Revered as the "janitor of the culinary world," Xiaocaiyuan has earned its reputation with substantial business endeavors.
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According to public records, Xiaocaiyuan International Holdings Limited (hereinafter referred to as "Xiaocaiyuan"), the new Anhui-cuisine restaurant brand, officially submitted its prospectus to the Hong Kong Stock Exchange on January 16, 2024, with plans for a main board listing. Huatai International and UBS Group will serve as joint sponsors.
In the prospectus, Xiaocaiyuan states that the net proceeds from the IPO will primarily be used to continue expanding its store network, enhancing geographical coverage, and increasing market penetration. Other uses include strengthening supply chain capabilities, upgrading intelligent equipment and digital systems to boost digital capabilities, and serving as working capital for general corporate purposes.
Established in 2013, Xiaocaiyuan has expanded to regions such as Jiangsu, Shanghai, Zhejiang, Beijing, Hubei, Tianjin, Guangdong, Hebei, Henan, Shandong, Jiangxi, and more. Apart from "Xiaocaiyuan," it has also created brands like "Guandi (Chinese: 观邸)”、"Fuxinglou (Chinese: 复兴楼)、and "Caishou (Chinese: 菜手)".
As of January 11, 2024, Xiaocaiyuan operates 548 directly-owned stores in 119 cities across 12 provincial-level administrative regions in China, including 542 "Xiaocaiyuan" stores and 6 stores under other sub-brands. According to its plan, it aims to open approximately 160, 190, and 230 "Xiaocaiyuan" stores between 2024 and 2026. By the end of 2026, the number of "Xiaocaiyuan" stores is expected to surpass 1,100.
Public records indicate that, before the IPO, Harvest Capital was Xiaocaiyuan's sole external investor. It invested a total of CNY 500 million in March 2022 and March 2023, holding a 7.01% stake in Xiaocaiyuan prior to the IPO.
According to Frost & Sullivan, based on store revenue in the first three quarters of 2023, "Xiaocaiyuan" ranks first among all brands in the Chinese mass-market traditional dining sector with an average customer spending between CNY 50 and CNY 100.
Financially, Xiaocaiyuan reported revenues of CNY 2.646 billion and CNY 3.213 billion in 2021 and 2022, respectively, with net profits of CNY 227 million and CNY 238 million. In the first three quarters of 2023, revenue increased by 41.6% from CNY 2.422 billion in the same period in 2022 to CNY 3.429 billion, and net profit increased by 107.6% from CNY 207 million to CNY 430 million, resulting in a net profit margin of 12.5%. According to Frost & Sullivan, Xiaocaiyuan's net profit margin leads to the mass-market traditional dining sector.
On the store level, the operating profit margin was 15.9% and 14.2% in 2021 and 2022, respectively. It increased to 20.9% in the first three quarters of 2023 from 15.6% in the same period in 2022. The improvement was attributed to a decrease in the percentage of raw materials and consumables from 33.6% in the first three quarters of 2022 to 31.4% in the same period in 2023, and a decrease in the percentage of store-level leasing and property management-related expenses from 9.6% to 7.3%.
In terms of efficiency, "Xiaocaiyuan" store daily sales per square meter increased by 18.5% from CNY 68.4 in the first three quarters of 2022 to CNY 81.0 in the same period in 2023. Same-store daily sales per square meter increased by 18.3% from CNY 67.0 to CNY 79.3 during the same period. Monthly sales per employee increased by 16.9% from CNY 22,696.0 to CNY 26,527.6, and same-store monthly sales per employee increased by 18.4% from CNY 22,856.9 to CNY 27,073.2.
It is noteworthy that, with the "Xiaocaiyuan" brand firmly established in the mass-market traditional dining sector with an average customer spending between CNY 50 and CNY 100, Xiaocaiyuan plans to steadily expand into the mass-market traditional dining sector with an average customer spending between CNY 0 and CNY 50. In October 2023, Xiaocaiyuan opened its first "Caishou" brand community dining store, officially venturing into the community dining sector.
Emphasizing its long-term goal, Xiaocaiyuan aims to further establish the company as a world-class international chain of restaurants with a modern scientific management system. Its focus on mass-market traditional dining aims to achieve the slogan, "Where there are Chinese, there is Xiaocaiyuan."