Haidilao Falls After Founder’s Family Trust Sells HK$2.75 Billion Stake

Haidilao shares fell after SP NP Ltd., a company used by founder Zhang Yong’s wife Shu Ping’s family trust, sold 259 million shares in a block trade for about HK$2.75 billion at HK$10.62 each, according to Jiemian News. The stake sale, disclosed on September 8, represented about 4.65% of Haidilao’s issued shares. Haidilao said the disposal was entirely due to the controlling shareholder’s own funding needs and financial arrangements and was unrelated to the group’s business, operations, financial condition or outlook. The stock dropped 9.14% on September 9 to HK$10.34 and was down another 4.35% to HK$9.89 at 3:21 p.m. on September 10. Jiemian News said the sale has drawn market attention because it came four months after Zhang bought about HK$152 million of Haidilao shares. The article also noted that China’s Ministry of Finance and the State Taxation Administration issued a notice on July 24 on personal income tax rules for offshore trusts, setting a 90-day filing-and-payment window for historical tax matters within scope. Jiemian News reported that Shu Ping’s Rose Trust was set up in 2018, with a UBS trust unit as trustee and Shu Ping, Zhang Yong and their family as beneficiaries. Zhang also has a similar structure through Apple Trust and ZY NP Ltd. The article said the new rules have made offshore trust holdings more transparent, but it has not been confirmed whether the HK$2.75 billion sale was used to cover taxes.