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    Is Haidilao’s Removal From the Hang Seng China Enterprises Index Altering Its Investment Case (SEHK:6862)?

    Simply Wall St·12/11/2025 07:19:52
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    • Haidilao International Holding Ltd. was removed from the Hang Seng China Enterprises Index on 5 December 2025, altering its status within one of Hong Kong’s key benchmark indices.
    • This index removal matters because it can prompt forced buying and selling by index-tracking funds, potentially reshaping Haidilao’s shareholder base and trading profile.
    • Next, we will examine how Haidilao’s exit from the Hang Seng China Enterprises Index influences its investment narrative and perceived market positioning.

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    What Is Haidilao International Holding's Investment Narrative?

    To hold Haidilao today, you need to believe in its ability to convert a well-known hotpot brand, solid profitability and high return on equity into steady, if slower, earnings growth while managing an increasingly demanding operating backdrop. The recent removal from the Hang Seng China Enterprises Index mostly looks technical so far, with no sharp price reaction, but it could still affect short term liquidity and amplify trading swings around results or dividend announcements. More structurally, the key near term catalysts remain execution under the relatively new CEO, any progress on digitalisation and cost efficiency, and how management balances high dividends with earnings that are growing more slowly than in the past. The main risks center on margin pressure, intense competition and the sustainability of those generous payouts.

    However, investors also need to recognise how dividend policy could constrain future financial flexibility. Haidilao International Holding's shares have been on the rise but are still potentially undervalued by 23%. Find out what it's worth.

    Exploring Other Perspectives

    SEHK:6862 1-Year Stock Price Chart
    SEHK:6862 1-Year Stock Price Chart

    Four Simply Wall St Community fair value views range from HK$7.99 to a very large HK$36.10, underlining how far apart expectations can be. When you set that against Haidilao’s index removal and questions around dividend sustainability, it becomes clear that understanding both the upside narratives and the funding risks is essential before forming your own view.

    Explore 4 other fair value estimates on Haidilao International Holding - why the stock might be worth 43% less than the current price!

    Build Your Own Haidilao International Holding Narrative

    Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.