SUPER HI INTERNATIONAL HOLDING LTD.

Good evening. Thank you for attending today's Super High International 2025 Q4 and Full-Year Earning Conference. The company leaders present to the conference are Ms. Yang Yuzhe, Executive Director and CEO, and Ms. Chui-Sung Xiefo, and the Secretary of the Board. The content of today's meeting may contain forward-looking statements, including but not limited to the company's statements on its strategies and business plans, as well as the outlook for its performance. The content released by this conference, at this earnings conference, as well as the comments and responses to your questions only represent the views of the management as of today. Please refer to the latest Safe Harbor statement in the earnings press release, which applies to all the conference calls. The meeting is conducted in Chinese with an external institution, providing simultaneous English translation. In case of any discrepancies, the Chinese content shall prevail. The meeting presentation materials have been uploaded to the company's investor relations page for your reference. Now, we invite Ms. Yang Lijun, Executive Director and CEO of Superhigh International to review the company's performance in fourth quarter 2025. Thank you, host. Dear investors and analysts, good evening. I am Yang Lijun, Executive Director and CEO of Superhigh International. Super High International. I'm here to brief you on the company's performance in the fourth quarter and the full year of 2095. In 2095, under the strategy of focusing on both employees and customers, the company took the initiative to offer benefits to these core groups. We have witnessed the sustained growth in revenue in customer traffic with the quality of the growth improving In the fourth quarter of 2025, the company's overall operation continued. The recovery trend of the first three quarters, the customer traffic of Haidilao restaurants reached 8.31 million persons times in this quarter, driving the overall average table turnover rate of Haidilao restaurants to four times, four times per day, an increase of 0.1 times per day year on year. At the same time, companies' delivery business and other businesses continue to contribute to revenue in this quarter. Companies' total revenue reached U.S. dollars $230 million, an increase of 10.2% compared with U.S. dollars $208.8 million in the same period last year, and a month-to-month increase of about 7.5% from the third quarter last year. indicating that our investment in optimizing product cost-to-performance ratio and reaching consumption scenarios and improving service experience have gradually been recognized by customers. Looking back at the full year of 2025, Heidi Lau Restaurants, operated by the company, received a total of 32 million diners. The overall average table turnover rate of the restaurants reached 3.9 tons per day. In the same store, average table turnover rate reached four turns per day, both an increase of 0.01 turns per day compared with the same period last year. Total revenue 2025 was U.S. dollars $841 million, an increase of 8% year-on-year. Now, I share with you some of our continuous efforts in business improvement. First, adhere to offering benefits to customers and employees, and consolidated the foundation of store management in 2025 on the basis of focusing on both employees and the customers. We further clarified and implemented the proactive strategy of offering benefits to customers and employees throughout the year. In terms of employee development, we have continuously optimized from multiple dimensions, such as salary and welfare, daily care, and training and development, enhancing the sense of belonging of the diversified team. Up to now, we have about 90 reserve backbones, and nearly half of whom are foreign key staff laying a talented foundation for diversified management. In the frontline management, on the basis of formulating core red line principles, we have turned the focus of the worker to frontline stores in the regional divisions, allowing them to focus more on the market, customers, and employees themselves. This transformation has released very obviously front line vitality in the second half of the year in many excellent service cases in management practices that have been spontaneously created by regional divisions in stores. At the same time, we also encourage management team in various regions to conduct cross departmental and cross city store inspections that conduct the comparison learning and reflection in onsite work In conjunction with the dual store management and multi-store management policies, we expand excellence management capabilities to more stores and further expand the talent training ashram. Second, create a unique idea and continue to invest in customer experience. This year in our work of focusing on customers, we have formulated and differentiated the service plans for different customers. such as birthdays, parent-child activities, dinners, and late-night snacks, and implemented scenario-based services in the audience, such as dishes, peripheral products, and decorations with more substantial investments. In terms of products, we have continued to promote localized new product launches in various countries with a total of more than 1,000 optimized new launches throughout the year. This year, we focused on the implementation of a fresh-cut food scenario. Fresh-cut meat is quite novel for overseas consumers. We have something equipped with the decoration of the open kitchen fresh-cut workshop, which can bring a better consumption upgrade experience. At present, there are a total of 57 SKUs of fresh-cut beef and pork series. Covering 13 countries, as of December 31st, the average click-through rate of the fresh-cut meat series products in overseas countries reached 12.21%. This year, we have continued to innovate in the take-out scenario, launching faster food categories such as spicy boiled food cups, fried snacks, and rice and noodles. At the same time, We launched and promoted on multiple platforms and expanded delivery coverage. The annual takeout revenue increased by 68.1% year-on-year, effectively reaching customer groups beyond dining meals. In terms of space and service, we selected some pilot stores to carry out the transformation of nightclub style scenarios, upgrading lighting, sound effects, and interactive experiences. The improvement of table turnover rate during late-night snack hours in pilot stores is more obvious than that of similar stores around us. In addition, we have actively explored innovative marketing models in many countries and driven a certain degree of talk-of-town popularity and customer traffic support locally through the dual-track strategies of celebrity co-branding and IT authorization. In terms of cost-performance ratio, We have authorized the teams in various countries to make reasonable adjustments in pricing, portion size, and plating, allowing customers to better feel the cost-to-performance ratio. This is also one of the important reasons why our table turnover rate remained stable in the traditional off-season in the first half of the year. Thirdly, enhance the capability of the headquarters and promote the upgrading of organizational efficiency and digitalization practices. We have made several important progress in the capacity building of the headquarter this year. In terms of supply chain, we have continuously increased the production capacity of our own central kitchens, strengthened the hierarchical management and bargaining power of global suppliers. The continuous efficiency improvement of the supply chain since this year has increased offset the growth profit pressure brought by the customer benefit strategy to a certain extent. Proportion of the employee cost has also gradually approached the level of the same period last year. In terms of digitalization and organizational efficiency, we have actively explored the application of AI technology in management to improve the operational efficiency of the headquarters and stores. We have also further integrated the coordination mechanisms of products and marketing, guided menu optimization, and data evaluation, and formed a normalized product management cycle of new launch evaluation and iteration. Up to now, the scale of our overseas members has continued to expand, and the application of digital tools in the members' activation and scenarios reach has gradually deepened. As of the end of 2025, the number of overseas members of HIDL has exceeded 8.5 million. Fourthly, the expansion of store network and the woodpecker plan are promoted in parallel. In terms of expansion, we still adhere to the bottom-up strategy where country managers are responsible for site selection and implementation. The headquarters controls the quality and pace. In 2025, we opened a total of 13 Hy-Vee Law stores throughout the year, covering nine countries, including Malaysia, South Korea, Indonesia, Japan, United States, Australia, Canada, UAE, and the Philippines. In the meantime, we continue to optimize the store network layout and make adjustments at the right time. In 2025, we closed a total of nine stores in Singapore, Thailand, Malaysia, and Japan. Some due to lease expiration, others due to active adjustment. Among them, three locations that have completed the format transformation from Haidilao to the second brand and then incorporated into the pomegranate native plant As of the end of 2025, we operated a total of 126 Haridwar stores overseas. In terms of store opening quality, the number of stores we have signed contracts for and to be opened still remains in double digits. With a steady overall expansion pace, we have not relaxed the requirements for profitability and implementation of the quality of new stores. In terms of the pomegranate plant, we have implemented it at a steady pace of advancing gradually and verifying, whilst polishing the plant as we go along this year. We continue to incubate prototype stores and second-brand projects in different countries around multiple catering trucks, such as the hot pot, barbecue, and spicy cups. And in terms of the implementation mechanism, We adhere to a bottom-up approach in terms of the teams in various countries identify, trust, and promote site selections and implantation based on the local market, whilst the headquarters focuses on the construction of the middle office capabilities, such as product R&D, brand marketing, information and business analysis, forming front-end and back-end coordination. We can also show you some of the results this year in terms of progress. We have some specific achievements that we report to you this year. Projects such as Spokoro BBQ, Canadian Haibo Malatang, and Japanese Izakaya are progressing as planned, some of which have achieved a single-store probability, proving that our exploration of new formats overseas is feasible. In addition, three original Haidilao locations were transformed into second-bred operations throughout 2025, and the pomegranate plant has begun to link with the optimization of the existing store network rather than being an isolated new thing. From the perspective of operating data, the revenue contribution of related business has also continued to increase. Other business revenue increased by 61.4% year on year, and the substantive contributions have begun to be seen in reaching the revenue structure and expanding the customer base. Next, we'll still adhere to a prudent pace of advancements and continue to polish the proven projects, build up information digitalization and the mid-office support capabilities, and on this basis gradually improve replication efficiencies and enrich the company's format, layout, and growth sources. Looking forward into the future, we take becoming a leading global comprehensive catering group as our long-term development goals continue to improve in five aspects, the customer experience, the restaurant network, operational improvement, new business, and headquarter capabilities. The above is my introduction to the business development situation. So now please welcome Ms. Xu Cong to introduce the financial situation to you all. Thank you, Ms. Xu. And next, I will report to you on the financials of the company. Our total revenue for the full year 2025 was U.S. dollars $840.8 million, an increase of 8% compared with the same period last year. Operating revenue of the high-dollar restaurants with the U.S. dollar 790 million accounting for about 94% of the company's total revenue, an increase of 5.7% compared with last year. Takeout revenue, U.S. dollar 19 million, increase of 68.1% year-on-year. Other business revenue was the U.S. dollar's 31.8-minute increase of 61.4% year-on-year, mainly due to the continuous expansion of the revenue contribution from restaurants incubated under the pomegranate plant and the continuous penetration of peripheral products, such as the hot pot condiments among local consumers and in retail channels. The four-year table turnover rate of a Haidilao restaurant was 3.9 tons per day, and the same store Turnover rate was four turns per day, both an increase of 0.1 turns as compared with 2021, and achieving steady improvement in operating quantities against the background of a continuous expansion of the store network. From the perspective of the annual rhythm, the year-on-year revenue growth rate of each quarter was 5.4, 8.5, 7.8, and 10.2, respectively, with the growth momentum strengthening quarter by quarter and reaching the annual high in the Fourth quarter reflecting that our continuous investment in optimizing product cost performance ratio enriching consumption scenarios and improving service experience. In terms of the raw material cost accounted for 33.6% of revenue increase of 0.5% over last year due to our active optimization restaurant dish quality and increase in the proportion of fresh products, which brought certain fluctuations in raw material cost in the short term. Employee costs accounted for 33.9%, increase of 0.6% over last year in 2025. We systematically raised the salary and the welfare for the frontline employees and increased investment in employees' daily care. Rental accounted for 2.9% of revenue, increase of 0.3% compared with the same period last year. Water and electricity expenses is 3.4% for revenue, a decrease of 0.2 percentage points compared with last year. Depreciation in amortization accounted for 9.8% of the revenue, a decrease of 0.6 percentage points compared with last year. Above changes are many due to dilution of a promotion proportion of relevant expenses by the increase in revenue. Other operation-related expenses accounted for 11.3% of revenue increase of 1.4 percentage points over last year, mainly due to the increase in our outsourcing services fees for restaurants as well as the company's increased investment in continuous promotion of the pomegranate plant and the brand building regional expansion. In 2025, our full-year operating profit was $37.4 million. The operating profit margin 4.4% decreased compared with 2024. From the perspective of quarterly trends, against the background of an actively increased investment in the first half of the year, operating profit margin had a low of 1.9% in the second quarter. recovered significantly from the third quarter and rebounded to 5.9% and 5.7% in the third and fourth quarters, respectively, with a clear recovery trend in the second half of this year. This resulted in line with our forecast at the beginning of the year, and this has laid a solid foundation for the company's long-term healthy development under the comprehensive influence of above factors. After that, the net profit in 2025 was the U.S. dollar 36.3 million, substantial increase compared with 2024. Significant improvement in net profit and is mainly due to the favorable impact of 2025 global exchange trend on the company's multi-currency asset and liabilities. So now looking at Q4, achieved a total revenue of US$230 million and increase of 10.2% compared with same period last year, month-on-month, 7.5% from third quarter. mainly due to expansion of the store network compared with last year, continuous improvement of the table turnover rate, peak season effect, driving double growth over customer traffic and average customer spending. Among them, operating revenue of Heidi Law Restaurants was $211.9 million, accounting for 92.1% of company's total revenue, increase of 6% compared with the same period last year, Takeout revenue was the U.S. dollar 6.8 million, substantial increase of 94.3% compared with the same period last year, continued high-speed growth. And other business revenue was the U.S. dollar's 11.3 million, increase of 109.3 compared with the same year last year. We can continue to see that the success of the pomegranate plant was further evident in fourth quarter. Fourth quarter of 2025, the raw material cost is 76 million U.S. dollars. The gross margin, 66.6%. It decreased about one percentage point compared with same period of last year, mainly due to the short-term cost increase brought by optimization of food material structure. Employee cost was U.S. dollars 74 million, accounting for 32.2% of revenue. Basically, same period of last year. Improvement compared with the third quarter. meaning benefiting from the increase in revenue scale in fourth quarter rent expenses. The U.S. dollar is at 6 million, accounting for 2.8% of the revenue, basically the same as the same period of last year. Ordering electricity expenses, 7 million U.S. dollars, accounting for 3.1% of the revenue. Decrease of 0.3% to the point compared with the same period of last year. Depreciation in amortization with U.S. dollars at 21.5 million, accounting for... 9.4% of the revenue, a decrease of about 0.9% each point compared with the same period last year. Total revenue and other operating expenses, the U.S. dollar is $29 million, accounting for 11.7% of revenue, increased about 1.1% each point, mainly due to the promotion of pomegranate plants, plant building and store expansion. to four companies operating profits. It was 12.98 million operating profit margin, 5.7% decrease, about 2.7 percentage points, and basically the same as third quarter, and the decline in the profit margin is mainly due to active investment on the cost side, which is in line with our overall rhythm of continuously offering benefits to customers and employees. Net exchange losses in the fourth quarter was U.S. dollars 3.8 million, mainly due to revaluation impact of exchange rate fluctuation. Under this impact, taking Q4, our after-tax next profit was U.S. dollars 4.47 million, achieving profitability by end of 2025. And our capital reserve is U.S. dollars 270 million compared with U.S. dollars 250 million at the end of 2024, mainly due to net cash inflow generated from annual operating activities. In terms of performance of the restaurants in Q4, we have served a total of 8.31 million customers, an increase of 3.89% compared with the same period in 2024. Companies averaged a table turnover rate with four turns per day, increase of 0.1 turns compared with the same period of last year, where average customer spending was the U.S. dollars at 25.4 U.S. dollars, the increase of the U.S. dollars at 0.4 compared with the same period last year, mainly because we continue to optimize the dish structure and the marketing measures providing consumers with more differentiated choices. Average daily revenue per restaurant was the U.S. dollars at $18. from the same period last year, and we can see that East Asia performance is the most outstanding. It has increased about 0.3 turns compared to the same period of last year, reaching 5.1 turns, and this is mainly thanks to the operating efficiency in Japan and South Korea markets, as well as the incremental Contribution of uni opened the stores. The average customer spending remaining at U.S. dollar is a 28-point decline for North America, roughly the same as last year at 4.1 tons per day. In terms of average daily revenue for restaurants, the U.S. dollar is $24,100, the same period, roughly the same as last year. Same period of last year, the average customer spending in North American market was the U.S. dollar's 41.4. It rebounded from 41 in the same period. Net increase of two high-deal restaurants in North America in this quarter supported revenue growth. Other regions, the table turnover rate in the fourth quarter was 3.9 turns per day, affected by ramping up period of newly opened restaurants during the same period. Average daily revenue per restaurant is 24%. 1,300 U.S. dollars, a slight adjustment from U.S. dollars, 26,100. Average customer spending, 40 U.S. dollars. Southeast Asia, total of 5.3 million customers. And in terms of the average customer spending, 19.3 U.S. dollars, slightly the same as last year, maintaining stable operation overall. In the fourth quarter, same period revenue was 195.4 million dollars. an increase of 2.3% for the same store growth, achieving positive growth for Southeast Asia. We can see 12.8% year-on-year growth, and for other regions, They are at 1%, 0.2%, 0.5% year-on-year for North America, Southeast Asia, and for regional performance is pretty much consistent with the overall trend, and I'm not going to go into further details. So this concludes our presentation. We're now going to the Q&A session.

Let's wait for the first question to come through.

So, first question comes from from security. This is from security. I have two questions. The first one is on store opening. May I please ask for the next three years, what's your store opening plan? And looking at the different regions, what's the approximate quantity? Given that there are certain global geopolitical changes, will this affect your current store opening plans? My second question is on the brand equity. What indicators do you use to judge the spend of your brand equity? In terms of hiding our brand in various countries, and what is the strength for the countries that you're not doing so well in, and how would you further strengthen your brand equity in those countries? Thank you, Ms. Zhong. I will answer your first question in terms of store opening. For store opening, we continue to focus on bottom to up, hence we're not going to have a specific target, and in terms of Our selection of the stores and in terms of the business district and maturity preparation for the local team, those are more important. At present, most of these plans, they will be opened up in 2026. In terms of regions, East Asia is where we have the most confidence. We can see that single-store model in Japan and South Korea have been verified. We have also noticed that North America achieved a net increase in the fourth quarter. And for Southeast Asia, we have a large base, and the focus is on optimizing the existing stock and improving quality of single stores. Middle East, Europe, Australia will be following and watching the market closely. You also talked about the geopolitical frictions and the war going on at the moment. So for our Middle East deployment, of course, for the short term, that will come as a headwind. But in terms of geopolitics, and our approach is that we will not be making unified decisions on contractions or accelerations, but it is really the country managers to make their judgment call because they're the ones who know the best about the local situation. And again, it is still bottom to upper hand, so we will maintain very prudent. In terms of your second question, how do we evaluate our brand power? And I'll have Ms. Yang to answer this question. So you can see that these would be reflected in our internal indicators, and we mainly look at the following areas. For instance, number one is the quality of natural growth of members of customer registered voluntarily and repurchase without relying on promotions or discounts. Second, steady growth of table turnover rate in peak season, which reflects the customer's willingness to visit. Thirdly, continuous increase in the proportion of local customers. If a market mainly relies on the Chinese customers, then the brand barrier is fragile. Number four is the spread of word of mouth. We continue to follow the natural discussions volume and the emotional tendency on local social media in each market. By market, in the mature markets such as South Korea and Southeast Asia, the brand awareness is high, and the local customer base is solid. Japan is growing rapidly with remarkable progress in the past year. In addition, in some markets where we have entered a short term, short time, and the brand awareness is still in the early stage, and Asian customers are still the main support. For markets with a relatively weaker brand power, our strategy has several levels. First, localized products and services to make local consumers feel that heavy-duty dishes are made for them. Second, scenario-based marketing strategies such as star co-branding and IP authorization have a higher leverage effect in the market with a weak brand awareness. And number three. We will not easily abandon a market because of the poor short-term data, but we will carefully evaluate which stores need adjustments based on performance. Thank you. Thank you, Ms. Yang, and thank you, Ms. Chu. Thank you for your question. So the next question comes up from Citic Securities.