Key Takeaways:
Banu has filed an updated prospectus to list in Hong Kong, showing it continued to post strong revenue and profit growth in the middle of this year
The hotpot chain has sharply slowed its new store openings, even as it remains committed to doubling its network in the next three years
The latest IPO prospectus from premium hotpot chain Banu International Holding Ltd. tells two different, and somewhat conflicting, stories.
On the one hand, the company is sticking by its aggressive plan to open 177 new restaurants over the next three years, the same figure it gave in its earlier filing in June that subsequently expired. That would more than double the 162 restaurants it had at the end of this September, according to its updated listing document filed on Wednesday.
But the reality seems quite different, as the company has become quite cautious with new restaurant openings lately. It actually closed a number of restaurants at the end of 2024 and start of this year, dropping its count to 145 at the end of March from 156 in September last year. The latest count of 162 shows it's returned to a growth track, though the addition of 17 restaurants in the last nine months hardly looks too impressive.
Still, the company's latest listing document shows it plans to open a net 52 new restaurants next year, climbing to 61 new openings in 2027 and 64 in 2028. Of course, 2028 is still a long way off, and the company's plans will probably change by that time.
The story here, we believe, is that investors have become used to hearing strong growth stories from Chinese companies and want to keep hearing such stories, even if the reality on the ground doesn't support such growth. That reality, for Banu and many of its peers, is that they are becoming more conservative in their expansion plans in the current slowing economy characterized by growing consumer conservatism.
But companies aren't ...
