Dear investors and analysts, good morning and good evening. Thank you very much for joining Super Hi's First Half 2024 Earnings Conference Call with us today. We have Ms. Yang Lijuan, Executive Director and CEO, and Ms. Qu Cong, Chief Financial Officer and the Board Secretary. Please note that today's discussion may contain forward-looking statements, including without limitation, statements about our strategies and business plans, as well as our expectations about our business prospects, such as the future growth.
Please be reminded that during the call, our comments and responses to your questions reflect management's view as of today only. Please refer to our latest safe harbor statement in the earnings press release, which applies to this call. This call will be conducted in Chinese with simultaneous English interpretation provided by an external agency. In case of any discrepancies, the Chinese version shall prevail.
The presentation materials for the meeting have been uploaded to the company's investor relations webpage. Please review them at your convenience. We now invite Ms. Yang Lijuan, Executive Director and CEO of Super Hi International, to review our performance for the first half of 2024.
Thank you. Host, and good evening, everyone. This is Yang Lijuan, Executive Director and CEO of Super Hi International. This is my first interaction with you all since formally taking up this post at Super Hi. I am very grateful for your attention and the support given to our company. Over the past two months, I have visited Super Hi restaurants across our major markets, and I would like to share with you three key observations.
First, our store management is showing overall improvement. Our employees, store managers, and management teams across all countries are continuously enhancing their efforts in guest acquisition and employee management. Here, I extend my gratitude to all employees for their dedication in the first half of this year.
Second, we are seeing diversification and expansion of our guest base. We are establishing more touch points with both new and existing guests, whether they are Chinese or local, during peak or off-peak hours, or for special occasions like family dining, late-night snacks, or birthday celebrations.
Thirdly, our potential market is substantial. There are numerous opportunities to explore in hot pot, fast food, and formal dining segments. For instance, in the U.S. market, we currently operate only 13 stores, while the restaurant industry scale is said to be at $1.1 trillion in the U.S., indicating significant room for expansion and exploration.
Serving as the CEO of Super Hi International is both a challenge and an opportunity for me. It is challenging because we face more than 10 different markets, and many mature operational tools in China may not be directly applicable. At the same time, it is an opportunity because the market is huge and the underlying logic of management is interconnected. We have extensive time-tested experience and methods in guest acquisition, employee management, and store operation.
Now, let me share with you the detailed performance for first half of 2024 of Super Hi. In the first half, global economic activities continued its recovery, although significant inflationary pressures persisted, posing challenges to raw material and labor cost. Regardless of external factors, our focus remain on enhancing store management across all locations, including environment, service, product quality, and food safety, to consistently improve guest satisfaction. In the first half of 2024, we had 14.5 million guest visits, representing a year-on-year increase of 17.9%.
Our average table turnover rate reached 3.8x per day, an increase of 0.5x compared to 2023, approaching the peak season level of the second half of 2023. In addition to economic recovery, the improvement in table turnover rate is supported by our management approach.
Firstly, performance evaluations and profit sharing for management at all levels are directly or indirectly linked to table turnover rates. We believe that the effective store management and high guest satisfaction naturally lead to improved table turnover rate. Therefore, we leverage KPIs, performance assessments, and operational procedures to motivate all management levels to actively enhance guest satisfaction and table turnover rates.
Since beginning of this year, we have categorized and summarized the key management points of our stores into a management tool called Three Tables, including the business table focusing on operating results, the management table addressing management results, and the foundation table outlining management actions. We use these tables to guide store managers in their daily work of managing employees and guest acquisitions.
Secondly, we utilize country managers as local management leads, while headquarters are providing middle office support through method summary, tool optimization, and data analysis. We identify effective business improvement opportunities and methodologies, which we then replicate and implement company-wide.
Therefore, our stores across various locations have made innovative efforts in expanding guest base and covering diverse consumption scenarios. These include organizing activities around holidays, concerts, tourist seasons, and sporting events, as well as implementing three-kilometer treasure hunt initiatives to target specific scenarios such as family dining, late-night snacks, and birthday celebrations.
These approaches enable our stores to reach more local guests and build guest loyalty. In the first half of 2024, we opened eight new stores, five in Southeast Asia, two in North America, and one in East Asia, and entered the Philippines market for the first time. We have also closed one long-term underperforming store.
As of June 30th, 2024, we operated a total of 122 Haidilao stores across 13 countries. Regarding new store openings, we maintain our bottom-up strategies without setting specific targets. Country managers take primary responsibilities for local store openings, with headquarters providing risk control on new store quality and evaluating the rationalization of store opening pace in each country.
Among the eight new stores opened this year, six have already achieved a stable profitability, demonstrating a significant improvement in new store quality versus previously. Additionally, we periodically review existing stores. For long-term underperforming stores, we implement measures such as performance improvement coaching, business model transformation, temporary restructuring, or permanent closure in order to enhance the performance or mitigate losses. First half of 2024, our revenue reached $371 million, a 14.5% increase year-on-year.
For the same period in 2023, the growth primarily results from the improvement in table turnover rates we mentioned before and the expansion of our store network. We believe that when our guest acquisition strategies are effective, positive business results naturally follow. In our business management, we maintain a constant focus on guest satisfaction. Since the beginning of this year, we have actually implemented stricter store assessments and management practices.
We always remain vigilant, recognizing that as business improves and guest inflow increases, any relaxation in implementation in our four-color card evaluation system could potentially alienate more guests, impacting our long-term reputation and operations. Therefore, we remain clear-headed, maintain high standards for store environment, service, product quality, and food safety. Correspondingly, rather than solely pursuing sales and profits, stores are instructed to prioritize adequate staffing and operational capabilities to uphold guest satisfaction.
In terms of implementation, we adopt a model of assessments and examinations instead of traditional training at both headquarters and regional offices in each country. Through regular and ad hoc inspections and evaluations, we foster inter-store learning and operational improvement. We continue to organize Haidilao's traditional position star competition, establishing training and competition for various positions to enhance the operational capabilities.
Furthermore, we encourage outstanding store managers and above to manage two or more stores through dual management and multi management approaches, facilitating the replication of effective management practices and the nurturing a pipeline of reserve talent. Moreover, we recognize that products are the most direct medium of a guest experience. Since last year, we have designed country managers as the primary responsible parties for product development in their respective markets, with headquarter providing resource support.
In the first half of 2024, we optimized and launched over 500 new products across various countries, spanning categories such as soup bases, dishes, snacks, and beverages, such as newly launched pepper chicken soup base, a golden sour fish soup base in East Asia, saffron chicken soup base in the UAE, and spicy lamb spine hot pot in the U.K., have all been well-received by local guests.
We are also actively exploring the addition of a seafood steamer and grill options to our existing hot pot restaurants, diversifying consumer choices and experiences across different dining periods. Furthermore, from headquarters to regional levels, we continue to optimize our supply chain, actively seeking local quality suppliers to ensure product quality whilst strengthening cost control and operational efficiency. Regarding our membership system, as of the end of first half of the year, our overseas membership exceeded 5.22 million.
Headquarters provides the tools and the methodologies, while individual countries and stores conduct more intensive and proactive operations in social media, private domains, and community engagement locally, enhancing online buzz and guest loyalty. A lot of investors and analysts are keen to understand how the company's business strategy might evolve under my leadership as the CEO. For Super Hi International, our goal of becoming a leading global comprehensive restaurant group remains steadfast.
As a result, our development strategy will maintain stability over an extended period, focusing on continuously enhancing the guest dining experience, expanding our restaurant network, improving restaurant performance, actively developing and exploring new business formats, and strengthening headquarters' capabilities to empower stores. Haidilao Hot Pot Restaurants constitute our core business, and our priority is to safeguard and develop this foundation. This involves two main aspects: enhancing internal management and expanding external markets.
In terms of internal management, we recognize that hot pot dining is inherently a social experience, typically requiring over an hour for finishing a meal. Following guest acquisitions through various methods, we place a significant emphasis on retention. This requires building strong connection between employees, stores, and guests, delivering prompt, accurate, and friendly service, and excelling in international management.
Only through these efforts can we truly succeed in guest acquisition and repeat customers, reflected in improved table turnover rates. In terms of external market expansion, we observe that overseas markets offer substantial potential and demonstrate a high acceptance of hot pot and Chinese cuisine. As we refine our internal management and successfully localize our products and services, we are witnessing an increasing number of local customers becoming our guests, expanding our market reach.
Our Beverly Hills store in the U.S. serves as a good example. With improved internal management, we have attracted a growing local guest base, leading to continued improvements in table turnover rates. This demonstrates the feasibility of a successful guest localization even in the U.S. market. Beyond our core business, we are focusing on our second brand business.
This year we launched the Pomegranate Plan, symbolizing that each new business within the group will flourish independently while contributing to our comprehensive restaurant group, just like pomegranate seeds. To support this, we have assembled a team of capable and innovative management personnel across store operations, product development, brand marketing, and other key areas. We are providing resources to support innovation and entrepreneurship, including relevant incentive measures.
Concurrently, we are implementing multi-management and dual management approaches, encouraging more high-performing individuals at the country manager level and above to participate. For instance, our Hao Noodle project in the U.S. is currently under dual management by a U.S. country manager. This approach enables better coordination of local personnel and supplier resources, resulting in rapid improvement in business performance.
Looking ahead, we plan to continue recruiting country managers to incubate and compete in fast food and halal hot pot segments, injecting further dynamism into our second brand initiative. As the CEO, my main focus is on improving in-store conditions and making sure that the KPIs and compensation structures of our managers at all levels are truly aligned with our customer satisfaction and business goals, reflecting our management philosophy of aligned interest disciplined management.
Drawing from Haidilao's 30 years of management experience, we believe that when we correctly align interest, we can achieve optimal results in guest satisfaction, store performance improvement, and new store expansion and new business incubation. This concludes my overview of our business performance for the first half of this year. I will now invite CFO Qu Cong to present our financial results.
Thank you, Ms. Yang. Good evening, everyone. I am Qu Cong, CFO and the Board Secretary of Super Hi International. I will now present the company's financial results for the first half of 2024. In the first half of 2024, company achieved a total revenue of $371 million, representing 14.5% increase year-on-year. Haidilao Restaurant operating income contributed $356 million, accounting for 96% of overall revenue, remaining our primary revenue driver. Regarding the geographic distribution, Southeast Asia, $196 million, accounting for 54.9%, continuing to be our largest contributing region.
North America, $73.89 million, representing 20.7%. East Asia and other regions contributed $43.24 million, $43.49 million respectively, accounting for 12% of total revenue respectively. In terms of cost and expenses, raw material and consumables amounted to $125 million.
Our gross profit margin reaches 66.4%, improvement of 0.1 percentage point versus the same period last year, primarily thanks to our ongoing supply chain optimization efforts. Staff cost at $126 million representing 34% of revenue, increase of 8.8% year-on-year, mainly due to two factors. In order to ensure guest satisfaction and maintain quality of our four-color card system, we increased our store staffing.
Second, some countries raised their statutory minimum wage requirements, and in certain instances, we have proactively increased employee wages, hence the increase in the overall labor cost. Rental expenses of $9.1 million, accounting for 2.5% of revenue, an increase of 0.6% year-on-year. This increase was driven by higher property management fees and rent due to new store openings and a store under construction.
Second, increased variable rent payments resulting from higher restaurant revenues. Utility expenses amounted to $13.7 million, representing 3.7% of revenue, a decrease of 0.2% year-on-year, primarily due to the expanded revenue base.
Depreciation and amortization, $39 million, accounting for 10.5% of our revenue, a decrease of 2.4% year-on-year. This reduction is attributable to the increased revenue base and the conclusion of a depreciation for certain fixed assets. Travel cost and operation expenses are $36.3 million, representing 9.8% of our revenue, an increase of 0.5 percentage points year-on-year. This increase is primarily due to the expansion of our store network and associated business development needs.
In the first half of this year, despite facing inflationary pressures from rising global raw material and labor cost, our restaurant's level operating profit margin reached 8.7%, an increase of 0.4% from 8.3% in the same period last year. We believe this is driven by the increase in table turnover rate, which has led to enhanced business operating efficiency. Company operating profit first half of this year, $20.87 million.
Our operating profit margin for the first half of this year, 5.6%, a decrease of about 0.9%. This decrease was mainly due to various countries reduced pandemic-related government subsidies, resulting in a decrease in our non-operating income of $1.4 million, a 40% decrease versus same period last year. in May this year, we issued ADRs on U.S. Nasdaq Stock Exchange, achieved a dual listing, incurring one-time listing expenses of $2.46 million first half of this year. Company's after-tax net loss was $4.65 million.
This was primarily due to a foreign exchange loss of $19.53 million, resulting from exchange rate fluctuation in the first half of 2024. These fluctuations led to non-cash foreign exchange losses from the evaluation and items denominated in currencies other than US dollars.
In terms of operating cash flow in the first half of 2024, it amounted to $48 million, a decrease of $15.7 million compared to the same period last year. This decrease was mainly due to higher inventory levels at the end of 2023 in anticipation of business growth, resulting in more accounts payable being settled in the first half of 2024. This accounts payable fluctuation led to a cash flow of approximately $12.7 million more compared to the same period of last year. Additionally, the listing expenses of about $2.46 million and the reduction in government subsidies, about $1.4 million, contributed to the decrease.
Overall, company's operating cash flow remains healthy and stable, capable of supporting our daily operations. Capital expenditure for the first half of the year is $17.7 million, primarily used for investing in new store openings. Key restaurant performance indicators. The first half of this year, we had approximately 14.5 million customer visits, an increase of 17.9% versus same period last year. Company's average table turnover rate is 3.8x turns per day, increase of 0.5x turns per day compared to the same period last year.
Our average spending per guest was $24.6, a decrease of $0.9. Approximately 90% of this decrease was due to continuous appreciation of US dollars this year, resulting in a lower display of a lower currency customer spending when converted to US dollars. When viewed in local currencies compared to the same period last year, most of the countries maintained stable or slightly increasing average spending per guest.
However, North America, we saw a decrease in average spending per guest, mainly due to more diverse and flexible marketing activities implemented since the second half of last year, targeting off-peak periods and specific consumer groups to better stimulate consumer demand. Average daily revenue per restaurant was $17,200, an increase of $1,600 compared to same period last year. All of our four major regions showed improvement versus same period last year. East Asia, North America demonstrating more significant improvements.
For East Asia, table turnover rate for first half of the year was 4.1x per day, increase of 1x per day compared to last year. This was mainly because of improvement in Korea, initial positive results from management adjustment in Japan, and temporary closure of two underperforming stores in Japan, which reduced their drag on local table turnover rates.
North America, for the first half of this year, 4.1x per day, increase of 0.9x per day. At the same time, average spending per guest was $42.6, a decrease of $6.5. This was due to more flexible marketing measures in the U.S. and Canadian market to attract a more diverse customer base. Southeast Asia, turnover rate, 3.7x per day, increase of 0.4 turns.
Average spending per guest, $19.3, a decrease of $1, mainly due to new stores being opened, and second, depreciation of local currencies against the US dollars. Other regions. Table turnover rate in other regions for the first half of this year, 3.9 turns, an increase of 0.4 turns compared to the same period last year.
The average unit price per customer increased $1.7 versus same period last year, mainly due to overall adjustment in stores and introduction of weekend service charges in Australia. First half of 2024, average table turnover rate for our 103 same stores was 3.8x per day, increase of 0.5x per day compared to the same period last year. Same-store revenue growth for the first half was 8.2%. Same-store performance by region largely follows the overall trends, and I won't repeat the details. This concludes our review of the performance for first half of this year. We now open the floor for questions.
Thank you, management team and I'd like to remind everyone, if you have any questions, please press star followed by one and we will invite questions. We now welcome the first question. The first question comes from CICC, Liu Ningfei. Please welcome.
Thank you, management team. I would like to thank Ms. Yang and Ms. Qu . Under your leadership, we have seen such great results. I have two questions here. One is on the future development strategies, as well as your opening pace, as well as your ideas and philosophies going forward. For instance, in terms of your new store openings, what are the rooms of further improvement and the strategies as such? Thank you.
Can I please ask you to repeat your question? We didn't have a good signal just now.
My first question is with respect to your future targets and the performance, for instance, for the next one to three years in terms of store opening pace. Second, for your new business format, what are your plans? My second question is mainly based on observation in the following regions. What are the activities that you would be undertaking, for instance, in terms of your incentives and in terms of saving cost and improving revenue? Where would these come from?
Thank you for your question. First of all, for your first question, our strategic target is to become a leading global comprehensive restaurant group, and this remains steadfast. This would include, for instance, continue to enhance the guest dining experience, to develop our second brand, and strengthen headquarters' capability to empower stores.
Haidilao Hot Pot Restaurants continue to be our core business, and our priority is to safeguard this foundation. It involves two aspects, one internal and second external. For internal, we recognize that hot pot dining is inherently a social experience, typically requiring over an hour of finishing a meal.
Following guest acquisitions through various methods, we place a significant emphasis on retention. This requires building strong connections between employees, stores, and guests, delivering prompt, accurate, and friendly services, and excelling in internal management. Only through these efforts can we truly succeed in new guest acquisition and repurchase, reflected in improved table turnover rates. We have Three Tables this year. This would be our business tables, management table, and foundation table. If we do well in these three areas, we will be serving our customers better.
In terms of the external market, it's actually a huge market. There's a lot of acceptance for hot pot and Chinese cuisine. We can see that actually more and more local customers are becoming our guests, and there is quite a lot of potential. For instance, the Beverly Hills store in the U.S.
With improved internal management, we have attracted a growing local guest base, and we continue to see improvements in table turnover rates. This demonstrates the feasibility of a successful guest localization even in the U.S. market. Beyond the core business, we are focusing on our second brand initiative. This year, we have launched a Pomegranate Plan, symbolizing that each business within the group will flourish independently, whilst contributing to our comprehensive restaurant group, just like pomegranate seeds.
To support this, we've assembled a team of capable and innovative management personnel across the store operations, product development, brand marketing, and other key areas. We are providing resources to support innovation and entrepreneurship, including relevant incentive measures. Concurrently, we are implementing multi management and dual management approaches, encouraging more high-performing individuals at the country manager level and above to participate.
For instance, our Hao Noodle project in the U.S. is currently under dual management by a U.S. country manager. This approach enables better coordination of local personnel and supplier resources, resulting in rapid improvements in business performance. Looking ahead, we plan to continue recruiting country managers to incubate and compete in fast food and halal hot pot segments, injecting more dynamism into our second brand initiative.
As CEO, my main focus is on improving in-store conditions and making sure that the KPIs and compensation structures for managers at all levels are truly aligned with our customer satisfaction and business goals, reflecting our management philosophy of aligned interest and disciplined management. Drawing from our 30 years of experience, we believe that when we correctly align interest, we can achieve optimal results in guest satisfaction, in store performance, in new store expansion, and new business incubation. Thank you for your question.
Thank you for your question, and let's wait for the second question. Second question comes from Zeng Jun from Huatai Securities. Welcome.
Can everyone hear me okay?
Yes, we can.
Thank you, management team, for the opportunity. This is Zeng Jun from Huatai Securities. First of all, I would like to congratulate the company for such a great result, and also congratulate Ms. Yang on your new post.
I have two questions, and one is that we have heard you pay great attention to guest satisfaction and localization. Have you actually calculated or have a statistic for local guests and the membership percentage of local guests, as well as the repeated visits by them? In the meantime, for table turnover rates, and we can see that 3.8x is already quite high. Going forward, what's your forecast for table turnover rate? How to balance the further improvement as well as the flexibility and further improvement of customer's experience.
Second question on store opening. We can see that you have opened eight new stores. In terms of your whole year expansion, are there any changes? Can you please also share with us the stores in your pipeline as well as your plans for opening stores in different regions?
We are also delighted to see the Pomegranate Plan. Generally, when we look at restaurants, a lot of the times when the main brand goes to a certain level, they then go on to incubation of new brands. For Super Hi International, it's actually in the early stages. What are the considerations for coming up with this strategy? For our main brand, Haidilao, as well as our new brands, what are the synergies between those two? Thank you.
Thank you for your question, and for your first few questions about the guest base and table turnover rate, and I'll take those, and Ms. Yang will answer the other questions. For our guest base, for instance, local guests as well as Chinese guests, and this is a question that a lot of people focus on. We used to talk quite a lot of localization as well as some quite mechanical calculation methods about local guests. Later on, we realized that this is actually not the right way to look at our performance.
Right now, as a result, we have really weakened the KPI of localization. For a restaurant, if they have put in the effort, we will actually be able to see the increase of the table turnover rate. We have recently visited the U.S. market. Apart from what Ms. Yang mentioned about Beverly Hills, we do see a lot of local guests, and the manager of that store is also very hardworking. Through his hardworking, we can also see that the local guests in the past was not a lot, and now 30%-40% of the guests are local new guests.
These new guests, they are not necessarily brought by Chinese friends, and they came into our shop on their own. We have another shop in Los Angeles, and before we changed the manager of the store, this was quite weak. Local customer was less than 5%. With the new manager in place, we have seen that in terms of our staff language capabilities have improved.
In the local social media, we also see quite a bit of interaction, and the local restaurant visits of local customers increased to 20%. These are not yet 50%, but we do see a significant increase with further room for growth. Looking at the whole global market, for our global customers and the Chinese customers, it is against one to one. For Southeast Asia and East Asia, these are quite similar to China, and the local customers will be higher, about exceeding 60% to even 80%.
If we look at Europe and America, with the U.S. as an example, the local guest rate. Percentage is below 50%, but with our restaurant manager's efforts, this ratio continue to improve. When you talked about the table turnover rate, first half of this year, 3.8x . Last year, 3.3x . The second half of last year, it was Q3 and Q4, 3.8x and 3.9x .
Q3 and Q4, they are unique in that Q3 is the summer holiday, so some of the overseas students will leave, but there will also be some tourists. Q3 is very complicated, and Q4, because we are in the northern hemisphere, it will be quite cold, and there are a lot of festivals. Q4 is our peak season. Of course, we hope that our table turnover rate for each quarter, each month, will continue to improve. Looking at July and August, we have made progress versus last year and Q1 and Q2 this year versus last year. From mid of last year, we have seen a good result in terms of the table turnover rate.
For Q3 this year, we think that the growth will narrow, but overall speaking, it is still on a growing trajectory. This is on table turnover rate. In terms of the membership, as well as repeated purchase or visits. Overall speaking, for overseas customers, it is roughly the same, and because for the membership, we have a privacy protection policy in place, so we cannot see their nationalities.
Overall speaking, we do not see any major changes, or it is hard for us to distinguish simply from looking at the membership numbers. Roughly speaking, the repeated visits will be about 4x per year, so this is quite stable. Your third question is about the store opening. First half of this year, we opened eight new stores.
For this year, actually, on a monthly basis and in terms of our negotiation under contract and the construction, as Ms. Yang has mentioned earlier, we have the bottom-up management style. We do not have any targets set for them. There are about a dozen currently under plan. For these restaurants, they will need to meet the local requirements. There will be some emergencies beyond our expectation. In terms of the benefits, it is packed with the bonus and the compensation for the local country managers.
Therefore, we do believe that we will see very good results because they are given proper incentives. Those are the answers for your first three questions. Your fourth question for our second brand and the Pomegranate Plan, as well as the relationship with the main brand. We will pass the floor to Ms. Yang.
Thank you. Zeng Jun from Huatai. For our Pomegranate Plan, you have asked why we are now working on this despite not having a large number of stores overseas. At the moment, for Super Hi, our overall strategy is to become a global leading comprehensive dining company. This is built on the foundation of a multi-brand. For the Pomegranate Plan, it is based on this. At the moment, working on multi-brand, our main target is from supply chain overseas.
A lot of these restaurants, they are quite spaced out, quite further away from each other. If we have a multi-brand in terms of the management, for instance, in the U.S., the country manager, they manage both Haidilao as well as Hao Noodle. We can see the benefits and the results.
The incubation of the multi-brand, we have accumulated a lot of experience in China. This year, we are already seeing good results, for instance, in China. Yanqing is going to be further developed. From this part, for instance, barbecue, this is quite similar to hot pot. Going forward, we will also try our best to leverage those brands that are very close to our core business. In China, Yanqing and Haidilao is the same as the relationship of Haidilao and Hao Noodle in the U.S.
In terms of store expansion and the usage of raw materials, for instance, beef and from various parts of the cow could be used. We already have some successful experience. We can replicate that to the overseas market. We do have mature experience in this regard.
In terms of the incubation of the business, combining with the comprehensive capability of our team, this is what we are working on. We also have halal hot pot. We have prepared this for over a year. We also have other noodle shops and rice shops, snack shops, and spicy snack food, et cetera. At the moment, we look at the stores that are more easily to be aligned with our advantage business core brand at the moment.
Going forward, we will have a multi management and dual management model, because when you manage the second store in terms of the labor cost as well as the management efficiency will be greatly improved. In addition, for our entrepreneur incentive, if from zero to one they succeed, we will give out staged incentives.
For Hao Noodle and Yanqing at the moment, those are thanks to this new model and for our excellent teams. We can also see that they are very well encouraged, and such passion coming from this management team and experience is very welcoming. They have been working on this for over a decade. All of these experienced staff are coming out to establish this new business from zero to one. We are very positive going forward, we will continue to solicit new business bids and to continue to contribute to the dynamism and the development of our second brand plan. Thank you very much.
Thank you for your question. Our next question comes from Richard Lin from SPDB. Thank you.
Thank you company management for giving me this opportunity. Three questions are here. Firstly is for Ms. Yang, quite a general topic. Ms. Yang, since joining from Haidilao to Super Hi, in terms of business development since joining, what is the biggest challenge and how have you coped with this? This is a very broad question.
Secondly, regarding store opening. For the store locations in Southeast Asia, the percentage is very high and the new stores are mainly based in Southeast Asia. I would like to know internally how much room there is still for Southeast Asia store opening. For U.S. or North America, we only have 13 stores there and U.S. is a huge market. Going forward, is it possible that you might move from Southeast Asia to North America?
Thirdly, for first half of this year, your table turnover rate has increased greatly. However, the operating leverage has not fully reflected. For instance, your labor cost continues to be very high in your revenue. We have heard that you have put in more incentives as well as adjustment of wages, et cetera. long-term speaking for our operating margin, what is the further room for growth or internally in the company, do you have a restaurant margin target that you are benchmarking to, that you hope to achieve? Thank you.
Thank you for your question. Let me answer your two questions in the latter part. First you asked about Southeast Asia. We have a lot of stores. Yes, indeed, 70%, five out of the eight new stores are located in Southeast Asia. This is mainly that being organized by our country managers. For these Southeast Asia countries, they already have quite a large base, and that is why we have this high percentage.
For various locations in terms of the support and incentives that we have given them, they are all aligned. In terms of the policies, there is no differentiation to really give any priorities to any location whatsoever. We have the same policies globally.
Secondly, you asked about the further room for expansion in Southeast Asia. Actually internally, we have never really defined a certain country or a certain region for the store opening. If we were to discuss about this, whether the number is correct or not, this will actually mislead our team. This will also limit our team's capability.
With our localization, we believe that we would be able to receive a better word of mouth and reputation as well as the acceptance of the local guests there. Through our hard work, we would be able to grow bigger and bigger.
To give you an example, in our new store opened this year, we have the penetrated stores in the lower tier cities in Malaysia, and we have already seen very good results with sustained profitability. These cities, they do not have a huge population. However, locally in these markets, one is that the staff localization, we have done very well. We can unite them very well.
Second, in terms of our products as well as the flavors of the products, they are quite mature. That's why they have seen good results in the lower tier cities. This has given us a lot of confidence in Southeast Asia countries, regardless of whether it is in their capital or in their lower tier cities, we would actually be able to enjoy opportunities. Internally in our company, we would not be discussing about ceilings of the business.
In terms of the improvement of table turn rate and 0.5x at the restaurant level from last year, 8.3% to 8.7%, it seems only an increase of 0.4%. However, for us, the inflationary pressure, we still face quite a lot, especially coming from labor cost and for raw material at the moment. Raw material globally as well as commodities, inflationary pressure is coming down. In terms of labor, we are running our business in 13 countries. Seven out of these 13 countries, they have asked to increase the minimum wage of the local market.
This is the inflation of labor cost. In countries without such requirements and in terms of the labor market, we can see that there is a lot of competition and we would increase their wages on our own initiatives.
In addition, for our four-color system and the evaluation is stricter and more frequently, and want to pursuing the table turnover rate. We don't want to make any mistakes, such as that perhaps some of our customers may not feel that they have been served well, and therefore we need to increase the staff to ensure guest satisfaction.
Therefore, you can see that labor cost has gone up 0.8%, but this is worth our investment. With this, can we obtain the guest satisfaction in return. In terms of the future efficiency, the best is to increase our table turnover rate. Only with this we would be able to dilute our cost and expenses.
Looking at our 30 years of business and hard work, for the business operating margin at a 10%-15% region, this is a reasonable scale and a reasonable region of profit margin. If it is lower than this, it would mean that there is actually no sufficient business. 10%-15%, this is a reasonable range that we have based on our experience. This is the answer for your specific question and your first question, broad question, about the challenges since taking up the post as the CEO for Ms. Yang. We'll pass the floor to Ms. Yang.
Thank you. Well, I think that for challenges, whether it is in China or overseas, we have challenges because the competition is everywhere. I think the core is really that we work well in our core business and for dining restaurant business, regardless of where you are in the world. The main issue we face is that countries with different cultures and law requirement. We have recently opened about our business in overseas for about a decade so far.
For the past decade, the different cultures. Well, actually for the legal perspective, as long as you are compliant, we have good lawyers and that is not to worry. For cultures, we need to respect the local cultures, and in the meantime, with our good employees, we need to have good employees and to realize the respect for these employees. In the meantime, we also need to make sure that we can grasp the good environment and good service. This would apply to any country and any business.
This is based on Haidilao. In every country we currently have our Haidilao business, and we have a very good business, and you can also see this from the table turnover rate. This shows the good adaptability of our business. If you are saying that to get everyone to go and have a hot pot, this is about people's dining habits, it is very difficult for Europeans and Americans to get used to hot pots. Rome is not built in one day.
Even if they were to have, the frequency won't be as high as Asians. That's why we have our multi-brand strategy. As long as we do well in our services, we remain sincere, friendly. As long as we're able to do this, regardless which culture we are in, people will accept you.
As long as you are sincere, friendly, and provide a good service, you will be well accepted. In terms of environment and the management of hygiene, a lot of the Chinese restaurants have a bad name in overseas business in history. Really in terms of the renovation, it's all the same. What people are concerned about is the hygiene and the health, as well as the cleanliness, et cetera. We also need to make sure that our renovation is in line with the local taste.
Thirdly is about reasonable price. With a multi-brand strategy in place for our pricing, I believe that for Haidilao as well as other brands, will enjoy more advantages. I feel that there are big challenges, but you can also look at it as a small challenges depending on how you look at it. I think that as long as we are down to earth and make sure that we do our job steadfast and well, using our 30 years of experience to replicate this in all the other countries, I don't really see there will be any problems.
Thank you for your question. We have Hildy from Morgan Stanley. Hildy Ling.
Thank you for giving me this opportunity. I have already heard quite a lot of comprehensive questions, and two small questions on my end. These are two questions. They are both about Q2, and I can see that for the unit price and from US dollars perspective, there is a slight decrease. How much of that is caused by US dollars appreciation? If from a local currencies perspective, what is the trend, especially benchmarking to Q1 for the unit price per guest? What is the trend?
My second question is about arrangements. I can see that for Southeast Asia as well as North America, the table turnover rate in Q2 is slightly down, especially in North America because the unit price has already come down. If we look at it quarter-on-quarter, it is down, and table turnover rate also down.
I would like to ask, is this something that we need to be concerned about, that because of the economic pressure, the ability to spend in North America has already weakened? Should we worry about this? In addition, I also want to ask the management team on your views of the North American market in the future.
Thank you for your question. For unit price, first half of this year, it is down by $0.9. $0.8 were caused by Forex and $0.1, yes, indeed, that is a decrease. For most of the countries, actually, the unit price has increased, and some of the countries, they have decided to adjust their price upward. For instance, we are now charging service charges in Japan, and they have decided to put up the price for certain dishes, Singapore as well.
For North America, the unit price coming down, this is a region that is relatively obvious. We have U.S. and Canada. For Canada, for certain stores, they have off-peaks and they provide some promotion activities. For instance, at CAD 1.99 you can enjoy the beef. Because of the restrictions on the time as well as the amount, it has brought quite a lot of traffic.
In the United States, we have also seen that for certain stores, there are quite a lot of activities targeting at students or the local office workers, et cetera, and these will all bring down the unit price. However, in terms of the pricing power, this is dedicated to the country manager, and they will be looking at each of the individual stores in that country to decide whether they have any promotional activities. In terms of the promotional activities degree, they will decide. For the headquarters, they only need to control the red line.
One is that in terms of the brand reputation, the second is on the promotion, it cannot be too big of a discount. We do give them a lot of freedom, and at the moment, we do see that the operation is quite healthy.
In addition, you have also asked about Q2, about North America and whether there is any weakening in the sales overseas in Q1 and Q2. Generally speaking, Q2 will be weaker than Q1 because in Q1 we will have major festivals. This year we have January New Year and Chinese New Year. In addition, this year, we also have a major impact on Singapore, which is that Taylor Swift has already had six concerts in Singapore, and Singapore's GDP and tourism has all gone up, and this has a major impact in Q1.
For Q2, in terms of festivals, there are fewer. From our perspective, this is quite normal. Of course, looking at the overall economic trends globally, people pay attention to the U.S. market, looking at our own observation, U.S., there is still a lot of consumption power.
We continue to learn about the macroeconomy. Looking at the unemployment rate or the reduction in inflation in the U.S., including personal income, we feel that overall it is quite stable. Coming to our own store management, we feel that for the U.S., it depends on different time segments and guest base, and there are opportunities for all. Despite the changes in the macro environment, because we only have 13 stores, as long as we work hard and attract more guests, we would be able to develop our business very well, and it will be developing in a very healthy way.
Okay, great. Thank you for your question. We now welcome the last question. Liu Jiwei from CITIC.
Thank you. This is Liu Jiwei from CITIC Securities, and I have one question. Ms. Yang mentioned many times about country manager. You have also talked about the country manager as the local lead and taking up the responsibility of the business. Looking at this as a whole, for the country manager's background and their resume, what is their background? The KPIs for the country managers, what are they, and how do you provide incentives for these people?
Okay, thank you. For our country managers and for their resume, we are selecting them from the best managers from the whole country. For their KPIs, we look at the Three Tables that I mentioned earlier, the success rate and whether they are successful or not. Then we will have a playoff between these managers. For those who fall behind, they will be eliminated. Those who do well, in terms of the bonus, we have a tiered bonus dividend payout system. Thank you.
Okay, great. Thank you for your question. In the interest of time, this concludes today's earnings call. Thanks to all the analysts and investors for your participation. We will see you next time. Thank you, everyone. Thank you, and see you next time. Goodbye.