Haidilao International (6862.HK)

Consumer · HKEX · Hong Kong

HK$12.02+2.74% today

Fundamentals

Market capHK$59.30B

P/E ratio12.6

Dividend yield6.59%

Revenue growth (YoY)+5.9%

Profit margin9.4%

Return on equity39.6%

52-week rangeHK$10.58 to HK$17.86

Valuation and ratings

DCF fair valueHK$8.55

Upside to fair value-28.9%

Analyst target (mean)HK$17.65

Analyst rangeHK$12.92 to HK$21.29

Analysts covering27

Consensus viewbuy

Moat score57/100

Overall rating43/100, Reduce

Haidilao International trades at HK$12.02, which is 29% above the HK$8.55 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.

Our moat model scores it 57 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.

It changes hands at 12.6 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.

About Haidilao International

Haidilao International Holding Ltd., an investment holding company, engages in the restaurant operation and delivery businesses in Mainland China, Hong Kong, Macau, and Taiwan. The company operates through Restaurant Operation, Delivery Business, Sales of Condiment Products and Food Ingredients, and Franchise Business segments. It also operates a Chinese cuisine restaurant under the Haidilao brand that offers hot pot cuisine. In addition, the company is involved in technology; sale of condiment products and food ingredients; hotel operation; property investment management and consulting; and trading businesses. Haidilao International Holding Ltd. was founded in 1994 and is headquartered in Beijing, the People's Republic of China.

Industry: RestaurantsEmployees: 125,620HQ: China

6862.HK passes 6 of our 30 screens today

Each screen prints the exact criteria it used, and the circumstances in which it is wrong.

Dividend powerhouses

Yields above 3%, filtered for the one thing yield screens never check: whether the company can actually afford it.

Low volatility defensives

Companies that move less than the market and pay you to wait. The holdings that let you sleep, and let you hold everything else.

Beaten down, but not broken

Good businesses whose share price has been punished. Sometimes the market is wrong. Sometimes it is early. The screen cannot tell you which.

Consumer staples

The companies that sell what people buy regardless of the economy. Dull, and dull is the entire point.

China and Hong Kong

Enormous growth, and a structure in which you may not legally own the company you think you bought. Both are true at once.

Dividend aristocrats

Companies with long, unbroken records of raising their dividend. The record is the point: it is evidence, not a promise.

Common questions

Is Haidilao International (6862.HK) undervalued?

Against our discounted cash flow estimate of HK$8.55, 6862.HK at HK$12.02 is 29% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.

What is 6862.HK's P/E ratio?

6862.HK trades at 12.6 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.

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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.