On the evening of June 21st, Haidilao announced that Yang Lijuan resigned as the company's executive director and CEO, and the successor is Gou Yiqun. The change will take effect from July 1st, and in the future, Yang Lijuan will serve as the executive director and CEO of the overseas business company, TeHai International.
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Information shows that TeHai International, as the overseas business operating entity spun off by Haidilao, was listed on the Hong Kong Stock Exchange at the end of 2022. In May of this year, TeHai International had a dual listing on the Nasdaq.
With Haidilao changing leadership once again, this hotpot giant is entering a new phase of transformation.
Key Transformation Period for Haidilao with New Leadership
Yang Lijuan, known as the &#34;most powerful working girl,&#34; is also one of the executives most trusted by founder Daniel Zhang. Zhang once said, &#34;I often feel surrounded by crises and sometimes wake up in a panic!&#34; Yang Lijuan is the one who helps Zhang relieve anxiety.
In 1995, Yang Lijuan became the manager of the first Haidilao store; in 1999, she led Haidilao from Sichuan to Xi'an to expand the market; starting in 2012, Yang Lijuan served as the COO, overseeing all Haidilao store operations. At that time, Haidilao had only about 50 stores, and she led the opening of the first overseas store in Singapore. In 2018, Yang Lijuan and Daniel Zhang rang the bell together at the Hong Kong Stock Exchange. In 2022, she took over the CEO position from Daniel Zhang in a critical moment.
At the time of taking over Haidilao, the company was facing a crisis.
Founded in 1994, in the first 25 years, Haidilao's store expansion was not particularly fast. By the end of 2018, Haidilao had a total of 466 stores worldwide.
Due to misjudgment of trends, before the outbreak of the pandemic, Haidilao chose to aggressively expand. From 2019 to 2021, Haidilao opened 308, 544, and 421 stores respectively over three years.
Daniel Zhang confidently predicted, &#34;The pandemic will be over in three months,&#34; and at that time, Haidilao would be able to secure good locations at the lowest prices and benefit from the first wave of consumption recovery. The most aggressive expansion was in 2020, when Haidilao opened 544 stores, making it a major player in the catering industry with 1,298 stores.
With Haidilao's rapid expansion, its profit issues were also exposed.
In 2018, the table turnover rate at Haidilao's mainland China stores was 5.1 times per day, which dropped to 3 times per day in the first half of 2021. Around the Chinese New Year in 2018, some store managers of Haidilao told the media, &#34;In some cities, nearly half of the stores are not profitable, and the annual profits of some stores have dropped by more than 60%.&#34;
Haidilao once faced a profit dilemma. Soon, Haidilao's performance showed a situation of increasing revenue but not increasing profits. According to the 2021 financial report, Haidilao achieved revenue of 41.1 billion yuan that year, a year-on-year increase of 43.7%, but suffered a loss of 4.16 billion yuan, of which 3.65 billion yuan came from the loss provision for the disposal of long-term assets in the store closure plan
In November 2021, Haidilao made the decision to close stores, aiming to gradually shut down about 300 stores with relatively low customer traffic and underperforming business performance by December 31, 2021, launching the &#34;Woodpecker Plan&#34; led by Yang Lijuan.
Yang Lijuan stated that she hopes to effectively improve internal management through the &#34;Woodpecker Plan&#34;. Specific measures include rebuilding and strengthening certain functional departments, restoring the regional management system, and timely contracting the group's expansion plans.
In March of the following year, Yang Lijuan succeeded founder Daniel Zhang as the CEO of Haidilao, taking the lead in reform. In the second half of 2022, Haidilao internally implemented the &#34;Tough Nut Plan&#34;, mainly by reopening some previously closed restaurants. Under Yang Lijuan's strategic planning, Haidilao was saved.
In terms of performance, in the year Yang Lijuan took office, Haidilao turned losses around, achieving a profit of 1.373 billion yuan within the period, compared to a loss of 4.16 billion yuan in the same period in 2021.
In 2023, Haidilao's performance continued to improve. In 2023, Haidilao achieved an annual revenue of 41.435 billion yuan, a year-on-year increase of 33.6%; the group recorded a net profit attributable to the parent of 4.499 billion yuan, a year-on-year increase of 174.6%, exceeding pre-pandemic levels. Haidilao's table turnover rate also increased to 3.8 times per day.
On March 4th of this year, Haidilao officially announced the opening of franchising. Haidilao has now established a franchising division, with the minimum capital threshold for franchising Haidilao exceeding 10 million yuan. However, this model has been questioned by the market as a way to exploit franchisees.
The opening of franchising has become the latest reform under Yang Lijuan's leadership. With a change in leadership at Haidilao, this hotpot giant is entering a new transformation phase.
In its announcement, Haidilao stated: &#34;As the company enters the next stage of development, the group will focus on refining the fundamentals of management while promoting entrepreneurship, innovation, and digital development. Gu YiQun, one of the earliest employees of the group, will lead the implementation of these measures with stability and sustainable growth as the core.&#34;
The new CEO, Gu YiQun, has been a key member of Haidilao since January 2000, having been with Haidilao for 24 years. During his tenure at Haidilao, he has held positions such as Chief Financial Officer, Head of Information Technology, and Head of Supply Chain and Procurement Management. Records show that since February 2023, he has been serving as the Chairman of Shuhai (Beijing) Supply Chain Management Co., Ltd., and has held several important positions at Sichuan Haidilao Catering Co., Ltd.
According to &#34;China Entrepreneur&#34; magazine, at the end of 2017, Gu YiQun had already left the daily operations of Haidilao, resigning from all related positions, but never left the key decision-making center of Haidilao. Even before this CEO position adjustment, Gu YiQun had returned to Haidilao and held the position of Deputy General Manager. At an internal teamwork meeting held in mid-April this year, Gu YiQun attended and presented awards to the winning team.
At a previous Haidilao shareholders' meeting, Daniel Zhang stated, &#34;In the future, Haidilao will also consider multi-category, multi-level development, hoping that Haidilao store managers will become managers of multiple stores. For example, Haidilao store managers can also manage another type of store such as a barbecue restaurant, noodle shop, etc. In the future, one store manager can manage multiple stores, enabling resource sharing.&#34;
Under the leadership of Guo Yiqun, Haidilao has established two core committees: the Entrepreneurship and Innovation Committee and the Digital Operations Committee. The next main task for Haidilao is to seek multi-level, multi-category development, which are the two major topics left for Guo Yiqun.
In recent years, Haidilao has made many attempts in exploring the single-store model, opening themed stores with regional characteristics such as Beef Workshop, Lamb Workshop, and Seafood Workshop. They have also tried camping hot pot, campus hot pot, and corporate hot pot in various locations based on new consumption scenarios, including a collaboration with Huawei.
In terms of new brands, Haidilao has successively incubated brands such as Xiaohai Hot Pot with an average spending of 80 yuan per person, Miaoshixiong Fragrant Pot with an average spending of 50 yuan per person, and Yanqing BBQ with an average spending of 100 yuan per person, laying out various business formats including hot pot, fast food, barbecue, and Chinese-style dining.
In the low-end hot pot market, in 2023, Haidilao incubated the sub-brand &#34;Hailao Hot Pot&#34; with an average spending of 60-80 yuan per person, focusing on beef flavor and not providing dishes such as lamb, duck blood, quail eggs, and frozen tofu.
Former CEO leads the charge for &#34;Overseas Haidilao&#34; development but faces obstacles?
With the domestic catering market entering a stock competition, going overseas has become inevitable.
In 2012, Haidilao officially entered the overseas market, opening its first store in Singapore, and subsequently expanding to markets such as the United States, South Korea, and Japan.
Haitai International is the operating entity of Haidilao's hot pot overseas market, which was spun off from Haidilao in 2022 and independently listed on the Hong Kong Stock Exchange. As of the end of 2023, the actual controlling shareholders of the company are Zhang Yong and his wife Shu Ping, with a combined shareholding of 54.29%.
The latest financial report shows that as of the first quarter of 2024, Haitai International added 4 new Haidilao restaurants in the first quarter of 2024, expanding its store network to 119 stores, including 72 in Southeast Asia, 18 in East Asia, 19 in North America, and 10 in other regions. The overall average table turnover rate and same-store average table turnover rate are both 3.9 times/day, compared to 3.3 times/day in the same period of 2023.
According to a Frost &amp; Sullivan report, Haitai International is the third largest Chinese restaurant brand, and based on 2022 revenue, it is also the largest Chinese restaurant brand originating from China in the international market.
In terms of revenue, in 2023, Haitai International turned a full-year loss into a profit for the first time, with a net profit of $25.26 million and a net profit margin of 3.7%. In the first quarter of this year, Haitai International's revenue was $188 million, a year-on-year increase of 16.6%, with a net loss of $4.55 million, mainly due to a net exchange loss of $13 million.
Haitai International grew from $233 million in 2019 to $686 million in 2023, with a compound annual growth rate of 31% over 4 years.
In its appointment announcement, Haitai International stated that Yang Lijuan had led the overseas expansion of the Haidilao brand, successfully establishing a presence in Singapore and the United States in 2012 and 2013, laying the current operational foundation of the company in the international market.
Now, having Yang Lijuan in charge of the overseas sector, Haidilao's intention to expand its overseas business is evident
In fact, since its listing in Hong Kong, the core management team of Haidilao International has experienced frequent changes. In March 2023, Zhou Zhao resigned as CEO and was succeeded by Li Yu; by the end of the year, Zhou Zhao resigned as Chairman and Executive Director, and was replaced by Shu Ping as Chairman and Non-Executive Director.
Benefiting from strong overseas consumption levels, the average revenue per store of Haidilao's overseas stores outperforms that of domestic stores (2023 domestic stores: 29.69 million RMB, overseas stores: 42.27 million RMB). However, due to high labor and rental costs, the profit margins of overseas stores are weaker than those of domestic stores.
In the domestic market, based on Haidilao's brand advantage, malls provide certain rental discounts. In 2023, Haidilao's rental-related costs were only 360 million RMB, accounting for only 0.9%, significantly lower than the industry average of 22%-25%.
Due to the lack of brand awareness in overseas markets, Haidilao is unable to obtain competitive rental discounts as in the domestic market, resulting in relatively higher costs.
Raw material costs are also a major expense for Haidilao. Frost &amp; Sullivan believes that among Chinese catering companies expanding overseas, many still rely on core raw materials from China, and international logistics costs are a significant expense for catering companies, leading to further increases in raw material costs. In the first quarter of 2024, Haidilao's raw materials and consumables costs were 62.845 million USD, a year-on-year increase of 16.5%, accounting for 33.5% of revenue.
Localization is also a major challenge when entering overseas markets. Data shows that Haidilao has introduced Laksa soup base in Singapore and Malaysia, sauerkraut soup base in Singapore and Vietnam, big bone soup base and Tom Yum soup base in Thailand, continuously launching new soup base flavors, sauces, and side dishes that cater to local tastes.
Currently, Haidilao has only set up a central kitchen in Singapore, covering the manufacturing and processing of ingredients, including processing seasoned meats, cleaning and cutting vegetables, etc. In other markets, Haidilao adopts a model of direct procurement from local suppliers. Haidilao's 2023 financial report shows that the company has a total of 1,615 suppliers, with 912 in Southeast Asia.
Expanding overseas has become a popular channel for hotpot brands seeking growth. In 2023, Haidilao opened its first overseas store in Singapore, announcing the establishment of an overseas division dedicated to overseas markets; Zhu Guangyu Hotpot also initiated its overseas expansion strategy. In addition, well-known hotpot brands such as Xiaolongkan, Dalongyi, Shudaxia, Chaotianmen, and Shujiuxiang have long been laying out their strategies for overseas markets.
In overseas markets, facing homogenized competition with similar dishes and hotpot scenes, Haidilao needs to focus on &#34;price&#34; and &#34;service&#34; to tackle this tough challenge

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Haidilao announced a change in leadership, with Yang Lijuan resigning as CEO and being succeeded by Gou Yiqun. Yang Lijuan will serve as the Executive Director and CEO of Haidilao's overseas business company, Special Sea International. Special Sea International is the operating entity for Haidilao's overseas business and was listed on the Hong Kong Stock Exchange and Nasdaq in 2022. Haidilao, after rapid expansion, faced profitability issues. This change in leadership signifies a new transformation period for Haidilao

Haidilao changes its leadership again, "the most powerful part-time girl" heads to "Overseas Haidilao"