Shares of Haidilao International surged on Monday following the company's optimistic guidance on first-half net profit. The stock was up 12.2% at HK$21.85, reaching an intraday high of HK$22.20, the highest level since March 15.

In a filing with the Hong Kong Exchange on Sunday, the hotpot restaurant chain operator announced its expectations for a net profit of at least 2.2 billion yuan ($307.74 million) for the first half of this year, a significant increase compared to 72 million yuan from the previous year. Additionally, the company projected a minimum revenue growth of 23.7% to 18.8 billion yuan for the same period.

Haidilao International attributed the expected profit surge to improvements in table turnover rate and overall operational efficiency resulting from enhanced internal management and operations.

According to analysts at Jefferies, the net profit margin for the first half of 2023 was 11.7%, exceeding expectations. This exceptional performance can be attributed to improved operating efficiencies and, to a lesser extent, foreign-exchange gains. Jefferies currently holds a hold rating on the stock with a target price of HK$21.10.

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