With a strong shareholder background and supply chain management, Hongjiu Fruit aims high.
Chinese fruit vendor Hongjiu Fruit (Chinese: 洪九果品) achieved the Hong Kong Stock Exchange H-share listing on September 5, three months later since it passed the hearing for the IPO. CICC served as the exclusive sponsor.
The listing was priced at HKD 40 to HKD 52, and a total of 2,086 valid applications were received for a total of approximately 846,000 shares under the public offering. GF Global Capital and Southern Asset Management also joined as the cornerstone investors.
This round of financing raised the net amount of around HKD 497 million after deducting issuance fees and other expenses, making Hongjiu Fruit the first Chinese mainland fruit company to be listed on the Main Board of the Hong Kong Stock Exchange.
Founded in 2002, Hongjiu Fruit is a fast-growing multi-brand fresh fruit group in China, focusing on the full industry chain operation of premium fruits that originated from China, Thailand and Vietnam. The company has developed a fruit portfolio of 49 categories with durian, mango, longan, dragon fruit, carrion and grapes as its core.
So far, Hongjiu Fruit has received about CNY 2.098 billion in several rounds of investment from investors including Alibaba, Skycus Capital, CMC Capital, Sunshine Insurance Group, Shenzhen Capital Group, China Merchants Capital, Sino-Reclamation Fund, SF Holdings, CITIC Capital and others.
In terms of retail value, the market size of the fresh fruit market in China has increased from CNY 939 billion in 2017 to CNY 1,336 billion in 2021, per China Insights Consultancy or CIC. Among many types of fruits, Hongjiu Fruit has selected only six of the fastest growing fruit categories as its core fruit products, and they account for 64.6% of the total imported fruit market in China for the year 2021.
According to the prospectus, the firm’s revenue jumped significantly from CNY 2 billion in 2019 to CNY 10 billion in 2021. At the same time, its profits also recorded a surge from CNY 163 million to CNY 292 million.
The fresh fruit distribution market in China is competitive, while the CR5 metric being less than 5%. Domestic rivals include Pagoda (Chinese: 百果园) and Xianfengsg (Chinese: 鲜丰水果).