Core Viewpoint - The IPO of "Yujian Xiaomian" (02408.HK), a Chinese noodle chain, faced significant market challenges, with its stock price dropping substantially on the first trading day, reflecting a disconnect between high valuations and actual market performance [1][3][19] Group 1: IPO Performance - Yujian Xiaomian's IPO was priced at HKD 7.04 per share, but it opened at HKD 5.00, a decline of 28.98%, and closed at HKD 5.08, down 27.84% on its first day [1][3][4] - The company had a strong IPO backing, with cornerstone investors subscribing to USD 22 million (approximately HKD 171 million), representing 25% of the total fundraising [3][4] Group 2: Industry Trends - The noodle restaurant industry is experiencing a cooling period, with leading brands reducing their expansion efforts and facing a decline in financing activity [5][6] - The overall market for Chinese noodle restaurants is projected to grow from RMB 1,833 billion in 2020 to RMB 2,962 billion by 2024, with a compound annual growth rate of 12.7% [10] Group 3: Company Performance - Yujian Xiaomian expanded its store count from approximately 170 at the end of 2022 to 451 by mid-2025, achieving a compound annual growth rate of nearly 50% [6][10] - Despite rapid expansion, the company faced declining performance metrics, with average customer spending dropping from RMB 36.2 to RMB 31.8, a decrease of 12.1% [6][10] Group 4: Valuation Concerns - The company's pre-IPO valuation was significantly high, with a price-to-earnings ratio around 70, which is well above the typical range of 10-25 for the restaurant industry [7][10] - The aggressive expansion strategy raised concerns about sustainability and profitability, leading to skepticism among investors [8][9] Group 5: Market Dynamics - The competitive landscape is characterized by a fragmented market with over 99% of noodle restaurants having registered capital below RMB 1 million, indicating a lack of strong brand presence [10] - Yujian Xiaomian's market share is projected to be only 0.5% by 2024, highlighting the intense competition from numerous small and independent noodle shops [10] Group 6: Strategic Insights - The company needs to focus on optimizing its single-store profitability rather than merely expanding the number of locations, which has led to a dilution of quality and customer experience [11][12] - Enhancing customer experience and service quality is crucial for improving market acceptance and brand value, as consumer satisfaction directly impacts store performance [12][14]
“中式小面第一股”上市首日暴跌，是面凉了，还是估值太“烫嘴”？