We recently compiled a list of the 10 High Growth Restaurant Stocks For 2025. In this article, we are going to take a look at where Super Hi International Holding Ltd. (NASDAQ:HDL) stands against the other high growth restaurant stocks.
Morgan Stanley recently published a report on the restaurant industry, suggesting that the tough environment that the industry is currently facing may ease out in 2025, though only modestly. Restaurants will have to continue working on providing value meals to consumers who continue to struggle to balance their income and expenses.
A balanced job market could help keep labor costs steady. However, a political campaign against immigration could be a potential headwind for the industry. A growing emphasis on robotics to improve efficiency and customer service could also play a key role in the industry’s development this year, though it is too early to determine the financial implications of these moves.
We decided to shortlist a few stocks that we believe could benefit from an improving industry environment in 2025. To come up with the list of 10 restaurant stocks with a high growth rate, we only considered stocks that have grown by more than 15% in the last 5 years or since IPO and have a market cap of at least $1 billion.
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Super Hi International Holding Ltd. (NASDAQ:HDL)
Super Hi International Holding Ltd. is an investment company that invests in the food business and runs branded Chinese restaurants under the brand Haidilao. It also provides food delivery services and sells hot pot condiment products as well as food ingredients.
HDL’s growth story hinges on two variables: new store openings and margin expansion. According to the CEO, the US is the biggest opportunity for the company, and new outlets in 2025 will help the company tap into this opportunity. Currently, the company makes most of its revenue from South East Asia but the renewed focus on North America is where the future growth lies.
Analyst estimates for the company’s fiscal 2024 margins have moved up from 4% to 4.4%. In three years, these margins are expected to go above 7%. When combined with the new store openings, this could significantly alter the company’s financial position in three years.
Investors will note that the company only went to IPO just last year. So a 34% growth rate requires further investigation before one takes a position in the stock. Having said that, stocks like these also offer a multi-bagger opportunity.
Overall HDL ranks 6th on our list of the high growth restaurant stocks for 2025. While we acknowledge the potential of HDL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as HDL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
