Core Viewpoint - Laoxiangji is making its fourth attempt to go public on the Hong Kong Stock Exchange, aiming to become the "first stock in Chinese fast food" after three previous unsuccessful attempts in A-shares and a failed IPO in 2025 [5][6]. Financial Performance - Laoxiangji's revenue has grown from 45 billion RMB to nearly 63 billion RMB over the past three years, with the number of stores exceeding 1,500, averaging 118 new stores annually [5][12]. - The company holds a 0.9% market share, ranking first in the Chinese fast food market for 2024 [5]. - The average turnover rate for Laoxiangji reached 4.4 times, significantly higher than the industry average of below 3 times [11][12]. - As of April 2025, Laoxiangji reported revenues of 21.2 billion RMB and a net profit of 1.74 billion RMB for the first four months of the year, continuing its high growth trend [12][23]. Market Position and Expansion Challenges - Despite its popularity in regions like Jiangsu, Zhejiang, and Shanghai, Laoxiangji faces challenges in expanding beyond its home base in Anhui, where 86% of its stores are located [14][15]. - The company has opened up to franchising since 2020, but franchise stores contribute less than 25% of total revenue, with a declining gross margin from 28.9% in 2022 to 20.1% in 2024 [15][23]. - The reliance on a complete supply chain and high operational costs has limited Laoxiangji's ability to expand rapidly across the country [15][23]. Consumer Perception and Pricing - Laoxiangji is perceived as a "canteen" for many workers, but its pricing is considered high compared to other fast food options, leading to consumer reluctance to order multiple dishes [18][19]. - The average customer spending has decreased slightly, but the perception of being expensive remains, with 43.7% of consumers preferring to keep their fast food spending under 20 RMB [19][20]. Strategic Moves and Future Outlook - The urgency behind Laoxiangji's repeated IPO attempts is driven by cash flow constraints due to rapid expansion and high supply chain investments [21][23]. - The company is focusing on improving operational efficiency and expanding its franchise model while maintaining quality control to enhance profitability [24]. - The current market environment in Hong Kong presents a favorable opportunity for Laoxiangji to successfully list, as investor sentiment towards restaurant businesses has improved [24].

Core Viewpoint - The company, Lao Xiang Ji, is making its fourth attempt to go public on the Hong Kong Stock Exchange, aiming to become the "first stock of Chinese fast food" after three previous unsuccessful attempts in the A-share market and an initial attempt in Hong Kong in 2025 [2][4]. Financial Performance - Over the past three years, Lao Xiang Ji's revenue has increased from 4.528 billion RMB to nearly 6.288 billion RMB, with a store count surpassing 1,500 and an average annual increase of 118 stores [2][15]. - The company holds a 0.9% market share, ranking first in the Chinese fast food market for 2024 [2]. Market Position and Customer Engagement - Lao Xiang Ji has a high customer engagement level, with an average seat turnover rate of 4.4 times in 2024, significantly above the industry average of below 3 times [14]. - As of April 2025, the company has 27.57 million registered members, with 12.2 million active members and nearly 540,000 paying members, leading the industry in both registered and paying member counts [14]. Expansion Strategy and Challenges - Despite its rapid expansion, Lao Xiang Ji faces challenges in geographic reach, with 86% of its stores located in the East China region, particularly in Anhui province [22]. - The company has opened up to franchising since 2020, but franchise stores contribute less than 25% of total revenue, with a declining gross margin from 28.9% in 2022 to 20.1% in 2024 [23][32]. Operational Efficiency and Cost Structure - Lao Xiang Ji's business model is characterized by high operational costs due to its use of 180-day old native chickens and a heavy reliance on self-operated supply chains, which limits its flexibility for rapid national expansion [30][32]. - The company's gross profit margin has consistently remained around 20%, which is lower than other Chinese fast food brands, attributed to its low-price positioning and high operational costs [32]. IPO Motivation and Market Conditions - The urgency for an IPO stems from cash flow constraints due to rapid expansion and supply chain investments, necessitating access to capital markets [30]. - The current favorable conditions in the Hong Kong market for restaurant companies present a timely opportunity for Lao Xiang Ji to secure funding and expand its operations [36].