Chinese Hotpot Chain Haidilao Starts Long-Term Succession Planning
Liao Shumin
DATE:  Apr 28 2020
/ SOURCE:  Yicai
Chinese Hotpot Chain Haidilao Starts Long-Term Succession Planning Chinese Hotpot Chain Haidilao Starts Long-Term Succession Planning

(Yicai Global) April 28 -- Chinese hotpot chain Haidilao International Holding is opening up the line of succession to its employees through a point scoring system as its founders prepare to retire within the next 15 years.

By fostering talent within the firm, Haidilao is ensuring it has the right people in place to replace Chairman Zhang Yong and his fellow co-founders Shi Yonghong, Gou Yiqun and Yang Xiaoli upon their retirement, Zhang said in an open circular yesterday.

Last October, Haidilao capped senior managers’ salaries and asked them to take on additional tasks such as finance, new technology and procurement or to practice so-called intrapreneurship, where employees act as entrepreneurs within an organization, in order to earn a higher wage.

“Each time you take on a new duty, Haidilao will give you points,” Zhang said. “Each time the firm needs to promote a manager, it will look for the people with the most points and will choose the best.”

Set up in 1994 in Sichuan, a province famed for its spicy cuisine, Haidilao quickly expanded into a vast chain of hotpot restaurants spanning the world. The firm listed on the Hong Kong stock exchange in September 2018 with a market valuation of almost HKD100 billion (USD13 billion).

Business has been good. Last year, the Beijing-based firm posted a 42.5 percent rise in net profit to CNY2.3 billion (USD324.5 million), according to its annual earnings report released on March 25. Revenue jumped 56.5 percent to CNY26.6 billion (USD3.8 billion).

But Haidilao is likely to suffer losses of around CNY5 billion due to the Covid-19 outbreak, brokerage China Securities said. The chain was forced to close all its restaurants in the Chinese mainland on Jan. 26. Most had re-opened by March 12, but it is still too early to reasonably estimate the financial impact of the epidemic, the company said.

Haidilao's stock price [HKG:6862] closed 1 percent higher today at HKD33.25 (USD4.29).

Editor: Kim Taylor

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Keywords:   Haidilao,hotpot chain