China hotpot chain Haidilao soars on surge in first-half profit

BEIJING (Reuters) - Shares in Haidilao International Holding soared 16% on Monday after China's largest hotpot chain said it expected to report a 30-fold jump in first-half profit with diners returning to restaurants after the country lifted its strict COVID curbs.

The company, which is set to report results next month, said on Sunday it expects profit from continuing operations in the first half to exceed 2.2 billion yuan ($307.77 million) versus 72 million yuan last year, while revenue would rise by about 24% to 18.8 billion yuan.

Sinolink Securities said in a research note the results flagged by the company were 33% better than the market had expected, and said its move to close hundreds of stores since 2021 had helped.

Haidilao credited its profit growth to an increase in table turnover rate and improvements in how it runs its restaurants.

Earnings this year exclude Haidilao's overseas restaurants which were spun off last December into Super Hi International Holding.

The company's performance reflects a strong recovery in China's catering sector, which has been doing better than other industries such as consumer goods as people look to go out and enjoy themselves following the lifting of COVID curbs.

The world's second-largest economy grew at a sluggish pace in the second quarter, as demand remained weak at home and abroad, leading the Politburo, a top decision-making body of the ruling Communist Party, to describe the recovery as "tortuous".

Haidilao shares jumped as much as 16% on Monday to their highest in more than five months and finished up 12.2%, outpacing a 0.8% rise in the broader Hong Kong market.

($1 = 7.1481 Chinese yuan)

(Reporting by Sophie Yu and Brenda Goh; Editing by Sonali Paul)