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1、F-1 1 tm2331649-12_f1.htm F-1TABLE OF CONTENTSAs filed with the Securities and Exchange Commission on April 26,2024Registration No.333-SECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549 FORM F-1REGISTRATION STATEMENTUNDERTHE SECURITIES ACT OF 1933 SUPER HI INTERNATIONAL HOLDING LTD.(Exact name o

2、f Registrant as specified in its charter)Not Applicable(Translation of Registrants name into English)Cayman Islands(State or other jurisdiction ofincorporation or organization)5812(Primary Standard IndustrialClassification Code Number)Not Applicable(I.R.S.EmployerIdentification No.)1 Paya Lebar Link

3、,#09-04PLQ 1 Paya Lebar QuarterSingapore 408533+65 6378 1921(Address,including zip code,and telephone number,including area code,of Registrants principal executive offices)Cogency Global Inc.122 East 42nd Street,18th FloorNew York,New York 10168(212)947-7200(Name,address,including zip code,and telep

4、hone number,including area code,of agent for service)Copies to:Mengyu Lu,Esq.Samantha Peng,Esq.Ming Kong,Esq.Ashlee Wu,Esq.Kirkland&Ellis International LLPc/o 26th Floor,Gloucester TowerThe Landmark15 Queens Road CentralHong Kong+852 3761 3300 Raymond Li,Esq.Steven Hsu,Esq.Paul Hastings LLP22/F Bank

5、 of China Tower,1 Garden Road,CentralHong Kong+852 2867 1288 Christopher DeCresce,Esq.Paul Hastings LLP200 Park AvenueNew York,New York 10166+1 212 318-6000 Approximate date of commencement of proposed sale to the public:as soon as practicable after the effective date of this registration statement.

6、If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under theSecurities Act of 1933,check the following box.If this Form is filed to register additional securities for an offering pursuant to Rule 462(b)under the Securities A

7、ct,please check thefollowing box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.If this Form is a post-effective amendment filed pursuant to Rule 462(c)under the Securities Act,check the following box and list theSecuri

8、ties Act registration statement number of the earlier effective registration statement for the same offering.If this Form is a post-effective amendment filed pursuant to Rule 462(d)under the Securities Act,check the following box and list theSecurities Act registration statement number of the earlie

9、r effective registration statement for the same offering.Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.Emerging growth company If an emerging growth company that prepares its financial statements in accordance with U.

10、S.GAAP,indicate by check mark if theregistrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards providedpursuant to Section 7(a)(2)(B)of the Securities Act.The Registrant hereby amends this Registration Statement on such date

11、or dates as may be necessary to delay its effective date until theRegistrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordancewith Section 8(a)of the Securities Act of 1933 or until the Registration Statement sha

12、ll become effective on such date as the Securities and ExchangeCommission,acting pursuant to said Section 8(a),may determine.The term“new or revised financial accounting standard”refers to any update issued by the Financial Accounting Standards Board to itsAccounting Standards Codification after Apr

13、il 5,2012.(1)TABLE OF CONTENTSSubject to Completion.Dated,2024.American Depositary SharesSUPER HI INTERNATIONAL HOLDING LTD.Representing ordinary sharesWe are offering American depositary shares,or ADSs.Each ADS represents of our ordinaryshares,par value US$0.000005 per share.This is our initial pub

14、lic offering in the United States,and no public market currently exists for our ADSs.Ourordinary shares have been listed on The Stock Exchange of Hong Kong Limited(the“HKEx”)since December 30,2022under the stock code“9658.”On ,the closing sale price of our ordinary shares on the HKEx wasHK$per share

15、,equivalent to a price of US$per ADS,assuming an exchange rate of US$1.00to HK$.The offering price of our ADSs will be determined by reference to the closing price of our ordinary shares on theHKEx on the prior trading day to the pricing date,after taking into account prevailing market conditions an

16、d throughnegotiations between us and the underwriters.For a discussion of factors considered in determining the price to thepublic of the ADSs,see“Underwriting”in this prospectus.After pricing of the offering,we expect that the shares will trade on the Nasdaq Stock Market under the symbol“HDL.”We be

17、lieve that upon the completion of this offering,we will meet the standards for listing on the Nasdaq StockMarket,and the closing of this offering is contingent upon such listing.We are an“emerging growth company”under applicable U.S.federal securities laws and are eligible for reducedpublic company

18、reporting requirements.As of the date of this prospectus,entities controlled by Mr.Yong Zhang collectively owns 47.64%of ouroutstanding shares.As the largest shareholder of our company,Mr.Yong Zhang,who is the spouse of Ms.Ping Shu,ourdirector and chairman of the board of directors,has substantial i

19、nfluence over our business.Investing in our ADSs involves risks that are described in the“Risk Factors”section beginning on page 14 of thisprospectus.PRICE US$PER ADSNeither the United States Securities and Exchange Commission nor any other regulatory body has approved ordisapproved of these securit

20、ies or passed upon the accuracy or adequacy of this prospectus.Any representation to thecontrary is a criminal offense.Per ADS Total Initial public offering price US$US$Underwriting discount and commissions US$US$Proceeds,before expenses,to us US$US$See“Underwriting”for additional information regard

21、ing compensation payable by us to the underwriters.The underwriters have a 30-day option to purchase up to an additional ADSs from us at the initialpublic offering price less the underwriting discount.The underwriters expect to deliver the ADSs to purchasers on or about,2024.Morgan Stanley Huatai Se

22、curities Prospectus dated,2024.The information in this preliminary prospectus is not complete and may be changed.We may not sell these securities until the registration statement filed with theSecurities and Exchange Commission is effective.This preliminary prospectus is not an offer to sell these s

23、ecurities and we are not soliciting offers to buy thesesecurities in any state where the offer or sale is not permitted.(1)TABLE OF CONTENTSTABLE OF CONTENTSTABLE OF CONTENTSTABLE OF CONTENTSTABLE OF CONTENTSTABLE OF CONTENTS TABLE OF CONTENTS Page PROSPECTUS SUMMARY 1 THE OFFERING 10 SUMMARY CONSOL

24、IDATED FINANCIAL DATA 12 RISK FACTORS 14 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 45 USE OF PROCEEDS 47 DIVIDEND POLICY 48 CAPITALIZATION 49 DILUTION 50 ENFORCEABILITY OF CIVIL LIABILITIES 52 CORPORATE HISTORY AND STRUCTURE 56 PRICE RANGE OF OUR ORDINARY SHARES 57 SELECTED CONSOLIDATED FINA

25、NCIAL DATA 58 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS 60 INDUSTRY 81 BUSINESS 84 REGULATION 103 MANAGEMENT 126 PRINCIPAL SHAREHOLDERS 134 RELATED PARTY TRANSACTIONS 137 DESCRIPTION OF SHARE CAPITAL 138 DESCRIPTION OF AMERICAN DEPOSITARY SHARES 151 CONVERSI

26、ON BETWEEN ORDINARY SHARES AND ADSs 163 SHARES ELIGIBLE FOR FUTURE SALE 166 TAXATION 168 UNDERWRITING 176 EXPENSES RELATED TO THIS OFFERING 187 LEGAL MATTERS 188 EXPERTS 189 WHERE YOU CAN FIND ADDITIONAL INFORMATION 190 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS F-1 We have not authorized anyone to

27、provide any information other than that contained in this prospectusor in any free writing prospectus prepared by or on behalf of us or to which we may have referred you.Wetake no responsibility for,and can provide no assurance as to the reliability of,any other information thatothers may give you.W

28、e and the underwriters have not authorized any other person to provide you withdifferent or additional information.We are offering to sell,and seeking offers to buy the ADSs,only injurisdictions where offers and sales are permitted.The information contained in this prospectus is accurateonly as of t

29、he date of this prospectus,regardless of the time of delivery of this prospectus or any sale of theADSs.We have not taken any action to permit a public offering of the ADSs outside the United States or topermit the possession or distribution of this prospectus outside the United States.Persons outsi

30、de the United iTABLE OF CONTENTS States who come into possession of this prospectus must inform themselves about and observe anyrestrictions relating to the offering of the ADSs and the distribution of the prospectus outside the UnitedStates.Until,2024(the 25th day after the date of this prospectus)

31、,all dealers that buy,sell or tradeADSs,whether or not participating in this offering,may be required to deliver a prospectus.This is in additionto the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsoldallotments or subscriptions.iiTABLE OF CON

32、TENTS PROSPECTUS SUMMARYThe following summary is qualified in its entirety by,and should be read in conjunction with,the moredetailed information and financial statements appearing elsewhere in this prospectus.In addition to thissummary,we urge you to read the entire prospectus carefully,especially

33、the risks of investing in the ADSsdiscussed under“Risk Factors,”before deciding whether to invest in the ADSs.This prospectus containsinformation from an industry report dated December 15,2023 commissioned by us and prepared by Frost&Sullivan,an independent research firm,regarding the industry we op

34、erate in and our market position.Werefer to this report as the“Frost&Sullivan Report.”Our MissionOur mission is to build the leading global Chinese restaurant brand and to propagate Chinese culinaryheritage.OverviewWe are a leading Chinese cuisine restaurant brand,operating Haidilao hot pot restaura

35、nt in theinternational market.With roots in Sichuan from 1994,Haidilao has become one of the most popular andlargest Chinese cuisine brands in the world.Since opening our first restaurant in Singapore in 2012,wehave expanded to 115 self-operated restaurants in 12 countries across four continents as

36、of December 31,2023.According to the Frost&Sullivan Report,we were the third largest Chinese cuisine restaurant brandand the largest Chinese cuisine restaurant brand originating from China in the international market in termsof 2022 revenue.Food is an expression of cultural identity,values and a way

37、 of life.Chinese cuisine is one of the richestand most diverse culinary heritages in the world,among which hot pot is one of the most popular andfastest-growing segments.In 2022,the international market for Chinese hot pot had a market size ofUS$34.3 billion.With almost 30 years of brand history,we

38、believe that,based on our industry experience,Haidilao is well-loved by guests for its unique dining experiencewarm and attentive service,greatambiance and delicious food,standing out among global restaurant chains,which has made our Haidilaorestaurants into a worldwide cultural phenomenon.With a br

39、and recognition that precedes our presence,which we believe is based on our years ofindustry experience,we uphold Haidilaos core values,enabling us to steadily expand in the internationalmarket.Striking a balance between honoring the Haidilao legacy and continuous innovation for localizationhas been

40、 the foundation of our growth and expansion in the international market.Brand legacy.Leveraging the Haidilao brand with approximately 30 years of cultivation and ourextensive experience in standardized restaurant operations,we effectively address challenges faced ininternational expansion through im

41、plementing our proven management philosophy of“aligned interests anddisciplined management.”Aligned interests.We believe that our motivated employees lay the foundation for satisfied guests.Under our management philosophy,the interests of our employees are highly aligned to ours,therebydriving our b

42、ottom-up dynamic growth.We believe that this principle appeals to human nature acrossdifferent cultures and regions and has been proven in Haidilaos expansion in the internationalmarkets.Disciplined management.Our disciplined management systematically ensures high-quality expansionthrough standardiz

43、ed operations by our headquarters controlling operational risks and providing keyresources and support to our restaurants.We maintain strict control over key aspects of restaurantoperations,including restaurant network expansion,employee training and promotion,food safety,service quality control and

44、 supply chain management.Localization.Under the framework of standardized operations and guided by core Haidilao values,weseek to adapt restaurant operations to local customs,tastes and preferences in order to provide a uniquedining experience to guests and incentivize employees in different countri

45、es.We continue to innovate in thefollowing respects.1TABLE OF CONTENTS Food and menu.We continuously develop and launch new menu items(including food ingredients,soup bases and dipping sauces)tailored to local tastes and preferences.Generally,a significantportion of our menu in each restaurant is lo

46、calized.Guest services.We give employees the autonomy to discover how to best serve our guests andencourage them to adjust how we effectuate warm and personalized services based on local customsand cultural norms.Management structure.We have established a multi-layer structure involving our headquar

47、ters,senior regional managers and restaurant managers.Our headquarters hold control over criticalrestaurant management functions.Our senior regional managers who act as key roles for restaurantoperations in a certain region determined by our headquarters,are responsible for overallmanagement and str

48、ategies implementation within the region.Our restaurant managers areresponsible for managing the day-to-day operations of our restaurants.Benefiting from our proven management philosophy and successful localization efforts,we have builtan international Haidilao restaurant network with highly standar

49、dized operations,effective managementsystems and motivated employees.We have achieved strong growth and margin expansion in the pastthree years.Restaurant network expansion.Our number of restaurants increased from 74 restaurants as ofJanuary 1,2021 to 115 restaurants as of December 31,2023.While we

50、primarily focused on theexpansion within existing countries and enhancing their operating performance over the past threeyears,we keep exploring new markets and have opened our first restaurant in the United ArabEmirates in the first half of 2023.Same-store sales growth.Alongside our continual resta

51、urant network expansion,we have alsoachieved meaningful same-store sales growth of 54.0%and 8.8%in 2022 and 2023,respectively.Table turnover rate.Our overall table turnover rate improved from 2.1 times per day in 2021 to3.3 times per day in 2022,and further improved to 3.5 times per day in 2023.Aver

52、age daily revenue per restaurant.Our average daily revenue per restaurant increased fromUS$10.0 thousand in 2021 to US$15.4 thousand in 2022,and further increased to US$16.3 thousandin 2023.Income from operation margin.Our income from operation margin improved from 0.2%in 2022 to6.3%in 2023.Restaura

53、nt level operating margin.Our restaurant level operating profit margin significantly improvedfrom 4.1%in 2022 to 9.0%in 2023.StrengthsWe believe that the following strengths have contributed to our historical growth and will drive ourfuture development:A leading Chinese cuisine restaurant brand in t

54、he international market;Haidilao as a global cultural phenomenon and an ambassador of Chinese culinary heritage;Strong local know-how and international operating capabilities;Proven management philosophy that enables sustainable international expansion;andSeasoned management team with a corporate cu

55、lture that prescribes acting with kindness.Growth StrategiesWe intend to implement the following business strategies going forward:Continue to grow our international Haidilao brand,enhance our dining experience and propagateChinese culinary heritage internationally;Enhance restaurant performance and

56、 explore new sources of revenue;2*TABLE OF CONTENTS Strategically optimize and expand our restaurant network;andIdentify opportunities for organic growth and seek potential acquisition opportunities.Corporate History and StructureWe commenced our restaurant business operations outside Greater China

57、in 2012 through HaidilaoInternational Holding Ltd.(“HDL Group”),our then-parent company and a public company listed on theHKEx(HKEx:6862).Since opening our first restaurant in Singapore in 2012,we have expanded to115 restaurants in 12 countries across four continents as of December 31,2023,including

58、 Singapore,Thailand,Vietnam,Malaysia,Indonesia,Japan,Korea,the United States,Canada,the United Kingdom,Australia and the United Arab Emirates.We currently do not have restaurant business operations in GreaterChina(which includes mainland China,Hong Kong,Macau and Taiwan),and,when as part of HDL Grou

59、p,did not have restaurant business operations in Greater China.In 2022,we consummated a series of business and corporate reorganization transactions(the“GroupReorganization”)in connection with the listing of our ordinary shares on the HKEx in December 2022(the“Hong Kong Listing”).As part of the Grou

60、p Reorganization,we established SUPER HI INTERNATIONALHOLDING LTD.,our holding company incorporated under the laws of the Cayman Islands,in May 2022.Upon completion of the Group Reorganization and immediately prior to the consummation of the HongKong Listing in December 2022,all of HDL Groups restau

61、rant business operations outside Greater Chinawere held by SUPER HI INTERNATIONAL HOLDING LTD.Our ordinary shares have been listed on the HKEx since December 30,2022 under the stockcode“9658.”The Hong Kong Listing of our ordinary shares was achieved through HDL Groupsdistribution(the“Distribution”)o

62、f 100%of its equity interest in SUPER HI INTERNATIONAL HOLDINGLTD.to qualified holders of HDL Groups ordinary shares as of the close of business on the record date ofDecember 20,2022(the“Record Date”)in proportion to their respective shareholding in HDL Group.Eachqualified holder of HDL Groups ordin

63、ary shares of record received one ordinary share of our company forevery ten shares of HDL Groups ordinary shares that it held on the Record Date.Following theDistribution,we became an independent,publicly-traded company and HDL Group retains no ownershipinterest in our company.See note 2 to our aud

64、ited consolidated financial statements included elsewhere inthis prospectus for more details.The following diagram illustrates our corporate structure,including our principal subsidiaries,as of thedate of this prospectus:The diagram above omits the names of subsidiaries that are insignificant indivi

65、dually and in the aggregate.Summary of Risk FactorsInvesting in our ADSs involves significant risks.You should carefully consider all of the information inthis prospectus before making an investment in our ADSs.Set forth below is a summary of the principalrisks we face,organized under relevant headi

66、ngs.These risks are discussed more fully in the section titled“Risk Factors.”3TABLE OF CONTENTS Risks Related to Our Business and IndustryWe incurred net losses in 2021 and 2022.Our historical financial and operating results may not beindicative of our future performance.Our multi-jurisdiction opera

67、tions may lead to increasing risks and uncertainties and our managementsystem may not be effective to address risks and uncertainties in our international restaurantoperations.If we fail to retain existing guests or attract new guests,our financial condition and businessoperations may be materially

68、and adversely affected.Our continued success depends on our ability to deliver and maintain our high-quality services anddining experience.We face risks related to the instance of any food safety incidents and any food-borne illnesses.We may fail to maintain or enhance brand recognition or reputatio

69、n.We will continue to expand our restaurant network,which may increase risks and uncertainties.We face intense competition in the international market for catering services.Uncertainties relating to the growth of the international market for Chinese cuisine restaurants,especially the hot pot market,

70、could adversely affect our revenues and business prospects.Rising interest rates could negatively impact our performance and restaurant expansion plans.General Risks Related to Our ADSs and This OfferingAn active trading market for the ADSs may not develop and the trading price for the ADSs mayfluct

71、uate significantly.We are an emerging growth company within the meaning of the Securities Act and may takeadvantage of certain reduced reporting requirements.Implication of Being an Emerging Growth CompanyAs a company with less than US$1.235 billion in revenue for our last fiscal year,we qualify as

72、an“emerging growth company”pursuant to the Jumpstart Our Business Startups Act of 2012,as amended,orthe JOBS Act.An emerging growth company may take advantage of specified reduced reporting and otherrequirements compared to those that are otherwise applicable generally to public companies.Theseprovi

73、sions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth companys internal control over financialreporting.The JOBS Act also provides that an emerging growth company does not need to comply with anyn

74、ew or revised financial accounting standards until such date that a private company is otherwise required tocomply with such new or revised accounting standards.We will remain an emerging growth company until the earliest of(a)the last day of the fiscal yearduring which we have total annual gross re

75、venues of at least US$1.235 billion;(b)the last day of our fiscalyear following the fifth anniversary of the completion of this offering;(c)the date on which we have,duringthe preceding three-year period,issued more than US$1.0 billion in non-convertible debt;or(d)the date onwhich we are deemed to b

76、e a“large accelerated filer”under the Securities Exchange Act of 1934,asamended,or the Exchange Act,which would occur if the worldwide market value of our common equitythat are held by non-affiliates exceeds US$700 million as of the last business day of our most recentlycompleted second fiscal quart

77、er.Once we cease to be an emerging growth company,we will not be entitledto the exemptions provided in the JOBS Act discussed above.Implication of Being a Foreign Private IssuerWe are a foreign private issuer within the meaning of the rules under the Exchange Act,and as such weare exempt from certai

78、n provisions of the securities rules and regulations in the United States that areapplicable to U.S.domestic issuers.Moreover,the information we are required to file with or furnish to the 4(1)(2A)(2B)(3)(4A)(4B)TABLE OF CONTENTS SEC will be less extensive and less timely compared to that required t

79、o be filed with the SEC by U.S.domestic issuers.In addition,as an exempted company incorporated in the Cayman Islands,we arepermitted to adopt certain home country practices in relation to corporate governance matters that differsignificantly from the Nasdaq Stock Market Rules.See“Risk FactorsRisks

80、Related to the ADSs and thisOfferingAs an exempted company incorporated in the Cayman Islands,we are permitted to adopt certainhome country practices in relation to corporate governance matters that differ significantly from the NasdaqStock Markets corporate governance requirements;these practices m

81、ay afford less protection toshareholders than they would enjoy if we complied fully with the Nasdaq Stock Markets corporategovernance requirements.”Corporate InformationOur principal executive offices are located at 1 Paya Lebar Link,#09-04,PLQ 1 Paya Lebar Quarter,Singapore 408533.Our telephone num

82、ber at this address is+65 6378 1921.Our registered office in theCayman Islands is located at the offices of Conyers Trust Company(Cayman)Limited,Cricket Square,Hutchins Drive,PO Box 2681,Grand Cayman,KY1-1111,Cayman Islands.Investors should submit anyinquiries to the address and telephone number of

83、our principal executive offices.Our main website ishttp:/.The information contained on our website is not a part of thisprospectus.Our agent for service of process in the United States is Cogency Global Inc.Annual General Meeting of Our CompanyThe annual general meeting of our company will be held b

84、y way of virtual meeting via online platformat 10:00 a.m.(Hong Kong time)on June 12,2024.As such,the transfer books and register of members willbe closed from June 6,2024 to June 12,2024,both days inclusive to determine the entitlement of theshareholders to attend the above meeting,during which peri

85、od no transfer of our ordinary shares can beregistered.All transfers accompanied by the relevant share certificates must be lodged with our branch shareregistrar in Hong Kong,Computershare Hong Kong Investor Services Limited,at Shops 1712-1716,17th Floor,Hopewell Centre,183 Queens Road East,Wanchai,

86、Hong Kong not later than 4:30 p.m.onJune 5,2024(Hong Kong time).Set forth below is a summary of the resolutions that are proposed and will be voted on at the annualgeneral meeting:Ordinary ResolutionsTo receive,consider and adopt the audited consolidated financial statements of our company andour su

87、bsidiaries and the reports of our directors and auditor for the year ended December 31,2023.To re-elect Ms.Ping Shu as a non-executive director,Mr.Anthony Kang Uei Tan as anindependent non-executive director,and Mr.Jown Jing Vincent Lien as an independent non-executive director;andTo authorize our b

88、oard of directors to fix remuneration of our directors.To re-appoint Deloitte&Touche LLP as the auditor of our company and authorize our board tofix remuneration of auditor.To give a general and unconditional mandate to our directors to allot,issue and deal with ordinaryshares(including any sale and

89、 transfer of shares out of treasury that are held as treasury shares)not exceeding 20%of the number of issued shares of our company(excluding any ordinary sharesthat are held as treasury shares).To give a general and unconditional mandate to our directors to repurchase our ordinary sharesnot exceedi

90、ng 10%of the number of issued shares of our company(excluding any shares that areheld as treasury shares).5(4C)(5)TABLE OF CONTENTS To extend the authority given to our directors pursuant to the ordinary resolution No.4A to issueshares by adding to the number of issued shares of our company the numb

91、er of sharesrepurchased under the ordinary resolution No.4B.Special ResolutionsTo consider and approve the proposed amendments to the articles of association of our company.The following table summarizes the proposed articles amendments.Article No.or Page No.Proposed amendments(showing changes to ou

92、r currently effective articles of association)Article 2(1)“Act”the Companies Act,(2022 Revision),Cap.22 of the Cayman Islandsand any amendments thereto or re-enactments thereof for the time being in force andincludes every other law incorporated therewith or substituted therefor.Article 150.Subject

93、to due compliance with all applicable Statutes,rules and regulations,including,without limitation,the Listing Rules,and to obtaining all necessary consents,if any,required thereunder,the requirements of Article 149 shall be deemed satisfied inrelation to any person by sending to the person in any ma

94、nner not prohibited by theStatutes,summarised financial statements derived from the Companys annual accountsand the directors report which shall be in the form and containing the informationrequired by applicable laws and regulations,provided that any person who is otherwiseentitled to the annual fi

95、nancial statements of the Company and the directors reportthereon may,if he so requires by notice in writing served on the Company,demand thatthe Company sends to him,in addition to summarised financial statements,a completeprinted copy of the Companys annual financial statement and the directors re

96、portthereon.Article 151.The requirement to send to a person referred to in Article 149 the documents referred toin that article or a summary financial report in accordance with Article 150 shall bedeemed satisfied where,in accordance with all applicable Statutes,rules andregulations,including,withou

97、t limitation,the rules of the Designated Stock Exchange,the Company publishes copies of the documents referred to in Article 149 and,ifapplicable,a summary financial report complying with Article 150,on the Companyscomputer network or in any other permitted manner(including by sending any form ofele

98、ctronic communication),and that person has agreed or is deemed to have agreed totreat the publication or receipt of such documents in such manner as discharging theCompanys obligation to send to him a copy of such documents.Article 158.Any Notice or document(including any“corporate communication”wit

99、hin the meaningascribed thereto under the rules of the Designated Stock Exchange),whether or not,tobe given or issued under these Articles from the Company to a Member shall be inwriting or by cable,telex or facsimile transmission message or other form of electronictransmission or communication and

100、any such Notice and document may be served ordelivered by the Company on or to any Member either personally or by sending itthrough the post in a prepaid envelope addressed to such Member at his registeredaddress as appearing in the Register or at any other address supplied by him to theCompany for

101、the purpose or,as the case may be,by transmitting it to any such addressor transmitting it to any telex or facsimile transmission number or electronic number oraddress or website supplied by him to the Company for the giving of Notice to him orwhich the person transmitting the notice reasonably and

102、bona fide believes at therelevant time will result in the Notice being duly received by the Member or may alsobe served by advertisement in appropriate newspapers in accordance with therequirements of the Designated Stock Exchange or,to the extent permitted by theapplicable laws,by placing it on the

103、 Companys website or the website of theDesignated Stock Exchange,and giving to the member a notice stating that the notice orother document is available there(a“notice of availability”).The notice of 6(1)(a)(b)(c)(d)(e)(f)(g)(2)(3)(4)TABLE OF CONTENTS Article No.or Page No.Proposed amendments(showin

104、g changes to our currently effective articles of association)availability may be given to the Member by any of the means set out above other thanby posting it on a website.In the case of joint holders of a share all notices shall begiven to that one of the joint holders whose name stands first in th

105、e Register and noticeso given shall be deemed a sufficient service on or delivery to all the joint holders.Any Notice or document(including any“corporate communication”and“actionable corporate communication”within the meaning ascribed thereto underthe rules of Designated Stock Exchange),whether or n

106、ot,to be given or issuedunder these Articles from the Company shall be in writing or by cable,telex orfacsimile transmission message or other form of electronic transmission orelectronic communication and,subject to compliance with the rules of DesignatedStock Exchange,any such Notice and document m

107、ay be given or issued by any ofthe following means:by serving it personally on the relevant person;by sending it through the post in a prepaid envelope addressed to suchMember at his registered address as appearing in the Register or at any otheraddress supplied by him to the Company for the purpose

108、;by delivering or leaving it at such address as aforesaid;by placing an advertisement in appropriate newspapers or other publicationand where applicable,in accordance with the requirements of the DesignatedStock Exchange;by sending or transmitting it as an electronic communication to the relevantper

109、son at such electronic address as he may provide under Article 158(3);by publishing it on the Companys website or the website of the DesignatedStock Exchange;orby sending or otherwise making it available to such person through such othermeans,whether electronically or otherwise,to the extent permitt

110、ed by and inaccordance with the Statutes and other applicable laws,rules and regulations.In the case of joint holders of a share,all notices shall be given to that one of thejoint holders whose name stands first in the Register and notice so given shall bedeemed a sufficient service on or delivery t

111、o all the joint holders.Every Member or a person who is entitled to receive notice from the Companyunder the provisions of the Statutes or these Articles may register with theCompany an electronic address to which Notices can be served upon him.Subject to any applicable laws,rules and regulations an

112、d the terms of these Articles,any notice,document or publication,including but not limited to the documents referred to in Articles 149,150 and 158 may be given in the English language only or in both the English language and the Chinese language or,withthe consent of or election by any member,in th

113、e Chinese language only to suchMember.7(b)(d)TABLE OF CONTENTS Article No.or Page No.Proposed amendments(showing changes to our currently effective articles of association)Article 159.if sent by electronic communication,shall be deemed to be given on the day onwhich it is transmitted from the server

114、 of the Company or its agent.A Noticeplaced on the Companys website or the website of the Designated Stock Exchange,is deemed given by the Company to a Member on the day following that on whicha notice of availability is deemed served on the Member;A Notice,document orpublication placed on either th

115、e Companys website or the website of theDesignated Stock Exchange,is deemed given or served by the Company on the dayit first so appears on the relevant website,unless the rules of the Designated StockExchange specify a different date.In such cases,the deemed date of service shallbe as provided or r

116、equired by the rules of the Designated Stock Exchange;Article 159.may be given to a Member either in the English language or the Chinese language,subject to due compliance with all applicable Statutes,rules and regulations.ifpublished as an advertisement in a newspaper or other publication permitted

117、 underthese Articles,shall be deemed to have been served on the day on which theadvertisement first so appears.Unless otherwise specified,clauses,paragraphs and article numbers referred to in the table above areclauses,paragraphs and article numbers of our currently effective articles of association

118、.The voting rightsof holders of ADSs are limited by the terms of the deposit agreement.See“Risk FactorsThe votingrights of holders of ADSs are limited by the terms of the deposit agreement,and you may not be able toexercise your right to direct how the ordinary shares represented by your ADSs are vo

119、ted.”Conventions That Apply to This ProspectusUnless otherwise indicated or the context otherwise requires,references in this prospectus to:“ADSs”are to American depositary shares,each of which represents of our ordinary shares;“Greater China”are to mainland China,Hong Kong,Macau and Taiwan;“HK$”or“

120、HK dollar”are to the legal currency of the Hong Kong Special Administrative Region;“Hong Kong Listing Rules”are to the Rules Governing the Listing of Securities on The StockExchange of Hong Kong Limited,as amended,supplemented,or otherwise modified from time totime;“IFRS Accounting Standards”are to

121、International Financial Reporting Standards as issued by theInternational Accounting Standards Board;“international market”are to the global market excluding Greater China,unless the context indicatesotherwise;“ordinary shares”are to our ordinary shares,par value US$0.000005 per share;“self-operated

122、 restaurants”are to Haidilao restaurants that are directly owned and operated by ourcompany.When we self-operate a restaurant,we retain full control of the restaurants operations andkeep all the profit or loss generated by the restaurant.As of the date of this prospectus,all of theHaidilao restauran

123、ts within our network are self-operated restaurants;“we,”“us,”“our company”and“our”are to SUPER HI INTERNATIONAL HOLDING LTD.,ourCayman Islands holding company,and its subsidiaries;and“US$,”“U.S.dollars,”“$,”and“dollars”are to the legal currency of the United States.Our reporting currency is the U.S

124、.dollar.In addition,this prospectus also contains translations ofcertain foreign currency amounts into U.S.dollars for the convenience of the reader.Unless otherwisestated,all translations of HK dollars into U.S.dollars were made at HK$7.8109 to US$1.00,the noonbuying rate on December 29,2023 as set

125、 forth in the H.10 statistical release of the U.S.Federal ReserveBoard.The exchange rates used in the financial statements and related notes in this prospectus are asindicated 8TABLE OF CONTENTS therein.We make no representation that the HK dollar or U.S.dollar amounts referred to in this prospectus

126、could have been or could be converted into U.S.dollars or HK dollars,as the case may be,at any particularrate or at all.Industry and Market DataAlthough we are responsible for all disclosure contained in this prospectus,in some cases we haverelied on certain market and industry data obtained from th

127、ird-party sources that we believe to be reliable,including Frost&Sullivan,an independent market research firm.Market estimates are calculated by usingindependent industry publications,government publications and third-party forecasts in conjunction withour assumptions about our markets.While we are

128、not aware of any misstatements regarding any market,industry or similar data presented herein,such data involve risks and uncertainties and are subject to changebased on various factors,including those discussed under the headings“Special Note Regarding Forward-Looking Statements”and“Risk Factors”in

129、 this prospectus.Trademarks and Service MarksWe own or have been licensed rights to trademarks,service marks and trade names for use inconnection with the operations of our business,including,but not limited to,Haidilao(“”).Solelyfor convenience,the trademarks,service marks and trade names referred

130、to in this prospectus are listedwithout the,and symbols,but we will assert,to the fullest extent under applicable law,ourapplicable rights in these trademarks,service marks and trade names.9(TM)(sm)TABLE OF CONTENTS THE OFFERINGADSs offered by us ADSs(or ADSs if the underwriters exercise theiroption

131、 to purchase additional ADSs in full).Offering priceOn ,the closing sale price of our ordinary shares on theHKEx was HK$per share,equivalent to a price ofUS$per ADS,based on the exchange rate set forth on thecover page of this prospectus.For a discussion of factors consideredin determining the price

132、 to the public of the ADSs,see“Underwriting”in this prospectus.ADSs outstanding immediatelyafter this offering ADSs(or ADSs if the underwriters exercise theiroption to purchase additional ADSs in full).Ordinary shares outstandingimmediately after thisoffering ordinary shares(or ordinary shares if th

133、eunderwriters exercise their option to purchase additional ADSs infull).The ADSsEach ADS represents of our ordinary shares,par valueUS$0.000005 per share.The depositary will hold ordinary shares underlying your ADSs,andyou will have the rights of an ADS holder as provided in the depositagreement amo

134、ng us,the depositary and holders and beneficialowners of ADSs from time to time.If we declare dividends on our ordinary shares,the depositary willpay you the cash dividends and other distributions it receives on ourordinary shares,after deducting the depositarys fees,charges andexpenses and any appl

135、icable taxes or governmental charges.You may surrender your ADSs to the depositary in exchange forordinary shares.The depositary will charge you fees for anyexchange.We may amend or terminate the deposit agreement without yourconsent.If you continue to hold your ADSs after an amendment tothe deposit

136、 agreement,you agree to be bound by the depositagreement as amended.To better understand the terms of the ADSs,you should carefullyread the“Description of American Depositary Shares”section ofthis prospectus.You should also read the deposit agreement,whichis filed as an exhibit to the registration s

137、tatement that includes thisprospectus.Option to purchase additionalADSsWe have granted to the underwriters an option,exercisable within30 days from the date of this prospectus,to purchase up to anaggregate of additional ADSs.Use of proceedsWe estimate that the net proceeds from this offering will be

138、approximately US$million,or approximately US$million if the underwriters exercise their option to purchaseadditional ADSs in full,at an assumed initial public offering priceof US$per ADS,based on the closing price of our ordinaryshares and exchange rate set forth on the cover page of thisprospectus,

139、after deducting the estimated underwriting discountsand commissions and estimated offering expenses payable by us.We 10*TABLE OF CONTENTS intend to use the net proceeds of this offering as follows:(i)approximately 70%for strengthening our brand and expandingour restaurant network globally;(ii)approx

140、imately 10%forinvesting in our supply chain management capabilities,such asbuilding more central kitchens;(iii)approximately 10%for researchand development to enhance digitalization and other technologiesused in our restaurant management;and(iv)approximately 10%forworking capital and other general c

141、orporate purposes.See“Use ofProceeds”for more information.Lock-upWe,our executive officers,directors and certain shareholders haveagreed,for a period of 180 days after the date of this prospectusand subject to specified exceptions,not to directly or indirectly sell,offer,contract or grant any option

142、 to sell(including any short sale),pledge,transfer,establish an open“put equivalent position”withinthe meaning of Rule 16a-l(h)under the Exchange Act;or otherwisedispose of any ADSs or ordinary shares,options or warrants toacquire ADSs or ordinary shares,or securities exchangeable orexercisable for

143、or convertible into ADSs or ordinary sharescurrently or hereafter owned either of record or beneficially;orpublicly announce an intention to do any of the foregoing for aperiod of 180 days after the date of this prospectus without the priorwritten consent of the representatives of the underwriters.L

144、istingWe have applied for listing of the ADSs on the Nasdaq StockMarket under the symbol“HDL.”Our ordinary shares are listed on the HKEx under the stockcode“9658.”Payment and settlementThe underwriters expect to deliver the ADSs against paymenttherefor through the facilities of the Depository Trust

145、Company onor about ,2024.DepositaryCitibank,N.A.The number of ordinary shares that will be outstanding immediately after this offering:is based on 619,333,000 ordinary shares issued and outstanding as of the date of this prospectus;andincludes ordinary shares in the form of ADSs that we will issue a

146、nd sell in this offering,assuming the underwriters do not exercise their over-allotment option to purchase additional ADSs.This includes 61,933,000 ordinary shares issued to the ESOP Platforms.See Management Share AwardScheme”and note 30 to our audited consolidated financial statements included else

147、where in this prospectus formore details.11*TABLE OF CONTENTS SUMMARY CONSOLIDATED FINANCIAL DATAThe following summary consolidated statement of profit or loss data for the fiscal years endedDecember 31,2021,2022 and 2023,summary consolidated statement of balance sheet data as ofDecember 31,2021,202

148、2 and 2023,and summary consolidated statement of cash flow data for thefiscal years ended December 31,2021,2022 and 2023 have been derived from our audited consolidatedfinancial statements included elsewhere in this prospectus.Our consolidated financial statements are prepared and presented in accor

149、dance with InternationalFinancial Reporting Standards,or IFRS Accounting Standards,issued by the International AccountingStandard Board,or IASB.Our historical results are not necessarily indicative of results expected for futureperiods.You should read this Summary Consolidated Financial Data section

150、 together with our consolidatedfinancial statements and the related notes and“Managements Discussion and Analysis of FinancialCondition and Results of Operations”included elsewhere in this prospectus.The following table presents our summary consolidated statement of profit or loss data for the years

151、indicated:For the Year Ended December 31,2021 2022 2023 (US$in thousands,except for percentages)Summary consolidated statement of profit or loss data:Revenue 312,373 100.0 558,225 100.0 686,362 100.0Other income 19,458 6.2 6,701 1.2 6,695 1.0Raw materials and consumables used (113,760 (36.4 (196,646

152、 (35.2 (234,715 (34.2Staff costs (143,343 (45.9 (188,927 (33.8 (226,033 (32.9Rentals and related expenses (6,556 (2.1 (13,006 (2.3 (17,161 (2.5Utilities expenses (11,017 (3.5 (19,743 (3.5 (26,054 (3.8Depreciation and amortization (69,916 (22.4 (72,952 (13.1 (78,557 (11.4Traveling and communication e

153、xpenses (2,674 (0.9 (4,776 (0.9 (5,756 (0.8Listing expenses (6,310 (1.1 (1,745 (0.3Other expenses (41,729 (13.4 (55,510 (9.9 (62,682 (9.1Other gains(losses)net (73,270 (23.5 (26,793 (4.8 1,177 0.2Finance costs (19,158 (6.1 (12,493 (2.2 (8,424 (1.2(Loss)Profit before tax (149,592 (47.9 (32,230 (5.8 3

154、3,107 4.8Income tax expense (1,160 (0.4 (9,033 (1.6 (7,850 (1.1(Loss)Profit for the year (150,752 (48.3 (41,263 (7.4 25,257 3.7Other comprehensive income(expense)Exchange differences arising on translation offoreign operations 2,097 0.7 8,385 1.5 4,627 0.7Total comprehensive(expense)income for the y

155、ear (148,655 (47.6 (32,878 (5.9 29,884 4.4(Loss)Earnings per share Basic anddiluted(USD)(0.27 (0.07 0.05 12%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)%)TABLE OF CONTENTS The following table presents our summary consolidated statement of balance sheet data as of the dat

156、esindicated:As of December 31,2021 2022 2023 (US$in thousands)Summary consolidated statement of balance sheet data:Inventories 16,709 25,984 29,762Trade and other receivables and prepayments 30,253 26,771 29,324Amounts due from related parties 29,383 Bank balances and cash 89,546 93,878 152,908Total

157、 current assets 206,732 153,396 218,962Total assets 626,723 576,112 576,883Trade payables 26,549 32,313 34,375Other payables 24,128 31,663 34,887Amounts due to related parties 500,562 776 842Total current liabilities 596,144 117,230 128,571Total liabilities 813,905 334,075 304,762Net(liabilities)ass

158、ets (187,182 242,037 272,121Total shareholders(deficit)equity (187,182 242,037 272,121The following table presents our summary consolidated statements of cash flow data for the yearsindicated:For the Year Ended December 31,2021 2022 2023 (US$in thousands)Summary consolidated statements of cash flow

159、data:Net cash from operating activities 4,382 68,321 114,045 Net cash(used in)from investing activities (87,464 888 (11,775 Net cash from(used in)financing activities 119,879 (65,869 (43,787 Net increase in cash and cash equivalents 36,797 3,340 58,483 Cash and cash equivalents at beginning of the y

160、ear 51,564 89,546 93,878 Effect of foreign exchange rate changes 1,185 992 547 Cash and cash equivalents at end of the year 89,546 93,878 152,908 13)TABLE OF CONTENTS RISK FACTORSAn investment in our ADSs involves significant risks.You should consider carefully all of theinformation in this prospect

161、us,including the risks and uncertainties described below,before making aninvestment in our ADSs.Any of the following risks could have a material and adverse effect on our business,financial condition and results of operations.In any such case,the market price of our ADSs could decline,and you may lo

162、se all or part of your investment.Risks Related to Our Business and IndustryWe incurred net losses in 2021 and 2022.Our historical financial and operating results may not be indicative of ourfuture performance.We recorded net losses of US$150.8 million and US$41.3 million in 2021 and 2022,respective

163、ly,andour revenue amounted to US$312.4 million and US$558.2 million in 2021 and 2022 respectively.In 2023,we recorded revenue of US$686.4 million and net profit of US$25.3 million.Due to the COVID-19pandemic,our results of operations were adversely affected in 2021 but we recorded a rebound in reven

164、ue in2022 and 2023,as COVID-19 related restrictions have been gradually alleviated,and we continued toexpand our restaurant network.Our future profitability will depend on a variety of factors,including theperformances of our new and existing restaurants,competitive landscape,customer preference and

165、macroeconomic and regulatory environment.Therefore,our historical results and growth may not beindicative of our future performance.Our financial and operating results may not meet the expectations ofpublic market analysts or investors,which could cause the future price of our ADSs to decline.In par

166、ticular,as we expand and open new restaurants,our historical financial and operating results may not be indicativeof the performance of our new restaurants.See“We will continue to expand our restaurant network,which may increase risks and uncertainties.”Our revenue,expenses and operating results may

167、 vary fromperiod to period in response to a variety of factors beyond our control,including general economicconditions,special events,government regulations or policies affecting our restaurants and our ability tocontrol costs and operating expenses.You should not rely on our historical results to p

168、redict the futureperformance of our ordinary shares and ADSs.Our multi-jurisdiction operations may lead to increasing risks and uncertainties and our management system maynot be effective to address risks and uncertainties in our international restaurant operations.Operating in multiple jurisdiction

169、s around the world and expanding to new regions may expose us tovarious risks,which may include,among others:failure to anticipate changes to the competitive landscape in the new market due to lack of familiaritywith the local business environment;different consumer preferences and discretionary spe

170、nding patterns;difficulty in finding reliable suppliers of food ingredients meeting our quality standards at acceptableprices and quantities;the infringement of our intellectual property rights in foreign jurisdictions;political risks,including civil unrest,acts of terrorism,acts of war,regional and

171、 global political ormilitary tensions and strained or altered foreign relations,which may lead to interruptions in ourbusiness operations and/or loss of property;geopolitical risks in the countries we operate;economic,financial and market instability and credit risks;material tariffs imposed on our

172、food ingredients imported from other countries;challenges in interpreting and difficulties in complying with foreign investment laws and regulationsin different jurisdictions.For example,we may still be found non-compliant with foreign investmentlaws and regulations by the local authorities due to u

173、ncertainties in interpretation and enforcement,despite the steps we already take;14TABLE OF CONTENTS difficulties and costs associated with complying with,and enforcing remedies under,a wide varietyof complex local and international laws,treaties and regulations;inability to obtain or maintain the r

174、equisite registrations,filings,licenses,permits,approvals andcertificates in multiple jurisdictions;economic sanctions,trade restrictions,discrimination,protectionism or unfavorable policies againstChinese brands;difficulties with localized management of employees and operations,including compliance

175、 withlocal labor and immigration laws and regulations;exposure to litigation or third-party claims in different jurisdictions;foreign currency exchange controls and fluctuations;stringent consumer protection and data security requirements in multiple jurisdictions;uncertainties in the interpretation

176、 and application of tax laws and regulations,more onerous taxobligations and unfavorable tax conditions;andcultural differences and language difficulties.As a result of the above factors,our ability to operate in certain jurisdictions may be restricted,or ourrestaurants in multiple jurisdictions may

177、 take longer than expected to ramp up and reach,or may neverreach,expected sales and profit levels,thereby affecting our overall profitability.We may also be subject tofines and penalties imposed by local governments and our brand image and reputation may be adversely andmaterially affected.In addit

178、ion,our restaurant network covered 12 countries internationally as of December 31,2023.Ourbusiness and reputation may be adversely and materially affected if there are any geopolitical issues relatingto us in the countries we operate.Geopolitical issues may also cause significant inflation in one pa

179、rticularcountry,which may result in higher procurement costs and therefore affect our business,financialconditions and results of operations.We believe our proven management philosophy of“aligned interests and disciplined management”willassist with our expansion.However,as we continue to grow and ex

180、pand,our current management systemmay not continue to be effective and successful.Even though we are devoted to adapting our managementphilosophy in different countries based on local conditions,there is no assurance that we will be able tosuccessfully manage our restaurants in all jurisdictions and

181、 effectively manage our growth.We adopt a multi-tier management system to achieve scalable growth while maintainingstandardization,which gives our restaurant managers significant autonomy in the day-to-day operations ofthe restaurants they manage.Our headquarters are responsible for functions such a

182、s food safety,procurement,growth strategy and our senior regional managers primarily serve as the bridge that connectsour headquarters and each restaurant.However,we cannot assure you that our headquarters,senior regionalmanagers and restaurant managers will be able to effectively manage all of our

183、restaurants directly as wegrow in business scale.In addition,our current restaurant assessment scheme primarily focused on guestsatisfaction and employee contribution and places less emphasis on financial performance of the restaurant,which may not always be effective in assessing the performance of

184、 our restaurants in different countries.There can be no assurance that our management system,as it evolves,will always be able to addressour needs at different stages of our growth.Any significant failure or deterioration of our managementsystem could have a material and adverse effect on our busine

185、ss and results of operations.If we fail to retain existing guests or attract new guests,our financial condition and business operations may bematerially and adversely affected.We cannot guarantee that we will be able to retain our existing customers or attract new customers,andour financial conditio

186、n and business operations may be materially and adversely affected.Our ability toattract and retain guests could be negatively affected in the following events:decline in the quality of service;15TABLE OF CONTENTS failure to introduce new services or dishes that gain popularity amongst guests;inabil

187、ity to meet the needs of our guests and changes in consumer tastes or preferences;inability to continually upgrade our technology system;andinability to provide customized services to our guests.In particular,our business is affected by consumer tastes and dining preferences.While we arecommitted to

188、 regularly updating our menu and introducing innovative and localized dishes from time totime to adapt to dining trends in different geographical locations,shifts in consumer tastes and nutritionaltrends,we cannot assure you that hot pot is always preferred by guests among all cuisine styles,particu

189、larlyin a market with smaller Asian communities.In addition,consumer tastes and preferences are constantlychanging and our failure to anticipate,identify,interpret and react to these changes could lead to reducedguest traffic and demand for our restaurants.We cannot assure you that our hot pot will

190、continue to bepreferred by consumers,or that we will be able to adapt to local tastes and preferences as we expand intonew markets.In addition,there can be no assurance that we will be able to launch new dishes thateffectively respond to consumer preferences or result in increased profits.If we are

191、unable to respond tochanges in consumer tastes and preferences in a timely manner or at all,or if our competitors are able toaddress these concerns more effectively,we may face a decrease in guest visits and our business,financialcondition and results of operations may be materially and adversely af

192、fected.Our continued success depends on our ability to deliver and maintain our high-quality services and diningexperience.The success of our restaurants revolves primarily around guest satisfaction,which is dependent on thecontinued popularity of the“Haidilao”brand and lies in our ability to provid

193、e a great dining experience.Aswe continue to grow in size,extend our geographic reach and expand our food offerings and services,maintaining food and services quality and consistency may become more difficult and we cannot assure youthat customer confidence in our brand will not diminish.There is no

194、 assurance that we will be able tocontinue to provide high-quality services and an enjoyable dining experience to our customers.If consumersperceive or experience a deterioration in food quality,service,ambiance or value for money or believe inany way that we are failing to deliver a consistently en

195、joyable dining experience,our brand value couldsuffer and the number of customers visiting our restaurants may decline,which could have a material andadverse impact on our business.The quality of our dining experience may be adversely impacted by anumber of factors,including,among others:long waitin

196、g time;decline in the quality of service provided by our staff;inability to pioneer and introduce new menu items that gain popularity among guests;inability to meet the localized needs of our guests and adapt to changes in consumer tastes andpreferences;decline in food quality,or the perception of s

197、uch decline amongst guests;any significant liability claims or food contamination complaints from our guests;inability to offer quality food at affordable prices;decrease in the attractiveness or quality of design of our restaurants;andlow quality of delivery service.We cannot guarantee that our din

198、ing experience will continue to be of high quality and favored byguests,nor that our existing and new restaurants will continue to be successful.We face risks related to the instance of any food safety incidents and any food-borne illnesses.As a restaurant brand,the quality and safety of the food we

199、 serve in our restaurants is critical to oursuccess and we face risks in relation to instance of food safety incidents.Due to the different geographical 16TABLE OF CONTENTS locations we operate in and the expansion of our restaurant network,maintaining consistent food qualitydepends significantly on

200、 the effectiveness of our quality control system,which in turn depends on a numberof factors,including but not limited to the design of our quality control system,employee trainings toensure that our employees adhere to those quality control policies and the ability to identify and prevent anypotent

201、ial violation of our quality control system.There can be no assurance that our quality control systemwill always prove to be effective and can identify all the potential risks and issues in relation to food safetyarising from our restaurant operations.The quality of the food ingredients or service p

202、rovided by oursuppliers is subject to factors beyond our control,including the effectiveness of their quality control system,among others.There can be no assurance that our suppliers may always be able to adopt appropriate qualitycontrols and meet our stringent quality control requirements.Any signi

203、ficant failure or deterioration of ourquality control system may result in food safety incidents,which could have a material and adverse effecton our reputation,financial condition and results of operations.Furthermore,our business is susceptible to food-borne illnesses.We cannot guarantee that our

204、internalcontrols and training will be fully effective in preventing all food-borne illnesses.Our reliance on third-party food suppliers increases the risk of food-borne illness incidents and the risk of multiple locationsinstead of a single restaurant being affected.Drug resistant illnesses may deve

205、lop in the future,or diseaseswith long incubation periods could arise,such as mad-cow disease,that could give rise to claims orallegations on a retroactive basis.Reports in the media of instances of food-borne illnesses could,if highlypublicized,negatively affect our industry overall,and our operati

206、ons could suffer as a result,regardless ofwhether we were directly involved in the spread of the illness.Furthermore,other illnesses,such as hand,foot and mouth disease or avian influenza,could adversely affect the supply of some of our ingredients andsignificantly increase our costs,thereby impacti

207、ng our restaurant sales and conceivably having a materialand adverse effect on our results of operations.We may fail to maintain or enhance brand recognition or reputation.We believe that maintaining and enhancing our brand is important to maintain our competitiveadvantages in the international cate

208、ring service industry.However,our ability to maintain our brandrecognition depends on a number of factors,some of which are beyond our control.We may face negativepublicity,malicious allegations,customer disputes,and unauthorized use of the“Haidilao”brand,all ofwhich may tarnish the appeal and reput

209、ation of our brand.In particular,the“Haidilao”brand is also used byHDL Group.Our brand image and reputation may be adversely affected by negative publicity or customerdisputes of HDL Group,which are out of our control.Moreover,our continued success in maintaining andenhancing our brand and image dep

210、ends to a large extent on our ability to maintain our distinctivecombination of our services,and our localized and high-quality food ingredients at affordable prices,as wellas our flexibility to adapt to any changes in the competitive landscape in the hot pot industry.If we areunable to do so,the va

211、lue of our brand or image will be diminished and our business and results ofoperations may be materially and adversely affected.As we continue to extend our geographic reach andgrow in size,maintaining quality and consistency may be more difficult and we cannot assure you thatguests confidence in ou

212、r brand will not be diminished.We will continue to expand our restaurant network,which may increase risks and uncertainties.We have increased the number of our restaurants from 74 as of January 1,2021 to 115 as ofDecember 31,2023.We plan to continue to expand our restaurant geographical coverage and

213、 increase ourrestaurant penetration rate internationally.Our expansion may cause a deterioration in our corporate cultureand restaurant quality,which may adversely affect our brand reputation.Our future growth significantly relies on our ability to open and profitably operate new restaurants.It isch

214、allenging for us to continue our expansion while ensuring a localized and consistent high-quality of ourfood and services.As such,we are exposed to the resulting risks in the following areas:An increase in labor costs or labor reserve.The catering service market is labor-intensive.To achievecontinuo

215、us expansion and ensure consistent high-quality of customer service,we need sufficienthuman resources.There is no assurance that we will be able to attract,retain and develop sufficientqualified employees,including restaurant staff,in management,administration,marketing andproviding services for our

216、 new restaurants in different geographical locations.In particular,we may 17TABLE OF CONTENTS not be able to attract or develop employees with required language skills in different geographicallocation.Further,we may incur considerable labor costs in order to retain sufficient labor resources.Signif

217、icant pre-opening costs and capital expenditures.Opening new restaurants incurs significant pre-opening costs and capital expenditures.Pre-opening costs,which mainly consist of staff salaries,consulting services fees,staff relocation expenses,rent and miscellaneous administrative expensesprior to th

218、e opening of a restaurant,are incurred before the restaurant begins to generate revenue.Our financial conditions and results of operations may be materially and adversely affected by thesepre-opening costs and capital expenditures we incurred.Risks in ingredients supply.Our high-quality dining exper

219、ience depends significantly on the qualityof our food ingredients.Any disruption or damages to our ingredients supply chains could place us ata disadvantaged position.It may take a longer period to set up sound ingredients supply chains forour new restaurants in different geographical locations,and

220、we may fail to maintain or upgradesupply chains in a timely and effective manner.Intense competition and failure to anticipate market changes.We may face intense competition whenexpanding geographically within existing markets or entering into new markets where we have noexperience operating in.More

221、over,we may fail to anticipate market changes in these locations.Failure to strengthen our market position.As our current expansion plan involves some uncertainties,we cannot assure you that we will be able to assemble high-quality,affordable ingredients,toreplicate our services,and to ensure that a

222、ll of our employees are in compliance,in particular incompliance with the laws and regulations in respect of food safety in multiple jurisdictions.As aresult,we may fail to consolidate our market position.In addition,we may face intense competition when expanding geographically within existing marke

223、tsor entering into countries or cities where we have little or no experience operating.We cannot assure youthat our new restaurants will not cannibalize the business of our existing restaurants,in which case ourbusiness,financial conditions and results of operations may be materially and adversely a

224、ffected.Further,new markets may have different competitive conditions,consumer preferences and spending patterns fromour existing markets.As a result,any new restaurants we open in those markets may be less successful thanrestaurants in our existing markets.Consumers in the new markets,particularly

225、those with smaller Asiancommunities,may not be familiar with our brand and we may need to build brand awareness in the relevantmarkets through greater investments in promotional and marketing activities than we originally planned.Sales at the restaurants opened in new markets may take longer than ex

226、pected to ramp up and reach,or maynever reach,expected sales and profit levels,thereby affecting our overall profitability.Further,it may bedifficult for us to hire,train and retain qualified employees with a certain level of language skill.Restaurants opened in new markets may also have higher deco

227、ration,occupancy or operating costs thanrestaurants in existing markets.There is no assurance that we will be able to open new restaurants,either in the existing markets or innew countries or cities.Delays or failures in opening new restaurants could materially and adversely affectour growth and fin

228、ancial and operating results.If new restaurants are opened,they may be less profitablethan our existing restaurants due to any decrease in average sales or average spending per customer and/orany increase in construction,occupancy or operating costs.We face intense competition in the international m

229、arket for catering services.The catering service industry is intensely competitive with respect to,among other things,service,foodquality,taste,value,ambiance and location.We face significant competition at each of our locations from avariety of restaurants in various market segments,including local

230、ly owned Chinese cuisine restaurants andinternational chains.Many of our competitors are well-established in the markets where we haverestaurants,or in which we intend to open new restaurants.Additionally,other companies may develop newrestaurants that operate with similar concepts and target our gu

231、ests resulting in increased competition.Failure to successfully compete with other restaurants in our markets may prevent us from increasingor sustaining our revenues and profitability and may result in losing market share,which could have amaterial and adverse effect on our business,financial condi

232、tion,results of operations or cash flows.We mayalso 18TABLE OF CONTENTS need to modify or refine elements of our restaurant network to evolve our concepts in order to compete withpopular new restaurant menu dishes or concepts that develop from time to time.We cannot assure you thatwe will be success

233、ful in implementing these modifications or that these modifications will not reduce ourprofitability.Uncertainties relating to the growth of the international market for Chinese cuisine restaurants,especially the hotpot market,could adversely affect our revenues and business prospects.Our business i

234、s affected by the development of the international market for Chinese cuisine and hotpot.Our future results of operations will depend on numerous factors affecting the development of theinternational markets for Chinese cuisine and hot pot,such as government regulations and policies over thisindustr

235、y,investments in this industry and tastes and dining habits of guests,and some of them arecompletely beyond our control.Any decline in the popularity of Chinese cuisine in general,especially hotpot,or any failure by us to adapt our strategies in response to trends in the international markets for Ch

236、inesecuisine and hot pot may adversely affect our results of operations and business prospects.We will continue to incur costs on marketing efforts,including advertising,promotions and marketing campaigns toattract guests,some of which may not be sustainable or effective.We incur costs and expend ot

237、her resources in our marketing efforts to attract and retain guests.Ourmarketing activities include advertisements,promotions and in-store marketing campaigns.As we continueto expand globally,we expect to increase our investments in advertising and marketing promotionalactivities that are tailored t

238、o local market.Accordingly,we may incur higher costs in relation to marketingactivities,resulting in greater financial risk and a greater impact on our company.Further,some of ourmarketing activities may not be successful,resulting in expenses incurred without the benefit of higherrevenue.Additional

239、ly,some of our competitors have greater financial resources,which enable them to spendsignificantly more on marketing and advertising than we are able to at this time.Should our competitorsincrease spending on marketing and advertising,or our marketing funds decrease for any reason,or shouldour adve

240、rtising and promotions be less effective than those of our competitors,there could be a materialadverse effect on our results of operations and financial condition.We may not be able to achieve,maintain and increase the sales and profitability of our existing restaurants.The sales and profitability

241、of existing restaurants will also affect our sales growth and will continue tobe a critical factor affecting our revenue and profit.Our ability to increase sales and profitability of existingrestaurants depend in part on our ability to successfully implement our initiatives to increase customertraff

242、ic,table turnover rate and spending per guest.Examples of these initiatives include offering innovativelocalized dishes and soup bases,enhancing cultural-oriented dining experience,upgrading customer loyaltyprogram and adjusting prices of our dishes.There can be no assurance that we will be able to

243、achieve ourtargeted sales growth and profitability for our existing restaurants.If we are unable to achieve our targetedsales and profitability in our existing markets,our business,financial condition and results of operationsmay be materially and adversely affected.To minimize the negative impact o

244、f existing restaurants with weaker performance,we may decide toclose the restaurants with unsatisfactory sales growth or profitability based on our continuous assessment.The closure of restaurants may have a material and adverse impact on our business,financial conditions andresults of operations.An

245、y shortage or interruption in supply could slow our growth and reduce our profitability.We maintain a relatively broad supplier network as we only adopt centralized procurement in marketswhere we have larger presence.In 2021,2022 and 2023,we did not experience any incidents of interruptionor delay i

246、n our supply chain or failure to secure sufficient quantities of food ingredients from our suppliersthat had a material and adverse effect on us.We may incur higher costs in managing such a broad suppliernetwork.While we maintain good business relationships with these parties,we cannot assure you th

247、at thesesuppliers will not breach their contractual obligations to us,or that our agreements will not be suspended,terminated or otherwise expired without renewal.The operations of these parties may be subject to anynatural disasters or other unanticipated catastrophic events,including adverse weath

248、er,natural disasters,19TABLE OF CONTENTS fires,technical or mechanical difficulty,storms,explosions,earthquakes,strikes,acts of terrorism,wars andoutbreaks of epidemics could cause a delay or suspension of operations of these parties,which may affectthe quality of their products and services,cause i

249、nterruptions in our operations.In such event,our business,financial conditions and results of operations may be materially and adversely affected.In addition,we rely on third party logistics service providers to deliver food ingredients to ourrestaurants.We cannot guarantee that these logistic servi

250、ce providers will be able to deliver food ingredientson time,or the food ingredients will not be subject to contamination during the delivery,which is beyondour control.In such event,our business,financial condition and results of operations will be materially andadversely affected.Fluctuations in e

251、xchange rates could have a material and adverse effect on our results of operations.Because we conduct a significant and growing portion of our business in currencies other than the USdollars but report our consolidated financial results in US dollars,we face,exposure to fluctuations incurrency exch

252、ange rates.In 2021,2022 and 2023,we recorded US$13.2 million,US$21.9 million andUS$5.0 million net foreign exchange loss,respectively.As exchange rates vary,revenue,cost of rawmaterials and consumables,exclusive of depreciation and amortization,operating expenses,other incomeand expense,and assets a

253、nd liabilities,when translated,may also vary materially and thus affect our overallfinancial results.We may in the future,enter into hedging arrangements to manage foreign currencytranslation,but such activity may not completely eliminate fluctuations in our operating results due tocurrency exchange

254、 rate changes.Hedging arrangements are inherently risky,and we do not have experienceestablishing hedging programs,which could expose us to additional risks that could adversely affect ourfinancial condition and operating results.Rising interest rates could negatively impact our performance and rest

255、aurant expansion plansWe are exposed to fair value interest rate risk in relation to pledged bank deposits,fixed-rate bankborrowings,other financial assets and lease liabilities.We are also exposed to cash flow interest risk inrelation to variable-rate bank balances,and variable-rate bank borrowings

256、 which carry prevailing marketinterests.We attempt to minimize this risk and lower our overall borrowing costs through maintaining abalanced portfolio of fixed rate and floating rate bank borrowings and bank balances.This risk has not had a material impact on our overall borrowing cost or our financ

257、ial performance.However,in the event that we fail to control this risk in the future,rising interest rates could significantlyincrease our cost of borrowing or could make it difficult for us to obtain financing in the future.Anincreased cost of borrowing would make it more expensive for us to acquir

258、e or lease properties to convertinto a Haidilao restaurant unit or to acquire an existing restaurant,which may negatively impact ourperformance.If we are unable to obtain financing in the future,our growth could be limited,which couldnegatively impact our business and operating results.We may not be

259、 able to retain or secure key members of our management team or other key personnel including oursenior regional managers for our operations.Our future success depends on the continued service and efforts of our directors and executive officers.Losing their service of them and that of other key pers

260、onnel with industry experience and know-how inareas such as restaurant operations,financial,accounting and risk management,could have a material andadverse effect on our ability to sustain and grow our business.We need to continue to attract,retain andmotivate a sufficient number of qualified manage

261、ment and operating personnel to maintain consistency inthe quality and atmosphere of our restaurants and meet our expansion plans.We will need to continue to attract,train and retain talents at all levels,such as skillful restaurant staff,as we expand our business and operations.Competition for expe

262、rienced management and operatingpersonnel in the restaurant industry is intense,and the pool of qualified candidates is limited.We may not beable to retain the services of our core management team and key personnel or attract and retain high-qualitycore management team or key personnel in the future

263、.We invest significant amounts of time and effort tocultivate qualified restaurant managers and other key personnel at restaurant level.Historically,substantially all of our restaurant managers were promoted internally within the organization from the mostjunior 20TABLE OF CONTENTS ranking positions

264、.If one or more of our key personnel are unable or unwilling to continue in their presentpositions,we may not be able to replace them easily or at all,and our business may be disrupted,and ourresults of operations may be materially and adversely affected.In addition,if any member of our coremanageme

265、nt team or any of our other key personnel joins a competitor or forms a competing business,wemay lose business secrets and know-how as a result,which may have a material and adverse effect on ourbusiness and results of operations.We are subject to the risks associated with leasing premises for our r

266、estaurants.We lease the premises for all of our restaurants.Our property rent costs may increase our vulnerabilityto adverse economic conditions,limit our ability to obtain additional financing and reduce our cash for otherpurposes.Our property rent costs may further increase in line with our restau

267、rant network expansion.We normally negotiate with the landlords to renew our leases upon their expiration.If we are unable torenew the leases,we may have to close or relocate the restaurant.We may not be able to identify suitablepremises at commercially reasonable prices and we may incur significant

268、 relocation and decoration costs inrelation to the new premises we lease.In addition,the revenue and profit generated from this restaurant maybe adversely affected.Even though we are able to renew the lease agreements,we cannot assure you that wewill be able to renew without substantial additional c

269、osts or increase in rental cost.If a lease agreement isrenewed at a rent substantially higher than the historical rate,or any historical favorable terms granted bythe lessor to us are not extended,our business and results of operations may be materially and adverselyaffected.As a result,any inabilit

270、y to obtain leases for desirable restaurant locations or renew existing leaseson commercially reasonable terms could have a material and adverse effect on our business,financialcondition and results of operations.We are also subject to risks generally associated with the property rental market.These

271、 risks mainlyinclude changes in market rental rates,relocation of business districts or communities,supply or demand forthe products of our restaurants and potential liability for environmental contamination.In addition,we arealso subject to risks in relation to potential title defects of the premis

272、es we lease,which sometimes arebeyond our control.We may experience liability claims or complaints from our guests,or adverse publicity involving our products,ourservice or our restaurants.Being in the catering service industry,we face an inherent risk of food contamination and liabilityclaims.Our f

273、ood quality substantially depends on the quality of the food ingredients provided by oursuppliers,and we may not be able to detect all defects in those supplies.We have implementedcomprehensive food safety measures and inspection procedures for key stages in our supply chain,and weconduct periodic a

274、nd spot inspections of the participants in our supply chain(i.e.,suppliers,food processingservice providers,and inventory and logistics providers)and of our restaurants.However,as we expand ourbusiness scale,we cannot assure you that these counterparties or our restaurant employees will adhere to ou

275、rinternal procedures and requirements at all times.Any failure to detect defective food supplies,poorhygiene or cleanliness standards in our operations or other failure to observe our requirements,couldadversely affect the quality of the food served in our restaurants,which could lead to liability c

276、laims,complaints,or related adverse publicity and could result in the imposition of penalties by competentauthorities or compensation awarded by courts against us.In the past,we have received an insignificant number of guest complaints,considering the scale of ourbusiness and guest traffic.Most of t

277、he guest complaints we received were related to the taste and style of aparticular dish,and the service quality of our staff.Some related to scalding and other accidents occurred inthe dining process.We take these complaints seriously and endeavor to reduce such complaints byimplementing various rem

278、edial measures.Nevertheless,we cannot assure you that we can successfullyprevent all guest complaints of similar nature.Any complaints or claims against us,even if meritless and unsuccessful,may divert managementattention and other resources from our business and adversely affect our business and op

279、erations.Guestsmay lose confidence in us and our brand,which may adversely affect the business of our restaurants,resulting in declines in our revenue and even losses.Furthermore,negative publicity,including but notlimited to 21TABLE OF CONTENTS negative online reviews on social media and restaurant

280、 review platforms,and media reports or industryfindings related to food quality,safety,public health concerns,illness,injury or governmentalinvestigations,whether or not accurate,and whether or not concerning our restaurants,can adversely affectour business,results of operations and reputation.Inter

281、ruptions,delays or failure in providing our food delivery services may have a material and adverse effect on us.In addition to dine-in services in our restaurants,we offer food delivery services in certain restaurants.We primarily engage local third-party food delivery service companies to deliver o

282、ur food and we have lesscontrol over their services and quality control measures.As the food provider,we may be held liable forcomplaints and/or compensation related to orders made through these platforms,even if through no fault ofours.Interruptions,delays or failures in providing our delivery serv

283、ices,whether or not at our fault,maymaterially and adversely impact the experience of our customers and,further,damage our reputation andbusiness.These interruptions may be caused by unforeseen events that are beyond our control or the controlof the food delivery services platforms,such as inclement

284、 weather,natural disasters,transportationdisruptions,and labor unrest.In addition,food safety or product quality issues may occur when fooddelivery services are performed by third-party platforms.Any such incidents may result in the return of ourfood or complaints and,further,harm the reputation of

285、our overall business image.The payment methods that we accept subject us to third-party payment-related risks.A significant portion of our revenue were settled through third-party payment service providers,such asVisa and Mastercard.Therefore,the ability to accept digital payments from these third-p

286、arty channels arecrucial for our success.If we fail to extend or renew the agreements with these third-party paymentprocessors on acceptable terms or if these payment service processors are unwilling or unable to provide uswith payment service or impose onerous requirements on us in order to access

287、their services,or if theyincrease the fees they charge us for these services,our business and results of operations could be harmed.Furthermore,to the extent we rely on the systems of the third-party payment processors,any defects,failures and interruptions in their systems could result in similar a

288、dverse effect on our business.Our results of operations may fluctuate due to seasonality.We have been subject to certain levels of seasonal fluctuations.For example,we normally recordhigher guest visits and generate higher sales during winter months and holiday seasons.Going forward,ourfinancial con

289、dition and results of operations may fluctuate due to seasonality as we continue to expand ourstore network and our historical results of operations may not be comparable to or indicative of our futureresults of operations.We may be unable to receive compensation from suppliers for contaminated ingr

290、edients used in our dishes andindemnity provisions in our supply contracts may be insufficient.In the event that we become subject to food safety claims caused by contaminated or otherwisedefective ingredients or raw materials from our suppliers,we may attempt to seek compensation from therelevant s

291、uppliers.However,indemnities provided by suppliers may be limited and the claims againstsuppliers may be subject to certain conditions precedent which may not be satisfied.Further,our supplycontracts usually do not have provisions to cover lost profits and indirect or consequential losses.If noclaim

292、 can be asserted against a supplier or amounts that we claim cannot be recovered from the supplier tothe extent that our insurance coverage is insufficient,we may be required to bear such losses andcompensation at our own costs.This could have a material and adverse effect on our business,financialc

293、ondition and results of operations.We may not be able to adequately manage our inventory.As a restaurant operator,our raw materials mainly include food ingredients that have limited shelflives.For instance,our hand-cut lamb typically has a shelf life of three days.The shorter the shelf life and 22TA

294、BLE OF CONTENTS the longer we hold such inventories,the higher our risk of inventory obsolescence is.We monitor ourinventory levels at each restaurant through a just-in-time inventory management system.However,consumption of our food ingredients is subject to various factors beyond our control,inclu

295、ding fluctuationsin guest traffic,and in the long term,changes in consumer tastes and dining preferences.We cannotguarantee that our inventory levels will be able to meet the demands of guests,which may adversely affectour sales.We also cannot guarantee that all of our food inventory can be consumed

296、 within its shelf life.Excess inventory may increase our inventory holding costs and subject us to the risk of inventoryobsolescence or write-offs,which could have a material and adverse effect on our business,financialcondition and results of operations.Sites of our existing restaurants may become

297、unattractive,and our new restaurants may not be able to obtain qualitysites at commercially reasonable prices,if at all.We consider geographical locations to be critical in the success of our restaurants and we thus carefullyevaluate our restaurant sites.There can be no assurance that the sites of o

298、ur existing restaurants willcontinue to be attractive as the areas in which they are located may deteriorate or otherwise change in thefuture,resulting in reduced sales at these sites.For example,construction or renovation works at the localareas or activities centers where our restaurants are locat

299、ed may adversely affect the accessibility of ourrelevant restaurant sites,which in turn may result in a decrease in the pedestrian or vehicle flow andultimately the guest traffic at our relevant restaurants.Our long-term success is also dependent on our ability to effectively identify and secure app

300、ropriatesites for new restaurants at commercially reasonable prices and terms.We compete with other retailers andrestaurants for quality sites in the highly competitive market.Some of our competitors may have the abilityto negotiate more favorable lease terms than we can,and some lessors and develop

301、ers may offer priority orgrant exclusivity to some of our competitors for desirable locations.If we cannot obtain desirable restaurantlocations at commercially reasonable prices and terms,our ability to implement our growth strategy will beadversely affected.Our information technology systems are su

302、bject to risks.In the ordinary course of business,we use various information technology systems to manage ourrestaurants and maintain our customer loyalty program,among others.Our information technology systemsmay be vulnerable to damage or interruption from circumstances beyond our control,includin

303、g poweroutages,fire,natural disasters,systems failures,security breaches and viruses.Any significant failure of ourinformation technology systems,or loss or leakage of confidential information could have a material andadverse effect on our business and result in transaction errors,processing ineffic

304、iencies and loss of sales andguests.Any security breach caused by hackings to gain unauthorized access to our information or systems,or to cause intentional malfunctions,loss or corruption of data,software,hardware or other computerequipment,or any intentional or inadvertent transmission of computer

305、 viruses and similar events or third-party actions could have a material and adverse effect on our business.We also receive and maintain certainpersonal information about our guests through our customer loyalty programs,as well as by making creditor debit cards sales,which may be breached due to the

306、 actions of outside parties,employee error,malfeasance,or a combination of these or otherwise.If any actual or perceived breach of our securityoccurs,our guests confidence in the effectiveness of our security measures could be harmed and we maylose guests and suffer financial losses due to such even

307、ts or in connection with remediation efforts,investigation costs and system protection measures,any of which could harm our reputation and materiallyand adversely affect our business and results of operations.The improper collection,transfer,use or disclosure of data could harm our reputation and ha

308、ve a material adverseeffect on our financial condition and results of operations.Our business collects,transfers and processes certain personal and business data.We face risks inherentto the collection,transfer,use and disclosure of data,especially personal data.In particular,we face anumber of chal

309、lenges relating to data security and privacy,including but not limited to:protecting the data in and hosted on our system,including against attacks on our system by outsideparties,data leakage or fraudulent behavior or improper use by our employees or business partners;23TABLE OF CONTENTS addressing

310、 concerns,challenges,negative publicity and litigation related to data security and privacy,collection,transfer,use and actual or perceived sharing,safety,security and other factors;complying with applicable laws and regulations relating to the collection,use,storage,transfer,disclosure and security

311、 of personal data,including requests from data subjects and compliancerequirements in accordance with applicable laws and regulations.Data protection and privacy laws,regulations and standards are constantly being reviewed and updatedto ensure that the standard of protection afforded is kept abreast

312、 with technological developments andadvancements in this digital era.For example,in Singapore,the Personal Data Protection Act 2012 governsthe collection,use and disclosure of personal data by organizations in a manner that recognizes both theright of individuals to protect their personal data and t

313、he need for organizations to collect,use or disclosepersonal data for purposes that a reasonable person would consider appropriate in particular circumstances.To this end,the Personal Data Protection(Amendment)Act 2020 took a general shift away from consent-centricity and sought to provide individua

314、ls with greater autonomy to control their personal data.Otheramendments also included updating rules relating to digital marketing(to cover new communicationsplatforms and applications)and introducing new provisions such as mandatory data breach notifications andoffences relating to egregious mishan

315、dling of personal data,which have already come into effect sinceFebruary 1,2021.The increased financial penalties for data breaches by organizations introduced in thisamendment is also set to take effect sometime from October 1,2022.In lieu of the above,it is thus essentialthat our internal data pro

316、tection policy,training materials and guidelines are similarly reviewed and updatedin a timely manner to ensure that they remain in compliance and meet the standards required under therelevant data protection rules and regulations.Any failure,breach or lapse of our data policies may expose us to lia

317、bility and/or regulatory actions,and may attract negative publicity from media outlets,privacy advocates,our competitors or others,resulting in a material adverse effect on our financial condition and results of operations.Our insurance policies may not cover the risks relating to our business and o

318、perations.Currently,we maintain insurance policies that we believe are customary for businesses of our size andtype and in line with the industry practice.We do not maintain insurance policies against all risks associatedwith the catering industry,either because we believe it is commercially unfeasi

319、ble to do so,or the risk isminimal,or because the insurers have carved certain risks out of their standard policies.These risks include,without limitation,events such as the loss of business arising from increased competition and loss ofreputation,among others.If an incident occurs,in relation to wh

320、ich we have inadequate insurance coverage,our business,financial position and operating results could be materially and adversely affected.We may not be able to adequately protect our proprietary know-how or intellectual property,including our recipes,which,in turn,could harm the value of our brand

321、and adversely affect our business.Our proprietary know-how,recipes,trade secrets and other intellectual property,including our namesand logos are important to our business.We use confidentiality and non-compete agreements with keymanagement and operating personnel and other parties that may have acc

322、ess to our proprietary know-how,recipes and trade secrets.We also take other precautionary measures to protect our intellectual properties.However,we cannot assure you that these measures are adequate and effective in preventing others fromindependently developing or otherwise obtaining access to ou

323、r proprietary know-how,recipes and tradesecrets.As a result,the appeal of our restaurants could be reduced,and our business and results ofoperations could be adversely affected.We cannot assure you that we can prevent third parties from infringing upon our intellectual propertyrights.We may,from tim

324、e to time,be required to institute litigation,arbitration or other proceedings toenforce our intellectual property rights,which could be time-consuming and expensive to resolve and woulddivert our managements time and attention regardless of its outcome,materially and adversely affecting ourbusiness

325、,financial conditions and results of operations.On the other hand,we may face claims of infringement that could interfere with the use of ourproprietary know-how,recipes or trade secrets.Defending against such claims may be costly and,if we are 24TABLE OF CONTENTS unsuccessful,we may be prohibited f

326、rom continuing to use such proprietary information in the future or beforced to pay damages,royalties or other fees for using such proprietary information,any of which couldnegatively affect our sales,profitability and prospects.In addition,certain of our intellectual properties are licensed from Si

327、chuan Haidilao Catering Co.,Ltd.(“Sichuan Haidilao”).We cannot guarantee that Sichuan Haidilao will not breach the trademark licenseagreement,due to the changes in the factors beyond our control,including local laws or governmentregulations or that the trademark license agreement will not be termina

328、ted for other reasons.We believe thatour brand and trademarks are important to our business.If a third-party successfully challenges SichuanHaidilao ownership of,or our right to use,the“Haidilao”and related trademarks,our business,financialconditions and results of operations will be materially and

329、adversely affected.We may fail to be in compliance with regulatory requirements or obtain related licenses required by relevantauthorities.In accordance with the relevant laws and regulations in jurisdictions in which we operate,we arerequired to maintain various approvals,licenses and permits to op

330、erate our restaurant business,includingfood operation license,environmental protection assessment,fire safety verification and fire safetyinspection.These approvals,licenses and permits are obtained upon satisfactory compliance with,amongstother things,the applicable food hygiene and safety,environm

331、ental protection,fire safety and liquorlicensing laws and regulations.Going forward,if we fail to obtain all of the necessary licenses,permits and approvals,we may besubject to fines,confiscation of the gains derived from the related restaurants or the suspension ofoperations of the restaurants,whic

332、h could materially and adversely affect our business and results ofoperations.We may also experience adverse publicity arising from such non-compliance with governmentregulations that negatively impacts our brand.We may experience difficulties or failures in obtaining thenecessary approvals,licenses

333、 and permits for new restaurants.If we fail to obtain the material licenses,ourrestaurant opening,and expansion plan may be delayed.In addition,there can be no assurance that we willbe able to obtain,renew and/or convert all of the approvals,licenses and permits required for our existingbusiness operations upon expiration in a timely manner or at all.If we cannot obtain and/or maintain alllicenses