Summary of Key Points
More than seven months after Zhang Yong, the founder of Haidilao, returned to his role as CEO, the company's performance in the first half of 2026 showed a slight improvement (a modest increase in revenue and profit, as well as a slight rise in table turnover rates). However, a more significant change is that the issue of succession has been put on the agenda—Zhang Yong's 28-year-old son has joined the company to participate in management. Additionally, the company is advancing the construction of a central support system (the “mid-platform”) and reorganizing its structure in an effort to transform and adapt to market changes by embracing a younger approach. Nevertheless, challenges such as a slowdown in franchise expansion and the lack of successful sub-brands that have achieved significant scale remain, indicating that Haidilao’s transition of leadership is well under way.
Performance in the First Half of 2026: A Mixed Bag
In the first half of 2026, Haidilao’s revenue reached 22.337 billion yuan (a year-on-year increase of 7.9%), with core profits at 2.513 billion yuan (a year-on-year increase of 4.4%). The table turnover rate also increased from 3.8 times per day last year to 3.9 times per day, which means the restaurant can serve one more customer per day on average. Notable highlights include the rapid growth in takeaway business (2.051 billion yuan, up 121.2%) and other restaurant-related revenues (1.271 billion yuan, up 113.1%).
However, there are concerns: franchise expansion has slowed down (from 41 franchises in 2025 to 79 in 2024, and then to 99 in the first half of 2026), and the company is being cautious about its expansion strategy. Among the sub-brands, only the street-food hot pot and sushi brands are ready for scaled development, while the previously popular barbecue brand “Yanqing” has closed, and the company has not yet found a new brand that can generate stable profits.
The Deeper Goal: The Succession Process Is Underway
Zhang Yong’s return is not only about improving current performance but also about addressing the question of who will take over in the future.
- His 28-year-old son (referred to internally as “Zhang Xiaoge”) has returned from studying abroad and has already started participating in business management. Although he does not hold an official position, he made decisions regarding several store adjustments in the first half of the year, such as discontinuing the controversial pet-themed stores and relaxing hair-style restrictions for employees.
- Zhang Yong previously mentioned that his son was too young for such responsibilities, but now, eight years later, he is being given the opportunity to prove himself. Zhang Yong plans to retire at the age of 60-65 (he is currently 55, so there are 5-10 years left before that). He has also appointed four employees in their 40s as new directors, marking the gradual entry of the younger generation into the decision-making process.
Major Organizational Changes: Focusing on the Central Support System
To support the succession process and improve performance, Haidilao has initiated the construction of a central support system this year (referred to internally as the “First Year of the Mid-Platform”):
- Previously, each store was responsible for managing its own personnel, procurement, and resources. Now, the headquarters handles these tasks uniformly, allowing stores to focus solely on serving customers and managing staff. For example, the headquarters provides standardized training for employees and purchases ingredients on a centralized basis, freeing stores from these administrative burdens and enabling them to focus more on service quality.
- The number of regional divisions has been reduced from 19 in 2023, and the authority of senior executives has also been adjusted. Zhang Yong’s longtime partner, Yang Lijuan, has returned to drive the “Red Pomegranate Plan” (the company’s current key strategy), with the two working together to oversee both strategy and execution.
The Challenge of Attracting Younger Consumers
Haidilao is trying to attract younger customers, but the results have been mixed:
- The company has experimented with adding products like Wah Long spicy strips and jelly beans to the menu, collaborating with anime and gaming themes, opening night snack stores and campus locations, and even attempting to attract customers at concert venues. However, the number of customers in 2025 decreased by 7.5% (to 384 million visits).
- Zhang Yong himself acknowledges that a 60-year-old leader cannot lead a company that needs to be innovative and youthful. Therefore, he is willing to hand over power to the younger generation. The inclusion of Zhang Xiaoge is a clear signal of this shift; the minor adjustments he has made, such as relaxing hair-style restrictions, are aimed at making the brand more appealing to younger employees and consumers.
Exploring New Business Opportunities
Haidilao is seeking new growth through franchising and sub-brands, but so far, these efforts have not been successful:
- Franchising: The company opened up for franchising in 2024, but expansion has slowed down, suggesting that it may have encountered some challenges in the past (such as difficulties in management). As a result, it is being more cautious about its expansion plans.
- Sub-brands: The street-food hot pot and sushi brands are planned to grow significantly in the second half of 2026 and become sources of growth in 2027. However, other sub-brands have either failed to achieve scale (with at most a dozen stores) or have closed (such as the barbecue brand Yanqing). The new businesses are still in the trial and error phase, and no stable model has been found yet.
In summary, Haidilao is currently working to improve its performance while preparing for the transition of leadership. The younger generation is gradually taking on more responsibilities, but whether they can successfully bridge the generational gap and drive new growth will depend on the results of these ongoing efforts.