Summary of Key Points
Banu Hotpot has submitted applications to the Hong Kong Stock Exchange three times in a year, driven by the bet that it must go public by 2029 (otherwise, it will have to pay RMB 326 million to repurchase the shares and interest). The brand gained popularity by criticizing Haidilao, focusing on its products rather than services. However, its high-end image hides issues such as low ingredient costs, a large number of part-time and outsourced employees, and unpaid social security contributions. Its rapid expansion (doubling the number of stores in two years) contradicts its premium positioning, leading to declining average transaction prices and weak growth at existing stores. Additionally, with the overall downturn in hotpot stocks on the Hong Kong stock market, the Securities and Futures Commission's key questions have not been satisfactorily answered, leaving the company's listing prospects uncertain.
1. Why the Haste? The Pressure of a Bet Worth Over RMB 300 Million
Banu's urgency to submit applications stems from a binding agreement with investors: if it fails to go public by December 2029, it must repurchase their shares at an annual interest rate of 8%. The amount due, including principal and interest, has now risen to RMB 326 million. If the company doesn't list on time, it will have to pay this amount out of its own pocket. More importantly, if Banu does not resubmit its application within six months after the original deadline, investors have the right to demand a immediate repurchase. Therefore, Banu submitted its new application on the very day the previous one expired, without any delay.
Furthermore, before listing, Banu's shareholders received a dividend of RMB 70 million as a last opportunity to profit. Once the company becomes a public entity, major shareholders' share sales will be strictly regulated; if the listing fails, the money might be used for share repurchase, leaving them with no such option.
2. Rising to Fame by Criticizing Haidilao... but Nearly Losing It All
Banu initially tried to mimic Haidilao's services (such as manicures and shoe polishing), but consumers didn't recognize the "copycat" version. In 2012, it changed its strategy, renaming itself "Banu Maodu Hotpot" and emphasizing that "service is not Banu's forte; mushroom soup and maodu (a type of beef tripe) are." This move was clever, as it used Haidilao's "service" reputation to highlight its own product focus, effectively branding itself without much advertising expense.
However, the strategy almost backfired when a new slogan, "Service is not over-the-top; we pay attention to every detail," sparked criticism and forced a change. In early 2025, Du Zhongbing's live broadcast statement suggesting that people with a monthly income of RMB 5,000 shouldn't eat hotpot offended 95% of the low-income population and contradicted the brand's roots as a food associated with hardworking workers from the Three Gorges region.
3. High-End Claims, but Frugality with Employees and Ingredients
Banu claims to be "China's number one quality hotpot brand," with an average transaction price of RMB 139, higher than Haidilao's. Yet, ingredient costs account for only 30.2% of its revenue (compared to Haidilao's 40.5%), meaning consumers are paying more for less in terms of quality. Banu's "papain-treated maodu" technology is also used by Haidilao. Its sub-brand, Chao Island, was exposed for using duck meat in its mutton rolls and misrepresenting the selenium content in its selenium-rich potatoes, leading to its closure.
The labor situation is even more problematic: as of 2025, only 16.5% of Banu's employees were full-time, with 83.5% being part-time or outsourced (compared to Haidilao's 40%). With such high employee turnover, how can Banu ensure the quality of its products? Additionally, the company has owed RMB 2.7 million in unpaid social security for three years, and although the prospectus mentions improving the system, there is no evidence of actual repayment efforts, which does not align with its premium brand image.
4. Wanting Both High-End and Expansion: A Difficult Balance
Banu has doubled its store count from 86 to 200 in two years and plans to open another 177. However, high-end brands need a sense of exclusivity (e.g., Hermès doesn't have stores in every town). Yet Banu is expanding into second- and third-tier cities, where average transaction prices have dropped from RMB 150 to RMB 139, indicating potential further declines.
The performance of existing stores has also been poor: same-store sales decreased by 9.9% in 2023-2024, a figure Banu had previously avoided mentioning. In 2025, it closed 8 stores, accelerating the rate of closures. With the overall collapse of hotpot stocks on the Hong Kong market (Haidilao down more than 80%, Xibabu down 97%), investors are skeptical about hotpot companies. The more Banu expands, the more its brand value is diluted, making listing even harder.
5. Three Applications, Still No Clear Answers from the SEC
Two of Banu's prospectuses were rejected, and the Securities and Futures Commission raised nine significant questions (such as whether its product focus is genuine or just rhetoric). Without addressing these issues, the Hong Kong Stock Exchange is unlikely to approve the application. Investors are interested in real profitability and sustainability, not just empty claims about high-end quality. Now it's Banu that faces market scrutiny, not the consumers.
In Conclusion, the core conflict surrounding Banu's listing is the tension between "expansion under pressure" and maintaining its high-end image. Combined with internal issues related to products and labor practices, as well as the unfavorable Hong Kong stock market environment, whether Banu will succeed on its third attempt remains highly uncertain.