The return of 31-year company veteran Yang Lijuan, who oversaw the hotpot chain's global operation, may be its best hope for reviving stagnating revenues and declining profits at home

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Key Takeaways:

• Haidilao announced that veteran Yang Lijuan, CEO of its overseas business, will return to the parent company, sparking a 7% jump in its shares
• The former hotpot giant's profit fell in 2025 after a big drop in customer traffic, despite shedding more than 11,000 employees

Nearly every successful business inevitably reaches an inflection point, at which time many often turn to their founding entrepreneurs for new inspiration. That's happened twice this year with former hotpot highflyer Haidilao International Holding Ltd. (6862.HK), first when founder Zhang Yong returned as CEO in January. Now, the company has turned to Zhang's "top waitress" and "firefighter" this month by bringing back Yang Lijuan from her latest posting as head of the company's overseas operation.

Haidilao's shares jumped by nearly 7% the day after the announcement last week and have held on to most of the gains since then, showing investors are hopeful that Zhang can breathe new life into the company.

Yang certainly has the credentials that could make her the right person for the task. She was previously CEO of Haidilao in 2022, when she was tasked with closing underperforming restaurants after an aggressive expansion and the pandemic caused the company to stumble. Within a year, Yang returned Haidilao from a 3.2 billion yuan ($469.3 million) loss in 2021 back to a profit of 1.6 billion in 2022, earning her the "firefighter" moniker.

Two years later, in June 2024, Yang took over at the helm of the company's global unit, Super Hi International Holding Ltd. (9658.HK, HDL.US). That unit now trades at a price to earnings (P/E) ratio of 24, higher than that the 18 for Haidilao, in classic case of an offspring outperforming its older parent. Her return comes after Super Hi reported 8% revenue growth last year as the company's profit rose 70%.

Yang is also known as Haidilao's "top waitress" and is an inspirational model for the company's thousands of front-line employees who come from similar hardscrabble backgrounds. With only a middle school education, she became a waitress at 16. After founder Zhang Yong pulled together 8,000 yuan to open the first Haidilao in Sichuan province in 1994, he recruited Yang as one of his first employees after her own tiny restaurant closed in 1995. Zhang later made her manager of his second restaurant, and looked to her as his "vanguard" when he expanded beyond Sichuan to nearby Shaanxi province.

High table turnover

At its peak in 2018, Haidilao was able to achieve impressive table turnover of five times a day, with 60% growth in both revenue and profits for the year. It became legendary for turning hotpots into a dining experience rather than just a meal, offering customers free manicures, shoeshines, snacks and "noodle dances" where waiters roamed restaurants hand-pulling fresh noodles at individual tables.

But much has changed since then. In its most recent annual results, table turnover fell to 3.9 times a day last year from 4.1 times in 2024, far below the rate in 2018. Haidilao's 2025 revenue of 43.2 billion yuan ($6.3 billion) was just 1% above 2024 and its profit fell 14% to 4 billion yuan. The weak showing was partly the result of falling customer visits to its self-operated Haidilao restaurants, which dropped by 7.5% for the year to 383.9 million.

Haidilao has tried to steady its ship by downsizing both its workforce and trimming the number of its self-operated restaurants, which typically have lower margins than franchised outlets. It laid off 11,558 employees in 2025, after cutting an even larger 16,569 in 2024. It shut down 85 low-performing self-operated restaurants, and opened 79, ending the year with 1,304 self-operated and 79 franchised restaurants.

It is staking its future on developing the higher margin franchise business as well as take-out services and new brands. These have a long way to go, however. The franchise business contributed just 0.6% of revenues in 2025, or 270 million yuan, although that was up from a negligible contribution in 2024. Haidilao's take-out business contributed 2.65 billion yuan in revenue last year, more than double 1.25 billion in 2024.

New restaurant brands contributed 1.52 billion yuan in 2025, more than triple the 483.3 million yuan in 2024, though it still made up just 3.5% of the company's revenue pie. A food ingredients business is also expanding, serving growing appetite from consumers making their own hotpots at home. That business generated 1.1 billion yuan in 2025, nearly double the 575.1 million yuan in 2024, but, again, accounting for just 2.7% of revenue last year.

Competitive market

Haidilao's new revenue streams may be critical for its survival. China's hotpot market is still growing, serving as a sort of comfort food and also popular for its social elements of group dining. But it's showing signs of slowing after years of explosive growth.

According to Hongcan Big Data, the national hotpot market was worth 639 billion yuan in 2025, up 3.5% over 2024, and is projected to rise to 670 billion yuan this year. But even as the market expanded in revenue terms last year, the number of hot pot restaurants fell by 15.3% to 448,000, according to the same source.

Haidilao isn't the only former restaurant superstar suffering, as customers constantly seek out new experiences away from the big brands. Among its peers, personal hotpot specialist Xiabuxiabu (0520.HK) has seen declining revenue and losses, while Jiumaojiu (9922.HK), known for its pots of "sauerkraut fish," saw its revenue fall and profit flatline last year.

The returning Yang Lijuan could face a challenge from Haidilao's current workforce of 125,620 employees, who are mostly a different generation from her and founder Zhang Yong. They are less interested in emotional bonding as apprentices to more experienced mentors like the system that Yang and Zhang grew up in. These workers come from middle-class backgrounds and have higher expectations of their jobs, and thus are unlikely to see their decision to work as waiters and waitresses as career moves.

The generation gap was illustrated earlier this year when an employee whistleblower complained that Haidilao was forcing him and others to buy "apology" gifts worth 500 yuan out of their own pockets when customers made complaints. The issue created a national scandal on social media, and Zhang later made a public apology and pledged to increase his stake in the company.

While Haidilao conducted an investigation and refunded some money to four employees, the story caused major reputational damage for the company, which positions itself as a purveyor of fun and family values.

That reputational damage is just one of many challenges now confronting a returning "firefighter" Yang, showing she has her work cut out for her.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.