Haidilao (海底捞)'s debt — Zhang Yong (张勇) repaid it 10 minutes ago

Debt redemption as a signal

It has been reported that Zhang Yong (张勇), moments after resuming the CEO role, completed the redemption of the remaining $285 million from a $600 million US-dollar bond issued in 2021. The repayment — formally scheduled but personally executed by Zhang on his return — is both practical and symbolic: a public clearing of past obligations ahead of a strategic reset at Haidilao (海底捞) (06862.HK). Revenue ticked up only 1.1% to RMB 43.2 billion in 2025, while profit fell 14% to RMB 4.1 billion. The company’s core restaurant business is under strain: operating income from restaurants declined 7.1% year-on-year.

From aggressive expansion to retrenchment

The 2021 bond financed the company’s aggressive post‑pandemic roll‑out — nearly 850 new stores in 18 months — a bet that did not pay off. Reportedly Zhang was overly optimistic about a quick recovery; the boom turned into a painful correction that produced a near-record loss and prompted leadership changes in 2022. The shortfall forced Haidilao to close more than 300 underperforming outlets under the interim management, exposing how much the group’s franchise-like “family” culture depends on continuous growth to reward staff and support its apprenticeship promotion system.

Red Pomegranate (红石榴计划): promise and problems

Haidilao’s answer has been to seek a second growth engine. Delivery surged 111.9% and the Red Pomegranate (红石榴计划) initiative — an internal incubation program for new restaurant brands — delivered 214.6% revenue growth for its cohort, producing 20 named sub‑brands and 207 restaurants. Yet insiders and outside observers note mixed results: many incubated concepts have folded, and the two best performers were not pure internal successes. The group has revised incubation into a dual “Chef‑led / Common‑people restaurant” model — a sign that the company is moving away from purely bottom‑up internal entrepreneurship toward more centrally managed, market‑oriented rollouts.

The hard work ahead

Haidilao faces structural constraints: a service‑intensive model that resists full digitization, persistently high labour costs (employee expenses have stayed above 30% of revenue) and rising raw material bills. Clearing the 2021 bond may calm creditors and Hong Kong investors, but can a single repayment buy the organizational latitude to break from three decades of culture? Zhang’s repayment is a statement of authority. Now he must deliver the tougher task: convert past liabilities and internal loyalties into scalable, higher‑margin growth — and fast.