Over the years, listed companies have funnelled more than 7 billion yuan in cash dividends into the family trust established by Zhang Yong and his wife in the British Virgin Islands. The newly implemented offshore trust tax regulations provide domestic business owners with a three-month transition window — those who voluntarily declare and pay back taxes will be exempt from late fees, while overdue payments will incur penalties and fines. Now, the co-founder's wife is reducing her stake to raise cash by selling shares.

In 1994, Zhang Yong, along with his then-girlfriend Shu Ping, Shi Yonghong and his girlfriend Li Haiyan, pooled together 8,000 yuan. They set up four tables on Sizhi Road in Jianyang County, Sichuan, and opened a hotpot restaurant. In his youth, Zhang Yong disliked studying. After graduating from junior high school, he enrolled in a vocational technical school in Jianyang to learn welding, a programme that guaranteed job placement. It was there that he met his lifelong friend and future business partner, Shi Yonghong.

The hotpot restaurant on Sizhi Road became the first outlet of what would later be known as HAIDILAO. After graduating, Zhang Yong was assigned to work as a welder at the state-owned Sichuan Tractor Factory. None of the four founders had any catering experience — Zhang Yong couldn't even prepare the hotpot base, so the restaurant's flavours were far from exceptional. As Zhang Yong later recalled, "The hotpot taste was mediocre, so to survive, we had to be extra attentive." "Whatever customers asked for, we delivered quickly, and any complaints were met with a smile."

"It worked out by accident, because compared to other cuisines, hotpot has less variation in quality, making service a particularly effective way to stand out from competitors." This became the foundation of Haidilao's signature极致服务 approach. With this strategy, Zhang Yong expanded the business from that four-table shop on Sizhi Road to locations across the country and eventually listed it on the Hong Kong stock market.

In early 2021, Haidilao's share price on the secondary market surged to HK$85.8 per share, pushing its market capitalisation to a peak of HK$450 billion. At that time, Haidilao earned the nickname "Hotpot Maotai". As major shareholders, Zhang Yong and his wife rose to become Singapore's richest individuals. Five years on, that halo has dimmed considerably.

Just days ago, Haidilao issued an announcement about a reduction in holdings by its controlling shareholder — Shu Ping, Zhang Yong's former girlfriend and current wife, through her controlled entity SP NP Ltd., sold 259 million shares of the listed company via block trade, representing 4.65% of the total share capital. The transfer price was HK$10.62 per share, a 6.7% discount to the closing price that day. The老板娘 cashed out HK$2.4 billion in a single move. The following day, Haidilao's share price plunged, dropping over 12% intraday and eventually closing at HK$10.34 per share, leaving its market capitalisation at just HK$57.6 billion — a fraction of what it was five years prior.

Haidilao's golden era was 2021, when its market value hit historical highs. After its Hong Kong IPO in 2018, the company raised capital and embarked on a rapid expansion spree. By 2021, its store count had grown from 273 pre-IPO to 1,443 outlets. The tide turned sharply within 2022. Haidilao's share price experienced a cliff-like decline — market capitalisation dropped from HK$450 billion in early 2021 to HK$85.6 billion by early 2022. It took just one year for hundreds of billions in market value to evaporate. By 2022, the store count had been reduced to 1,349.

Zhang Yong was forced to launch the "Woodpecker Plan" — closing stores, contracting operations, and cutting costs. He admitted that the earlier rapid expansion strategy had been misjudged. While Haidilao's reforms have yielded results, the capital market神话 has been shattered. To this day, its market value remains stuck at low levels, never recovering. In the first half of this year, Haidilao generated revenue of RMB 22.3 billion, up 8%, with net profit attributable to shareholders of RMB 1.8 billion, roughly flat year-on-year. From a financial statement perspective, Haidilao is still growing.

Yet precisely at this juncture, the co-founder's wife chose to cash out heavily — and at a discount. In May, Zhang Yong personally injected HK$150 million into the secondary market, buying 11.35 million shares at HK$13.39 per share. The boss's intent was clear: to support the share price through purchases. But Haidilao remains stuck in the doldrums, and the share price is even slightly lower than Zhang Yong's purchase price four months ago. Just four months ago, the boss spent money to boost the stock; now, four months later, the wife sells at a discount, cashing out HK$2.4 billion and directly undermining the stock price.

When Zhang Yong increased his stake, Haidilao's announcement stated in black and white: "He is confident in the group's overall development prospects and potential growth, and does not rule out further increasing his shareholding at an appropriate time." Now, regarding the wife's reduction, Haidilao's announcement explains: "This sale is purely for her own capital needs and financial arrangements, a matter at the shareholder level." "It bears no relation to the group's business, operations, financial condition, or development prospects." In short — the boss buying in the secondary market signals optimism, and the wife selling in the secondary market also signals optimism. If they are so bullish, why the massive sell-off, and why at the stock's lowest point, at a discount?

This isn't just a matter of attitude; it involves HK$2.4 billion in real money. Recently, the Ministry of Finance and the State Administration of Taxation jointly introduced a policy — tightening tax rules on offshore trusts. The SP NP Ltd. used in this large-scale sell-off is a company controlled by Shu Ping through an offshore family trust set up via UBS in the British Virgin Islands. Haidilao's main stores and operations are in mainland China, but the equity structure controlling the listed company is built under an offshore family trust. These business owners exploited offshore trust tax advantages to defer taxes indefinitely, as long as profits were not repatriated to China. With the new offshore trust tax rules, the structure is now subject to look-through taxation — regardless of whether assets are nominally held in an offshore trust, the actual controller is taxed, uniformly at a 20% individual income tax rate.

In the past, offshore trusts could avoid taxes without distributing funds. Now, that avenue has been blocked. Some suggest that Shu Ping's reduction is likely linked to the new offshore trust tax regulations. Despite Zhang Yong and Shu Ping holding Singaporean nationality, tax law does not look at passports — as long as family, business, significant economic interests, and long-term management focus remain in China, they are still classified as tax residents and must pay individual income tax.

In recent years, Haidilao has maintained generous cash dividends — RMB 4.2 billion in 2023, with a payout ratio of 93%; RMB 4.6 billion in 2024, at 97%; and RMB 3.6 billion in 2025, at 88%. In the first half of this year, the company has already declared RMB 1.8 billion in dividends, with a payout ratio of 103%. Over the past three and a half years, Haidilao has distributed over RMB 14.1 billion in cash dividends to shareholders, essentially distributing nearly all its profits. For a long time, Zhang Yong and his wife held 50% of the listed company's shares. After this reduction of 4.65%, their combined holding has fallen to 45.49%, but their status as controlling shareholders remains unchanged.

Based on their ownership stake, more than RMB 7 billion in cash dividends have flowed into the Zhang Yong couple's BVI family trust over the years. With the offshore trust tax rules now in place, these domestic business owners have a three-month transition window — voluntarily declaring and paying back taxes avoids late fees, while delays incur penalties. Now, the co-founder's wife is reducing her holdings to raise cash by selling shares. After years of listed companies funneling tens of billions in cash dividends to offshore family trusts, some of that must now be returned to the tax authorities' accounts. Money is no longer something you can simply distribute at will.