I will just introduce some key pointers here that might spark some discussion!
IPO: HDL's IPO had atttracted a lot of attention over its IPO with a lot of media coverage and speculation over its listing on the Hong Kong Exchange. This attention has probably been bolstered by its already strong presence in the F&B industry in Asia, as well as its financials. The high quality experience that most diners get also lends to it's attention. Majority of the IPO capital raised will be used for growth expansion.
Profitability: I have not done deep research into the F&B restaurant industry so I don't feel confident on how HDL's profitability matches up with its competitors. In any case, I have compared the two companies profitability metrics here. At first glance, HDL seems to be doing well for a company that is expanding very quickly, which typically has high overhead costs from expansionary activities.
Valuation: Another reason why HDL got so much attention was that the P/E ratio was 76 when they IPOed, currently the P/E Ratio is 91! To many others, this seems to make HDL overvalued. When compared to industry averages as well, this seems highly overvalued. Based on forward earnings, Simply Wall St has also concluded that shares seems overvalued based on industry comparables.
Growth Potential: HDL's astonishing growth rates is what seems to give investors the justification of HDL owning such a high P/E ratio. By the end of FY19, it expects outlets to be present in into new markets in Macau, Canada, Australia, UK, Malaysia and Vietnam. It is also partnering with Alibaba to utilised AI to improve customer experience and to look for appropriate restaurant sites.
Business Model: Hai Di Lao has focused it's business model on delivering high quality ingredients, strong customer service and interesting and unique experiences. They also have lots of complimentary services which helps them to stand out. It is this care and attention to the entire customer journey that I believe has made it so successful.
I will just introduce some key pointers here that might spark some discussion!
IPO: HDL's IPO had atttracted a lot of attention over its IPO with a lot of media coverage and speculation over its listing on the Hong Kong Exchange. This attention has probably been bolstered by its already strong presence in the F&B industry in Asia, as well as its financials. The high quality experience that most diners get also lends to it's attention. Majority of the IPO capital raised will be used for growth expansion.
Profitability: I have not done deep research into the F&B restaurant industry so I don't feel confident on how HDL's profitability matches up with its competitors. In any case, I have compared the two companies profitability metrics here. At first glance, HDL seems to be doing well for a company that is expanding very quickly, which typically has high overhead costs from expansionary activities.
Valuation: Another reason why HDL got so much attention was that the P/E ratio was 76 when they IPOed, currently the P/E Ratio is 91! To many others, this seems to make HDL overvalued. When compared to industry averages as well, this seems highly overvalued. Based on forward earnings, Simply Wall St has also concluded that shares seems overvalued based on industry comparables.
Growth Potential: HDL's astonishing growth rates is what seems to give investors the justification of HDL owning such a high P/E ratio. By the end of FY19, it expects outlets to be present in into new markets in Macau, Canada, Australia, UK, Malaysia and Vietnam. It is also partnering with Alibaba to utilised AI to improve customer experience and to look for appropriate restaurant sites.
Business Model: Hai Di Lao has focused it's business model on delivering high quality ingredients, strong customer service and interesting and unique experiences. They also have lots of complimentary services which helps them to stand out. It is this care and attention to the entire customer journey that I believe has made it so successful.