This is what you need to know about one of China’s fastest growing hotpot chains. And why its shares are down so much.
I’ll tell you what’s one of the lousiest type of industry to invest in. Restaurants.
Why? They produce one of the lowest profit margins (usually less than 10%) — high staff and rental costs.
Plus, you need to have many capable store managers to run your operations. And if there’s hygiene complaints, your restaurant gets shut down.
That’s not all.
Walk along the streets and you’ll find competing restaurants.
But there’s one restaurant business that stands out.
In fact, it’s operating a highly profitable hotpot business. This business has made a man so rich he’s one of Singapore’s richest man today.
Haidilao International (SEHK:6862) started out as a four table restaurant in Sichuan, China.