Investment Risk Assessment Analysis of Banu Hot Pot IPO

Based on the latest collected data and market information, I provide you with a comprehensive investment risk assessment analysis of Banu Hot Pot’s IPO:

According to market data, the Hong Kong IPO market from 2024 to 2025 showed an obvious characteristic of

[1]. Listed companies in the catering industry have performed poorly:

• Yujian Xiaomian
  (2408.HK) saw a cumulative share price drop of about 30% after listing [1]
• The market generally has low valuation multiples for traditional catering enterprises

From the perspective of peer enterprise valuation, Banu faces the dilemma of choosing a valuation reference system:

Company	Market Capitalization	P/E	ROE	YTD Share Price Performance
Haidilao (6862.HK)	79.11 billion USD	16.35x	44.26%	+4.51%[0]
Jiu Mao Jiu (9922.HK)	2.5 billion USD	55.42x	1.40%	-68.49%[0]

As an industry leader, Haidilao demonstrates stable profitability with a P/E ratio of 16.35x and ROE of 44.26% [0]. Although Jiu Mao Jiu has a high P/E ratio of 55.42x, its ROE is only 1.40%, and its share price plummeted by 68.49% during 2024-2025 [0], reflecting the market’s cautious attitude towards catering enterprises with high valuation but low profitability.

The chart shows: Haidilao (red line) rose from HK$13.98 to HK$14.61 during 2024-2025, an increase of 4.51%; while Jiu Mao Jiu (blue line) plummeted from HK$5.68 to HK$1.79, a drop of up to 68.49%. Jiu Mao Jiu’s volatility (64.90%) is also significantly higher than Haidilao’s (44.76%) [0].

If Banu uses Haidilao as a valuation reference, its expected market capitalization is between 3.3 billion and 4.7 billion yuan; however, considering its small scale and high regional concentration, the actual valuation may face downward pressure [1].

1. Social Security Arrears Issue
   : A common compliance challenge in the catering industry
2. Complexity of Equity Structure
   : May affect the transparency of corporate governance
3. Reasonableness of Large Dividends
   : Need to balance shareholder returns and capital needs for business expansion

Banu has successfully established a differentiated positioning through its signature combination of

[2]:

• Average customer spend is 138 yuan, about 40% higher than Haidilao’s (about 97.5 yuan) [1]
• The mental perception of “Go to Banu for tripe” has been initially established

However, the high-end positioning faces severe challenges:

• Continuous Decline in Average Customer Spend
  : Dropped from 142 yuan in the same period last year to 138 yuan (a 2.8% decrease) [1]
• Average customer spend dropped by 5.3% in the first quarter
  , although it improved later, the trend is still worrying [1]
• In the context of increasingly conservative consumers, extending the price range downward has become an inevitable choice

There is an obvious contradiction between the ambitious expansion plan in the prospectus and actual operations:

• Plan
  : Open 177 new stores in the next 3 years, with a net increase of over 60 stores per year from 2027 to 2028 [1]
• Reality
  : Closed multiple stores from the end of 2024 to early 2025, reducing the total number from 156 to 145 [1]
• Current Status
  : As of September 2025, there are only 162 stores, with a net increase of only 17 stores (3.8% growth) in the past 9 months [1]

This contradiction of

reflects the management’s judgment on the uncertainty of the market environment.

Highlights of data for the first 9 months of 2024:

• Revenue of 2.08 billion yuan
  , a year-on-year increase of 24.6%
• Table Turnover Rate Increased
  : From 3.1 times/day to 3.6 times/day
• Same-store Sales Growth of 4.3%
  (-9.9% for the full year of 2024)
• Restaurant Profit Margin
  Increased from 21% to 24.3%
• Net Profit of 156 million yuan
  , a year-on-year increase of 58% [1]

But the key issues are:

• Revenue growth (24.6%) is far higher than store growth (3.8%), mainly relying on
  same-store efficiency improvement
• This growth model is
  unsustainable
  in the current consumption environment
• Revenue growth in third-tier and lower cities is only 13%, far lower than the 23%+ in first and second-tier cities, indicating difficulties in expanding into the sinking market [1]

• 52 stores are located in Henan
  , accounting for about 1/3 of the total [1]
• First and second-tier cities contribute 80% of revenue and are the main growth drivers
• Same-store sales growth in third-tier cities is only 2%, with poor expansion results

• Over-reliance on the Henan base, weak risk resistance capability
• Expanding outward faces localized competition challenges
• The acceptance of high-end positioning in the sinking market is questionable

Risk Category	Risk Level	Key Issues
Valuation Risk	⚠️⚠️⚠️ High	Poor peer performance, valuation reference system failure
Consumption Downgrade Risk	⚠️⚠️⚠️ High	Continuous decline in average customer spend, high-end positioning under pressure
Expansion Risk	⚠️⚠️ Medium-High	Contradiction between plan and reality, difficulty in sinking
Regional Concentration Risk	⚠️⚠️ Medium	Over-reliance on Henan market
Compliance Risk	⚠️⚠️ Medium	CSRC concerns to be resolved

1. Short-term (0-6 months):
   Recommend
   cautious wait-and-see
   • Hong Kong market has low interest in catering IPOs
   • CSRC’s “Nine Questions” need to be properly resolved
   • Can pay attention to the risk of breaking on the first day of listing

2. Medium-term (6-12 months):
   • Core Observation Indicators:
     • Whether the average customer spend can stop falling and rebound
     • Whether the 2025 store opening target (52 stores) can be achieved
     • Profitability of stores outside Henan Province
     • Sustainability of same-store sales growth

3. Long-term Value Assessment:
   • If it can maintain a table turnover rate of 3.5+ and average customer spend stable above 135 yuan
   • Successfully replicate the model to second and third-tier cities
   • Recommend to consider entering after market sentiment warms up

Banu’s ‘Quality Hot Pot’ differentiation strategy has certain competitiveness at the product level, but in the current context of consumption downgrade and market preference for tech stocks, its . Investors should focus on its actual operating data after listing, rather than the expansion plans in the prospectus.

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[1] Yahoo Finance - “Market Prioritizes Tech Over Catering, Banu Faces Pressure to List” (December 2025)
[2] Yahoo Finance - “Mainland’s ‘Hermès of Hot Pot’ Banu to List in Hong Kong”
[0] Jinling API Data (Company Overview, Share Price Data)