The pursuit of a public listing by the well-known Chinese fast-food chain Lao Xiang Ji has once again ended in failure.
On July 8th, its application lapsed, marking the fifth unsuccessful attempt in the past five years to become a publicly traded company.
The journey began back in 2022 when the company first filed its prospectus, aiming to list on the Shanghai Stock Exchange's main board and raise 12 billion yuan. That year also saw a flurry of marketing activities, seemingly aligning with its capital market ambitions.
However, scrutiny of the prospectus revealed a significant issue: serious deficiencies in employee social security contributions. Over three years, the company failed to pay social security for 16,000 employees, a revelation that sparked widespread discussion online.
The problems did not stop there. In October 2022, regulators issued a lengthy inquiry letter raising 45 questions, covering areas from social security and food safety to procedural flaws in past capital increases and bribery allegations involving the controlling shareholder, highlighting numerous governance concerns.
Undeterred, the company responded and pressed on with its application. It filed again in February 2023. However, facing stricter A-share listing rules for restaurant chains, it withdrew its domestic application in August 2023 and pivoted to seek a listing in Hong Kong instead.
In January 2025, it submitted its application to the Hong Kong exchange. Six months later, this application lapsed due to a failure to update required materials. A second attempt later that month also failed, followed by a third unsuccessful filing in January 2026.
The company appears to have missed a favorable window for a Hong Kong listing. While rules were optimized in 2024 to expedite the process for restaurant chains, subsequent regulatory tightening and more detailed compliance inquiries have likely delayed such plans.
Industry observers suggest the repeated failures may be linked to the unresolved compliance issues initially raised by regulators.
During this prolonged wait, the company's valuation has plummeted. Valued at 18 billion yuan before its first attempt in 2022, its worth had halved to approximately 9 billion yuan by mid-2025 according to a Hurun report.
A leadership transition also occurred during this period. Founder Shu Congxuan stepped down from all positions at the end of 2023, succeeded by his son, Shu Xiaolong, as chairman.
A key strategic shift under the new leadership was the introduction of a franchising model, which is reflected in the company's financial performance.
From 2019 to 2021, the company struggled with increasing revenue but not profits. Its gross margins were low compared to industry peers, and net profits attributable to shareholders were declining, attributed to its capital-intensive, full-industry-chain model.
The franchising model helped improve profitability from 2022 to 2024, with gross margins and net profits showing recovery. However, these figures still lag behind industry averages.
Simultaneously, revenue growth has been slowing. While revenues increased from 2022 to 2024, the growth rate decelerated, further slowing to 10.9% in the first eight months of 2025. Franchising expanded the store network but failed to create a new, high-growth revenue driver.
In response, the company has turned its focus overseas. In April 2026, it opened its first international store in Kuala Lumpur, Malaysia, and in June, signed an agreement with a Singaporean restaurant group to establish a joint venture.
For the new leadership, overseas expansion represents a crucial strategy to counter domestic growth pressures and bolster its investment narrative. However, success in Southeast Asia faces challenges like cross-border supply chains, local market adaptation, and high operational costs.
After five failed IPO attempts, the path to the public market remains arduous. When it next knocks on the door of the capital markets, it will need a far more compelling story than it has today.
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