Haidilao Earnings: Cost Cuts Helped Margins but Management Remains Cautious on Near-Term Expansion

No-moat Haidilao’s first-half earnings were in line with the positive profit alert issued in July. Management maintained a cautious tone on new unit openings by not providing any guidance for this year. We fine-tuned our model but kept longer-term assumptions largely unchanged. Overall, we are maintaining our HKD 13.70 fair value estimate and view Haidilao shares as overvalued.