Haidilao Stock Plunges 10% Amid Sells of Overseas Trust Shares
Haidilao shares fell sharply after founder Shu Ping plans to sell a $351 million stake. Investors fear the sale signals risks from Beijing's new tax on offshore wealth.
Shares of Haidilao International Holding fell 10% in Hong Kong last week following a plan by co-founder Shu Ping to sell 259 million shares. This transaction represents a 4.65% stake and is estimated to generate proceeds of HK$2.75 billion (US$351 million) for her personal use. Market reaction was immediate, with traders connecting the sale to new regulations regarding income tax on offshore trusts. The government framework requires owners of such assets, typically held in Hong Kong, Singapore, or the Cayman Islands, to declare holdings and pay taxes before a 90-day deadline expires in October. While Haidilao stated the reduction was for personal funding needs, the regulatory environment surrounding private overseas wealth appears under increasing scrutiny. Similar patterns exist among other Chinese companies listed in Hong Kong, including Guming Holdings and Atour Group, which also hold significant stakes via overseas trusts valued in billions of dollars.
