The wave of back tax collection related to offshore trusts is spreading to enterprises like Haidilao.

On September 9, a thought-provoking scene unfolded in the Hong Kong stock market.

Haidilao's share price faced massive sell-offs during the opening call auction, hitting an intraday low of HK$10, down 12.13% from the previous trading day's closing price of HK$11.38. By the close of the day, the stock was quoted at HK$10.34, down 9.14% for the day, with total trading volume expanding to HK$37.81 billion, hitting a new low in nearly four and a half years.

The trigger for market sentiment was a reduction transaction of 259 million shares. It is reported that Shu Ping, wife of Zhang Yong, co-founder, chairman and CEO of Haidilao, sold the above shares through the shareholding entity of the family trust.

But back in May this year, Zhang Yong himself just increased his holdings of 11.35 million Haidilao shares at a price of HK$13.39 per share.

Just a few months later, family members chose to sell a large number of shares, and this contrast made the market start to look for another explanation.

The answer may not be just "cashing out".

Market participants speculate that it may be related to the new offshore trust tax regulations recently issued in the Chinese mainland.

Countdown to the "Closing Net" of Offshore Trusts

The so-called new offshore trust tax regulations refer to the "Announcement on Matters Concerning Individual Income Tax of Offshore Trusts" (No. 21 of 2026) jointly issued by the Ministry of Finance and the State Taxation Administration on July 24, 2026, and the supporting collection and management announcement (No. 15 of 2026) issued by the State Taxation Administration on the same day.

This "Announcement No. 21 for Closing the Net of Trusts" as called by insiders has completely rewritten the individual income tax collection and management rules for offshore trusts.

According to the original text of Announcement No. 21 of the State Taxation Administration of the Ministry of Finance, when a resident individual puts property into an offshore trust and obtains income through an offshore trust, they shall declare and pay individual income tax in accordance with regulations. The new regulation establishes a full-cycle taxation logic of "taxable upon transfer when injecting assets, transparent penetration during the trust's existence, and liquidation upon termination", levying individual income tax at a 20% tax rate in the three links of establishment, duration and termination respectively.

The most critical point lies in its penetration intensity.

The announcement clarifies that no matter how many layers of BVI and Cayman shell companies are nested in the trust, they are all regarded as "transparent entities" in taxation, and the tax is levied through the underlying capital contributors; the income generated during the duration of the trust, whether actually distributed or not, is counted on the resident individual and declared annually.

The 90-day supplementary declaration window set for existing trusts makes the pressure of supplementary tax payment suddenly specific and urgent.

According to the practical interpretation article issued by Shanghai Jinmao Tiancheng Law Firm on September 8, Article 17 of Announcement No. 21 sets a 90-day supplementary declaration window. Resident individuals shall go through the supplementary declaration before October 22, 2026 for the unpaid taxes payable arising from the injection of assets into offshore trusts during the period from January 1, 2023 to December 31, 2025. Compliant supplementary declaration within the window period can be exempted from late payment surcharge; overdue will face the recovery of late payment surcharge, and even the risk of being identified as tax evasion.

From the release of the announcement to the deadline of the window, there is less than three months in total. For the first generation of entrepreneurs who hold huge offshore trust assets and whose historical dividends have never been fully taxed, this means that they need to prepare sufficient cash in a very short time.

And Haidilao is just one of the companies seen by the market in this change.

Buying with the Left Hand, Selling with the Right Hand

Over the past decade or more, offshore trusts have always been an important tool for Chinese entrepreneurs to allocate global wealth. Entrepreneurs put part of their assets into overseas trust structures, and through professional institution management, realize wealth inheritance, risk isolation and family governance.

For many listed company founders, such arrangements are not unfamiliar. Especially among Hong Kong listed enterprises, many founding families hold shares through offshore entities such as BVI (British Virgin Islands) and Cayman Islands, and then realize long-term control through trust arrangements.

Zhang Yong and Shu Ping of Haidilao are typical samples.

Public information shows that the two built a double-layer offshore trust before Haidilao's Hong Kong listing in 2018 — Apple Trust under Zhang Yong and Rose Trust under Shu Ping, indirectly holding Haidilao's equity through BVI companies ZY NP Ltd. and SP NP Ltd. respectively, both of which are discretionary trusts with UBS Trustees (B.V.I.) as the trustee; the relevant wealth was thus placed in the combination of shell companies and trusts registered in the British Virgin Islands.

In addition, according to media reports, Zhang Yong and Shu Ping obtained Singapore nationality many years ago. Shu Ping has long served as the chairman of Tehai International, the overseas listed entity of Haidilao, making this arrangement of "BVI trust + Cayman/overseas listed entity + Singapore platform" have the functions of cross-border shareholding, family governance and long-term control. This reduction transaction of 259 million shares exactly comes from SP NP Ltd.

According to the announcement published by Haidilao on the Hong Kong Stock Exchange after market close on September 9, SP NP Ltd., a member of the controlling shareholder group, sold 259 million shares of the company through block trading on September 8 at a price of HK$10.62 per share, accounting for about 4.65% of the total issued shares. This price is a 6.7% discount from the closing price of HK$11.38 on the previous trading day, with a total cashing out amount of about HK$27.51 billion (equivalent to about RMB 23.52 billion).

On the evening of September 9, Haidilao issued an announcement to further respond to the matter of the founder's wife reducing her shareholding through block trading.

In the evening announcement, Haidilao stated that this share sale accounts for about 4.65% of the total issued shares of the company, which is purely for SP NP's own capital needs and financial arrangements, and is a personal matter at the shareholder level, having nothing to do with the group's business, operation, financial status and development prospects. This transaction does not involve the issuance of new shares by the company, and will not dilute the rights and interests of other shareholders.

However, there is an irreconcilable contrast between this share reduction and Zhang Yong's previous public statements.

According to Haidilao's earlier announcement, in May this year, Zhang Yong increased his holdings of 11.35 million shares of the company in the public market at a price of HK$13.39 per share, spending a total of about HK$152 million. At that time, he clearly stated that he was full of confidence in Haidilao's overall development prospects and potential growth, and "does not rule out further increasing his holdings of the company's shares at an appropriate time".

However, only four months later, SP NP Ltd. held by Shu Ping's trust sold shares several times the size of the increased holdings at a discounted price of HK$10.62 — about 21% lower than Zhang Yong's share increase price.

For this operation of "buying with the left hand and selling with the right hand", Morgan Stanley stated bluntly in its research report released immediately that it is "surprising". Morgan Stanley believes that this share reduction will put pressure on market sentiment in the short term, until investors regain confidence in the company's earnings prospects and are assured that no further asset divestiture will occur.

May Be Related to Announcement No. 21

Although Haidilao's official attributes the share reduction to "shareholder's personal financial arrangement" and does not admit its relevance to supplementary tax payment, the market generally tends to connect it with Announcement No. 21.

Morgan Stanley speculated in the research report that this share reduction may be related to the new offshore trust tax regulations recently issued in the Chinese mainland.

Some media reports specially pointed out that although Zhang Yong and Shu Ping have obtained Singapore nationality, since their main income comes from the Chinese mainland, they may still be judged as taxable objects — the key to judging the taxable scope of China's individual income tax lies in the tax resident identity, not nationality.

A number of market institutions have given calculations based on this.

According to the estimates cited by media such as Sina Hong Kong Stock, under the new regulations, Haidilao has accumulated dividends of about 14 billion yuan in the eight years since its listing. Zhang Yong and Shu Ping hold about 50% of the shares, and the trust account gets about 7 billion yuan. According to the 20% tax rate, they need to make up about 1.4 billion yuan in tax; plus the corresponding about 500 million yuan tax for this share reduction cashing out of about 23.52 billion yuan, the total supplementary tax scale is about 1.9 billion yuan, which is basically equivalent to the income from this cashing out.

It should be noted that the above figures such as "1.4 billion yuan" and "1.9 billion yuan" are all deductions made by third-party institutions based on public data, not the final tax amount verified by the tax authorities.

As of press time, Haidilao and the couple Zhang Yong have not publicly confirmed the connection between the share reduction and supplementary tax payment.

But a logical chain has clearly emerged: the shares in the offshore trust are paper wealth. To pay supplementary tax, cash is needed, and to get cash, shares have to be sold — even if they are sold at a discount at a phased low point of the share price.

The Cooling of the Hot Pot Business Itself

If we shift our attention from the trust terms to Haidilao's financial statements, the company is actually facing dual pressures.

On the evening of August 25, Haidilao disclosed its 2026 interim results. In the first half of the year, the company achieved operating income of 22.337 billion yuan, a year-on-year increase of 7.9%; core operating profit was 2.513 billion yuan, a year-on-year increase of 4.4%. But the net profit attributable to shareholders was only 1.767 billion yuan, a year-on-year slight increase of about 0.47%, almost stagnant.

The reason why the profit growth rate is far behind the revenue growth rate lies in the migration of the revenue structure.

In the first half of the year, the main growth driver came from non-main brand businesses — takeout revenue was 2.051 billion yuan, a year-on-year surge of 121.2%; other restaurant revenue was 1.271 billion yuan, a year-on-year increase of 113.1%. However, the operating revenue of traditional Haidilao self-operated restaurants decreased by 4% year-on-year, and the per capita consumption of customers dropped from 97.9 yuan to 97 yuan. Although the table turnover rate increased slightly from 3.8 times per day in the same period of last year to 3.9 times per day, the improvement range is limited.

A more unavoidable fact is that as of June 30, 2026, the number of Haidilao brand restaurants has decreased year-on-year — the number of self-operated restaurants dropped from 1322 to 1267. This hot pot leader, once famous for its "unlearnable" service and radical expansion, is moving forward slowly on the track of contraction and repair.

Epilogue

From a more macro perspective, this share reduction of Haidilao may only be a slice of a larger picture.

The implementation of Announcement No. 21 means that the "offshore trust tax avoidance" routine commonly used by the first generation of Chinese entrepreneurs in the past two decades has officially failed.

The common characteristics of this group of entrepreneurs are: they were poor when starting a business, became rich suddenly after listing, most of their net worth exists in the form of listed company shares, and realized asset isolation and tax deferral through offshore trusts. Now, the penetrating tax rules make these dividends and appreciation accumulated in trusts that have never been taxed have a clear tax bill for the first time.

According to media reports, it is not only Haidilao that faces similar supplementary tax pressure. The actual controllers of private enterprises such as Oceanwide and SOHO China have all been listed by the market as potentially affected parties.

The demand for supplementary tax payment is being transformed into the share reduction pressure of a large number of major shareholders of Hong Kong stocks and Chinese concept stocks, which is exactly a variable hanging over the Hong Kong stock market before the deadline of the supplementary tax window on October 22.

When the penetrating tax rules no longer leave space for gray areas, those wealth that was once "legally suspended" in offshore structures will eventually return to where it should go — and selling shares is just the most visible step in this long liquidation process.

This article is from the WeChat official account "Alpha Workshop Research Institute", author: Su Di, published with authorization from 36Kr.