Core Viewpoint - The debut of "Yujian Xiaomian," known as the first Chinese noodle restaurant stock, on the Hong Kong Stock Exchange was marked by a significant drop in share price, reflecting market skepticism about the company's fundamentals and industry prospects [1][7]. Financial Performance - On its first trading day, Yujian Xiaomian opened at 5 HKD per share, down 28.98% from the issue price of 7.04 HKD, closing at 5.08 HKD, a total decline of 27.84%, resulting in a market capitalization of 3.61 billion HKD [1][7]. - The company reported a decrease in average daily sales per store for both direct-operated and franchised restaurants, with declines of 888 HKD and 1,035 HKD respectively in the first half of 2025 [1][8]. - The turnover rate for direct-operated and franchised restaurants fell from 3.8 and 3.6 in the first half of 2024 to 3.4 and 3.1 in the first half of 2025 [1][8]. Pricing Strategy - The company's strategy of "exchanging price for volume" has failed, as the average order value has consistently declined from 36.1 HKD in 2022 to 32.0 HKD in 2024, and further to 31.8 HKD (direct-operated) and 30.9 HKD (franchised) in the first half of 2025 [2][8]. - The market questions the sustainability of the company's approach to lowering menu prices to attract customers [2][8]. Industry Context - The Chinese noodle restaurant sector is experiencing a capital retreat, with many previously successful brands now facing growth challenges. In the past year, 241,600 new noodle restaurants opened, but the net increase was only 12,100, indicating a high industry elimination rate [2][8]. Business Model - Yujian Xiaomian's business model heavily relies on franchising, with 74.3% of its 374 stores being franchised, contrasting sharply with competitors like Xiangcunji, which operates over 99% of its stores as direct-operated [3][9]. - While franchising allows for rapid expansion, it also presents risks, including quality control issues, as evidenced by three franchised stores being penalized for quality problems in 2024 [4][10]. Expansion Plans - The company plans to aggressively expand, aiming to open approximately 150 to 180 new restaurants in 2026, 170 to 200 in 2027, and 200 to 230 in 2028, which could effectively double its current store count [5][10]. - However, the ongoing decline in same-store sales poses a significant challenge to this expansion strategy, with direct-operated and franchised same-store sales dropping by 3.1% and 2.9% respectively in the first half of 2025 [5][10]. Conclusion - The case of Yujian Xiaomian illustrates the difficulty of balancing traditional brand values with the demands of capital efficiency, providing valuable insights for the broader Chinese fast-food industry's path to capitalization [11].
“中式面馆第一股”上市遇冷：遇见小面首日破发近30% 高速扩张难掩模式隐忧