Haidilao's profit fluctuations: Can the founder's return and new business expansion help the "pomegranate mature"?

Recently, Haidilao released its 2025 financial report, attracting industry attention. As a leading player in the restaurant sector, the various actions taken by Haidilao over the past year have become a “barometer” for the Chinese dining industry, including whether the return of the restaurant founder to the front line can play a “hero’s return” role amid intensified competition and pressures on costs and performance, and what support the “Pomegranate Plan” actually offers the company, all of which have become focal points of concern for both the industry and consumers.

At the performance briefing for Haidilao’s 2025 annual report, the company’s management addressed various concerns. Regarding the issue of “increasing revenue without increasing profits,” Haidilao provided a response similar to that in the announcement: the profit fluctuations are more indicative of the phased results of strategic investments, meaning that one needs to wait for the “pomegranate flowers to bloom.” In response to the return of founder Zhang Yong, Haidilao stated that it aligns with industry evaluations, describing it as “the key to future victory under strategic restructuring.”

Is profit pressure the phased cost of proactive transformation?

According to data in the financial report, in 2025, Haidilao’s total revenue reached 43.225 billion yuan, a year-on-year increase of 1.1%, while net profit for the year was 4.042 billion yuan, reflecting a decrease. The fluctuations in profits have become a focal point of market attention. From the announcement that evening and the company’s management responses, Haidilao believes this is not a result of operational missteps but rather a proactive strategic investment made for long-term development, a necessary cost in seeking a second growth curve.

In recent years, competition in the restaurant industry has intensified. The Beijing News noted another set of data in the financial report: the number of Haidilao self-operated restaurants decreased from 1,355 to 1,304, a net decrease of 51. This also confirms the existence of such pressure. At the same time, 79 new self-operated restaurants opened during the year, indicating a slowdown in Haidilao’s expansion pace. The turnover rate, which is valued in the restaurant industry, also saw a decline in 2025.

However, alongside this “contraction,” Haidilao is simultaneously promoting differentiated operations under the “one store, one policy” strategy, having completed renovations for over 200 specialty theme restaurants. Fresh-cut stores and late-night dining establishments have achieved full coverage in key cities, while family-friendly and pet-friendly themed stores have effectively improved the operational quality of existing stores. Industry insiders believe this “proactive slimming + quality improvement” strategy, while impacting revenue and profit data in the short term, lays a solid foundation for long-term development. The company’s management also stated that product optimization, enhancing service experience, and investments in multi-brand operations and their ramp-up have all had short-term impacts on profits.

Can new businesses and new models “break through multiple lines”?

Faced with pressures to break through the “ceiling” and intensified competition, Haidilao is building new growth poles through multidimensional layouts, with franchise operations and the “Pomegranate Plan” serving as key levers. At the performance briefing, Haidilao’s management highlighted these points.

Regarding franchise operations, Haidilao’s management stated that in 2025, the number of franchise restaurants increased from 13 to 79, with 21 new franchise stores opened during the year and 45 self-operated restaurants converted to franchises, generating franchise revenue of 270 million yuan, a year-on-year increase of 15 times.

However, the Beijing News noted that Haidilao still takes a cautious approach to franchising and has not set specific expansion plans for 2026. Undoubtedly, the advancement of franchise operations has become one of Haidilao’s pathways for development. “The selection of franchisees for new stores helps us further explore new lower-tier markets and reduce expansion costs and resource inputs.”

The “Pomegranate Plan” is the core vehicle for Haidilao to incubate new brands and stimulate organizational vitality. According to publicly available data, by the end of 2025, the plan had operated 20 sub-brands and 207 stores, with the financial report showing that revenue from other restaurant operations increased by 214.6% year-on-year to 1.52 billion yuan.

Regarding new brands, Haidilao’s management maintains an attitude of “not setting specific store opening targets for entrepreneurial brands, focusing first on running store types before opening stores,” while clarifying that “extreme quality-price ratio” offerings such as seafood stalls and sushi are the main directions for the company’s future development. Based on the data disclosed at the briefing, currently, eight seafood stalls have opened nationwide, and since the sushi project opened in July 2025, the turnover rate has remained above 6, with future targets of 500 and 100 stores, respectively.

Industry insiders have also analyzed that operating multiple brands poses a significant test for the company’s organizational capabilities. Currently, Haidilao’s new brands are covering more and broader sectors, but whether any of these brands can truly “break out” still requires time to validate.

Can the founder’s return achieve “victory from afar”?

In January 2026, Haidilao announced that founder Zhang Yong would return as CEO, with former CEO Gou Yiqun stepping down.

Looking back at the timeline, Zhang Yong last held the CEO position before Haidilao went public in 2018. Since then, Haidilao has experienced rapid expansion, drastic survival measures, and the “Woodpecker Plan.” The CEO position has seen several changes, with Yang Lijuan taking over in 2022 and Gou Yiqun assuming the role in 2024. The founder’s return has sparked speculation: is the founder here to “stabilize the troops”?

At the performance briefing, Haidilao conveyed the following message: Zhang Yong is an important founder of the Haidilao Group, with a deep understanding of the company’s culture and core business, playing a crucial leadership role in the company’s strategic direction and future layout. Currently, the entire industry is in a critical period of competitive upgrade, with the company actively seeking a second growth curve. Having developed for 32 years, Haidilao is at a very important juncture. “We believe that Zhang Yong’s return as CEO will be able to more effectively unite everyone’s consensus, clarify strategic direction, and accelerate the overall business upgrade of the group, seizing important growth opportunities.”

Haidilao also stated that this adjustment “is not a significant change to existing strategies, but rather aims to achieve higher efficiency based on the original foundation.”

According to data published by the Hongcan Research Institute, in 2025, the number of hot pot restaurants decreased by 15.4% compared to 2024, and per capita annual consumption continued to decline. Emerging new categories and new brands are eating into Haidilao’s market share. Against this backdrop, industry insiders generally believe that Zhang Yong’s return is aimed at serving as a “stabilizing force,” and may even be crucial for Haidilao to anticipate the “ripening of pomegranates” in 2026.

Beijing News reporter Wang Ping

Editor Wang Lin

Proofreader Mu Xiangtong