Offshore Trust Watch | HAIDILAO (06862.HK) Falls 3.02% to a New 52-Week Low; Controlling Shareholder Zhang Yong Borrows Up to RMB 100 Million from the Company

On October 13, 2026, HAIDILAO closed at HKD 9.300, down 3.02% on the day, with turnover of HKD 384 million and total market capitalisation of HKD 51.840 billion. The intraday low of HKD 8.925 marked a new 52-week low, with an amplitude of 4.54%.

On the news front, on the evening of October 12, HAIDILAO released a connected transaction announcement disclosing that the company has entered into a loan agreement with Zhang Yong, its controlling shareholder, executive Director, Chairman of the Board and Chief Executive Officer, agreeing to grant him a HKD loan facility with a principal amount of up to the equivalent of RMB 100 million, for a term of one month (i.e., 30 days), at an interest rate of one-month HIBOR plus 60 basis points. The loan is unsecured and will be disbursed in a single lump sum to an account designated by Zhang Yong within three business days after the agreement is signed; it may only be used for his personal financial arrangements and may not be used for any illegal activity, the purchase of HAIDILAO shares, the provision of loans, guarantees or financial assistance to any third party, or any purpose that violates the Listing Rules or regulatory requirements; overdue amounts are subject to a late payment charge calculated at the borrowing rate plus 2%. The announcement stated that the loan will be funded from the Group's internal resources, is expected to generate interest income for the company, and carries an interest rate higher than the company's prevailing HKD deposit rate. The announcement did not disclose the reason for Zhang Yong's borrowing.

In a report issued subsequently, Citi noted that the loan comes about five weeks after the controlling shareholder's share sale on September 8, and that the market may rekindle concerns over the controlling shareholder's funding needs, with investor sentiment expected to turn negative in the short term.

Previously, on September 9, HAIDILAO released an announcement disclosing that SP NP Ltd., a member of the controlling shareholder group, had sold 259 million shares of the company at HKD 10.62 per share through a block trade on September 8, representing approximately 4.65% of the total issued shares and raising about HKD 2.751 billion. After the sale was disclosed, HAIDILAO's share price fell more than 9% on September 9.

The announcement disclosed that SP NP Ltd. is wholly owned by UBS Trustees (B.V.I.) Limited in its capacity as trustee of Rose Trust, through UBS Nominees Limited (in its capacity as nominee of the trustee of Rose Trust). Rose Trust is a discretionary trust established by Shu Ping, as settlor and protector, for the benefit of herself, Zhang Yong and their family. Public listing documents show that Zhang Yong has also established Apple Trust, with Zhang Yong acting as settlor and protector and UBS Trustees (B.V.I.) Limited as trustee, holding interests in HAIDILAO through the BVI holding vehicle ZY NP Ltd. Both trusts were established on August 22, 2018. According to public reports, Zhang Yong and Shu Ping became Singapore citizens before the company's listing; the prospectus submitted by the company to HKEX in 2018 shows that the nationality and address of both individuals are in Singapore. This fact has been reported by media including The Paper and Cailian Press.

According to the announcement, following the sale, the controlling shareholders collectively held interests in 2,535,384,370 issued shares, representing approximately 45.49% of the total issued shares, and are entitled to control approximately 45.49% of the voting rights at the company's general meetings, exceeding 30%; the controlling shareholders will remain the controlling shareholders of the company, with control and management remaining unchanged. The controlling shareholder group comprises Zhang Yong, Shu Ping, ZY NP Ltd. and SP NP Ltd.

On the institutional front, Morgan Stanley previously described the share sale as "surprising" and estimated that the proceeds were equivalent to about 31% of the dividends received by Zhang Yong and Shu Ping since the company's listing, suggesting the move may be related to the offshore trust tax rules recently introduced in the mainland; that association has not been confirmed by the company or regulators.

On the policy front, on July 24, 2026, the Ministry of Finance and the State Taxation Administration jointly issued the Announcement on Matters Concerning Individual Income Tax on Offshore Trusts (Announcement No. 21 of 2026), bringing the entire life cycle of an offshore trust—establishment, existence and termination—into the individual income tax administration system, establishing three look-through points of establishment, existence and termination with a uniform 20% tax rate. The announcement specifies that during the existence of an offshore trust, income generated by an individual resident's offshore trust and by overseas entities held or controlled by that trust, whether actually distributed or not, is taxable to that individual resident, who must file and pay individual income tax on an annual basis. Article 6 of the announcement specifies that where, during the existence of an offshore trust of an individual resident, the individual resident becomes a non-resident individual, the taxable income is the balance after deducting the original value from the market value of the offshore trust's property on the day the individual becomes a non-resident, and individual income tax must be filed and paid. The 90-day supplementary filing window set by the announcement runs from July 24, 2026.

On the operating side, the interim results released on August 25 show that in the first half of 2026 HAIDILAO recorded revenue of RMB 22.337 billion, up 7.9% year on year; core operating profit of RMB 2.513 billion, up 4.4% year on year; and net profit attributable to shareholders of RMB 1.767 billion, up 0.5% year on year. The table turnover rate of self-operated HAIDILAO restaurants rose to 3.9 times per day from 3.8 times per day a year earlier, while average spending per customer edged down to RMB 97.0 from RMB 97.9. The delivery business was the fastest-growing segment, with first-half revenue of RMB 2.051 billion, up 121.2% year on year, and its revenue share rising to 9.2% from 4.5% a year earlier. As at the end of June, the HAIDILAO brand operated a total of 1,389 restaurants, including 1,290 self-operated restaurants and 99 franchise restaurants, with self-operated restaurants down 32 net from a year earlier; the Group also operated 183 restaurants across 21 F&B sub-brands, with first-half revenue from other restaurants of RMB 1.271 billion, up 113.1% year on year.

Citi believes that, based on the company's communications with investors, the table turnover rate was flat year on year in September, an improvement from the low-single-digit year-on-year decline in August, and that the table turnover rate during the seven-day National Day Golden Week of 2026 (October 1 to 7) edged up year on year compared with the eight-day Golden Week of 2025 (October 1 to 8), indicating initial signs of stabilisation in the business; as market expectations are relatively low, further signs of stabilisation in operations in October and November should be positive for the share price.