Company Overview - Laoxiangji has submitted an application for listing on the Hong Kong Stock Exchange, with CICC and Haitong International as joint sponsors [1] - As of August 31, 2025, Laoxiangji operates 1,658 stores across 61 cities in China, comprising 925 direct-operated stores and 733 franchised stores, establishing a "direct + franchise" store network [1] - The company is recognized as one of the first Chinese fast-food companies to implement standardization across the entire value chain and to adopt digital intelligence [1] - Laoxiangji is the only major Chinese fast-food company with a fully integrated supply chain and a comprehensive traceability system [1] Industry Insights - In 2024, Laoxiangji holds a 0.9% market share, ranking first in the Chinese fast-food industry and eighth in the overall fast-food sector [1] - The Chinese fast-food market is dominated by Chinese-style fast food, with a market size of 809.7 billion RMB in 2024, projected to grow to 1,205.8 billion RMB by 2029, reflecting a compound annual growth rate (CAGR) of 8.3% from 2024 to 2029 [1] - Among the top five Chinese fast-food companies, Laoxiangji ranks first in terms of average daily sales per store (15,100 RMB) and average table turnover rate (4.4) in 2024 [1]

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].