XIAO NOODLES, hailed as "China's first listed noodle chain," made its debut on the Hong Kong Stock Exchange main board today with underwhelming performance. The stock opened at HK$5 per share, marking a steep 28.98% discount to its IPO price of HK$7.04, disrupting the recent trend of strong first-day gains for new listings. This weak performance aligned with its subdued gray market trading the previous night, where it closed at HK$6 on Phillip's gray market platform, representing a 14.8% decline from the offer price.
The company's Hong Kong public offering had attracted massive oversubscription of 425.97 times. Due to strong demand, the final offer price was set at the top end of the range at HK$7.04 per share, with the global offering raising approximately HK$617 million net.
Specializing in Sichuan-Chongqing style noodles, XIAO NOODLES has gained recognition for its signature Red Bowl Pea Noodles. According to Frost & Sullivan data, it ranks as China's largest Sichuan-Chongqing style noodle chain and the fourth-largest Chinese noodle restaurant operator by 2024 gross merchandise value.
Financially, the company demonstrates robust growth, having turned profitable with H1 2025 revenue reaching 703 million yuan and adjusted net profit surging 131.56% year-on-year to 52.175 million yuan. Its rapid store network expansion has reached over 450 outlets across mainland China and Hong Kong as of the latest practicable date, with plans to exceed 500 locations within the year.
Market analysts suggest the first-day decline may reflect investor concerns about restaurant sector valuations and the company's growth quality. While standardized operations and digital management have enabled rapid expansion, aggressive store openings could dilute per-store efficiency. Additionally, recent market discussions about its prepared meal ratio might have temporarily impacted some investors' confidence.
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