion, and 2.307 billion RMB respectively, with corresponding net profits of -5.19 million RMB, 102 million RMB, and 123 million RMB in the same periods. The latest announcement shows that in the first quarter of 2024, Banu achieved a revenue of 709 million RMB, a year-on-year increase of 25.7%, mainly due to the expansion of its store network; during the same period, it achieved a net profit attributable to the parent company of 55 million RMB, a year-on-year increase of 57.7%, further accelerating profit growth. At the same time, the overall operating profit margin of Banu stores has also increased, from 15.2% in 2022 to 23.7% in the first quarter of 2025. In terms of the number of stores, Banu's store count has increased from 83 in early 2022 to 145 in March 2025, with an average annual growth rate of over 30% from 2023 to 2024. In its store network, the dominance lies in lower-tier markets, with second-tier and below cities accounting for 78.6%. In terms of core operational data, Banu's average customer spend has shown a downward trend, while table turnover rate has shown an upward trend. From 2022 to the first quarter of 2025, the company's average customer spend was 147 RMB, 150 RMB, 142 RMB, and 138 RMB respectively; while the table turnover rate was 3.0 times, 3.1 times, 3.2 times, and 3.7 times in the same periods. Specifically, the drop in average customer spend is significant in first-tier cities, from 183 RMB in 2022 to 159 RMB in Q1 of 2025. It is understood that the overall customer flow of the company has shown a slight decrease, with daily customer flow in restaurants decreasing from 387 people in 2022 to 372 people in 2024, with daily customer flow in second-tier cities changing from 399 people to 391 people in 2024, and daily customer flow in third-tier and below cities changing from 354 people to 357 people. There has been a slight recovery in the first quarter of 2025, with an overall daily customer flow of 420 people. The prospectus shows that Banu's overall table turnover rate has increased from 3.0 times per day in 2022 to 3.7 times per day in the first quarter of 2025. Among them, the performance of third-tier and below cities is better, with the table turnover rate increasing from 2.8 to 3.7. In terms of supply chain development, as of 2025, Banu has established 5 comprehensive central kitchens integrating warehousing and logistics, as well as a specialized base ingredient processing factory, covering 14 provinces and municipalities in China. It is understood that in order to further penetrate lower-tier markets and strengthen supply chain capabilities in central China, Banu plans to build satellite warehouses in Henan, Shaanxi, Hubei, Hebei, Anhui, Zhejiang, and Jiangsu, with an estimated investment of about 4 to 5 million RMB for each warehouse. A hot pot "battle" - Can Banu's high-end strategy break the deadlock? Thanks to the "Boost Consumption Special Action Plan" and the recovery of consumption vitality, the first quarter of this year saw an increase in catering revenue. Data released by the National Bureau of Statistics shows that in the first quarter of 2025, the national catering revenue reached 1.4027 trillion RMB, a year-on-year increase of 4.7%. The proportion of catering consumption to the total retail sales of consumer goods reached 11.3% in the first quarter, with an increase of 0.1 percentage points compared to the total retail sales. According to data from the National Bureau of Statistics, catering revenue in March of this year reached 423.5 billion RMB, a year-on-year increase of 5.6%, with a decrease in growth rate compared to the same period last year by 1.3 percentage points; however, the catering revenue of enterprises above the designated size increased by 6.8%, a 3.6 percentage point increase from the same period last year, indicating a significant brand effect and enhanced risk resistance among scale catering enterprises. Under the backdrop of industry recovery, many once high-profile "Internet-famous" brands have faced closures and bankruptcies. In April of this year, the former "first stock of baking" CHRISTINE entered bankruptcy liquidation, brands like Xiao Chujian and Jianghudong Baiding BBQ saw a significant reduction in their store footprint, and the Shanghai store of Jingcai Zhenpin Hotpot was reported to have closed down and fled. Despite Banu Hotpot's previous good performance and continued expansion of its store network, the company may not have such an optimistic outlook in the competitive hot pot industry. It is understood that Banu Hotpot has always adhered to a high-end route for many years, focusing on beef tripe and mushroom soup as its selling point. Du Zhongbing, the founder of the company, has expressed more than once in interviews, "Banu aims to be a unique and high-quality hotpot, a more advanced and superior hotpot." However, even Banu, which adheres to a high-quality positioning, may not be able to avoid the fate of price reduction in the increasingly crowded catering industry. In the first quarter of 2025, the company's average customer spend was 138 RMB, breaking through the previous range of 140-150 RMB. Looking at the entire hot pot industry, XIABUXIABU, a brand focusing on small hotpot categories, saw a decline in performance, with revenue of 4.755 billion RMB in 2024, a year-on-year decrease of 19.65%, and a net loss of 401 million RMB. The brand closed 138 XIABUXIABU restaurants throughout the year; Tai Er Suancaiyu changed its original slogan from "Sauerkraut tastes better than fish" to "Freshness matters, being Tai Er," and introduced three core signature dishes - Luoye Suancaiyu, stir-fried fresh beef of the day, and stir-fried fresh native chicken in rapeseed oil, seemingly abandoning the previous strategy of focusing on the sauerkraut fish single product; Covcov, which follows a high-end route, saw a net loss of 353 million RMB in 2024, with the total number of stores experiencing annual negative growth for the first time, closing 73 stores within a year. As of now, the hot pot market still presents a highly decentralized competitive landscape, with Banu not holding a high market share. According to Frost & Sullivan data, Banu is the largest hot pot brand in the Chinese premium hot pot market by revenue, accounting for 3.1% of the market share in 2024; in terms of revenue, the top five hot pot brands in China collectively accounted for approximately 8.1% of the market share in 2024, with Banu ranking third in the Chinese hot pot market with a market share of about 0.4% in 2024. For the future development trajectory, Banu will continue its expansion strategy: the company plans to open approximately 52, 61, and 64 new restaurants in China from 2026 to 2028. By the end of 2028, Banu's store count will exceed 210. Based on the current performance, the positive expansion strategy is expected to continue the growth trend, and the company's profit indicators are performing well. With the recovery of the consumption environment, the company is also expected to pave the way for a differentiated high-end strategy. At this crucial time for the company's listing in Hong Kong, the market is still looking forward to Banu Hotpot telling more "new stories."