AsianFin -- Chinese hotpot chain Banu has filed for an initial public offering on the Hong Kong Stock Exchange, aiming to become the market's third publicly listed hotpot company.
The move comes at a time of heightened activity in China's restaurant industry, with several prominent names, including Guming, Aunt Shanghai, and Mixue, recently debuting on the exchange.
Mixue surged past a 100 billion yuan ($13.8 billion) market cap shortly after listing, while Greentown Group completed its long-awaited IPO after five prior attempts. Industry watchers say the recent wave of listings marks a rare window of opportunity for consumer-facing brands to tap public capital.
But Banu's bid to join the ranks of listed peers isn't without hurdles. The company has recently faced public backlash over controversial remarks—most notably a statement advising people earning less than 5,000 yuan a month to avoid eating hotpot. Analysts are also divided on the company's financial and operational readiness.
While Banu's IPO could bolster its national ambitions, investor sentiment around restaurant listings has been cautious. Greentown's shares fell 12.5% on their first day of trading. The two existing hotpot stocks on the Hong Kong exchange haven't fared much better—Haidilao's market cap now stands at 81 billion yuan, while Xiabu Xiabu has sunk to just 749 million yuan.
Banu's scale is also relatively modest. As of its IPO filing, the company operates just 140 stores, positioning itself as a high-end player in a price-sensitive consumer market.
The company reported revenue of 1.43 billion yuan, 2.11 billion yuan, and 2.3 billion yuan for 2022, 2023, and 2024, respectively, with corresponding net profits of -5.2 million, 102 million, and 123 million yuan. Net profit margins have grown from negative territory to 5.3% over the same period. In Q1 2025, revenue jumped 25.7% year-over-year to 709 million yuan, while net profit margin rose to 7.8%.
A key driver of this growth has been table turnover. In Q1 2025, Banu reported an industry-leading turnover rate of 3.7 times per day—up from 3.2 in 2024—helped by the expansion of its 24-hour store model, now in place at 80% of its locations.
However, same-store sales fell 9.9% from 2023 to 2024, driven by a decline in average per-customer spending from 150 yuan to 142 yuan. The company attributes this to a product mix shift aimed at attracting a broader customer base.
Despite operational gains, Banu's pricing strategy continues to spark debate. The average customer spend in Q1 2025 stood at 138 yuan—well above competitors like Haidilao (97.5 yuan), Xiabu Xiabu (54.8 yuan), and even Coucou (123.5 yuan).
Banu says its premium pricing reflects high product quality, citing imported beef tripe and wild mushrooms sourced from Yunnan. However, supply chain limitations and scale constraints may also be driving up costs. Critics argue that the brand's value proposition isn't clearly visible to consumers, particularly when cooked ingredients become indistinguishable.
Compounding its pricing challenge, Banu has faced several product quality controversies. One viral incident involved "sky-high" potatoes priced at 18 yuan for five slices. Although the company offered compensation via stored-value cards, the potatoes were later found not to meet selenium content claims. Another incident involved a sub-brand serving duck meat labeled as lamb, resulting in an 8.3 million yuan penalty and the closure of four stores.
Founder Du Zhongbing's public remarks have also drawn criticism, highlighting the difficulty of aligning brand messaging with consumer expectations, especially for a high-end chain.
Banu's national expansion strategy will inevitably pit it against market leader Haidilao. According to the company’s filing, Banu employs just 1,789 full-time staff, compared to Haidilao’s 59% full-time workforce ratio, indicating potential limitations in scaling service quality.
The company recently paid out 70 million yuan in dividends, raising questions about its use of proceeds post-IPO. Moreover, given tepid investor appetite for restaurant stocks on the Hong Kong exchange, Banu may face challenges securing the valuation it seeks.
While Banu's IPO represents another milestone for China's evolving restaurant sector, its long-term success will hinge on its ability to strengthen consumer trust, scale efficiently, and compete on more than just price. As market leader Haidilao continues to dominate with its robust supply chain and customer loyalty, Banu's next chapter will test whether premium hotpot can go truly mainstream.
(Disclaimer: This article is based on publicly available information and company filings. It does not constitute investment advice.)
