Haidilao's Turnaround MIght Take More Time, but We Still See Long-Term Expansion Potential

We are not fond of the structure of Haidilao’s business as it doesn’t own the trademark to its namesake brand. Instead, the firm licenses the Haidilao brand from a company privately held by founder Zhang Yong. We think this model exposes Haidilao’s shareholders to additional risks and contingencies.