On January 8, 2026, LXJ International Holdings Limited, the holding company of Anhui Lao Xiang Ji Catering Co., Ltd. (hereinafter referred to as Lao Xiang Ji), once again submitted a listing application to the Hong Kong Stock Exchange, marking its third attempt to go public, with Guotai Haitong acting as the sponsor. Lao Xiang Ji's journey towards capital market listing dates back to May 19, 2022, when the company first filed an application with the Shanghai Stock Exchange. After submitting a second application on February 28, 2023, the company voluntarily withdrew its listing application in August of the same year. Lao Xiang Ji explained that this decision was due to a misalignment between the expected timeline of the SSE's review process and the company's strategic development pace and financing plans. Subsequently, the company shifted its listing focus to the Hong Kong market, submitting applications to the Hong Kong Stock Exchange on January 3, 2025, and July 7, 2025. Unfortunately, both applications lapsed after failing to complete the required procedures within the specified timeframe. For comparison, GREEN TEA GROUP (06831.HK) and XIAO NOODLES (02408.HK), two other restaurant chains listed in Hong Kong, demonstrate different timelines: GREEN TEA GROUP applied in June 2024 and listed in May 2025, while XIAO NOODLES submitted its prospectus in April 2025 and listed in December 2025. As China's largest Chinese fast-food brand, Lao Xiang Ji's third listing attempt is drawing significant market attention.
Lao Xiang Ji was founded in 2003. The brand has built its menu around "chicken soup and chicken dishes," positioning itself as a "family kitchen" that provides consumers with safe, convenient, and delicious high-quality homemade Chinese meals. Primarily selling Chinese fast food in its restaurants, Lao Xiang Ji's dishes are generally priced between 12 and 17 yuan. The company manages the entire process, from supply chain and store operations to menu development and customer interaction, operating under a dual-driven business model of "company-owned + franchised" stores. Zhu Danpeng, a Chinese food industry analyst, noted that Lao Xiang Ji's recent development has lacked significant highlights, and its business model does not possess a sufficiently distinct competitive advantage. While its core product offerings have some recognition, they have not yet formed a standout competitive edge in the market. Notably, Lao Xiang Ji's layout in the prepared meal sector is a bright spot. The brand has established a complete product matrix ranging from initial preparation to semi-prepared and fully prepared meals. Through clear tiered presentation, it adequately safeguards consumers' right to know and choose, reflecting the brand's dedication and advantage in product transparency. From 2022 to 2024 and the first eight months of 2025 (the reporting period), Lao Xiang Ji maintained positive operational performance growth, albeit at a progressively slowing pace. In terms of revenue, from 2022 to 2024, the company's operating income was 4.528 billion yuan, 5.651 billion yuan, and 6.288 billion yuan, respectively, with year-on-year growth rates of 58.38%, 24.8%, and 11.27%. Net profit was 252 million yuan, 375 million yuan, and 409 million yuan, respectively, with year-on-year growth rates of 86.67%, 48.81%, and 9.07%. For the first eight months of 2025, the company's revenue increased further to 4.578 billion yuan, up 10.9% from 4.128 billion yuan in the same period of 2024. Net profit was 371 million yuan, an 11.75% increase from 332 million yuan in the same period of 2024, indicating steady growth momentum. Regarding profitability, during the reporting period, the company's gross profit margin showed minor fluctuations and consistently remained below 25%. The gross profit margins for the periods were 20.3%, 23.3%, 22.8%, and 24.6%, respectively. The gross profit margin for the first eight months of 2025 increased by 0.7 percentage points compared to the 23.9% recorded in the same period of 2024, suggesting a slight recovery in profitability. Breaking down by business segment, the gross profit margins for company-owned store operations were 19.8%, 23.5%, 23.5%, and 25.2%, respectively. Franchised store gross profit margins were 28.9%, 23.9%, 20.1%, and 24.2%, respectively. Gross profit margins for other businesses were 39.5%, 5%, 8.8%, and 8.9%, respectively, showing divergence across business lines. In terms of revenue structure, company-owned store operations are the core revenue source. Lao Xiang Ji's operating income derives from company-owned store operations, goods sales, and franchise management services. Revenue from company-owned store operations was 4.311 billion yuan, 5.323 billion yuan, 5.416 billion yuan, and 3.524 billion yuan, respectively, accounting for 95.2%, 94.2%, 86.1%, and 77% of total operating income.
On the cost and asset side, during the reporting period, the company's cost of sales was 3.609 billion yuan, 4.331 billion yuan, 4.856 billion yuan, and 3.451 billion yuan, respectively, accounting for 79.7%, 76.7%, 77.2%, and 75.4% of the revenue for the same periods. The cost of raw materials and consumables was 1.677 billion yuan, 2.131 billion yuan, 2.596 billion yuan, and 1.988 billion yuan, respectively, each exceeding 30% of operating income. Furthermore, Lao Xiang Ji's inventory levels during the period were 164 million yuan, 143 million yuan, 193 million yuan, and 171 million yuan, respectively, with raw material inventories being 75.22 million yuan, 68.922 million yuan, 86.991 million yuan, and 78.587 million yuan, respectively. The company stated that maintaining relatively high inventory levels is primarily to support the continuous expansion of its store network. Additionally, the company faces rising credit risk, with a sharp increase in trade receivables posing higher demands on capital collection efficiency. During the reporting period, trade receivables were 40.248 million yuan, 24.524 million yuan, 33.487 million yuan, and 58.235 million yuan, respectively, with turnover days of 2.6 days, 2.1 days, 1.7 days, and 2.4 days, respectively. Prepayments and other receivables continued to grow, reaching 138 million yuan, 206 million yuan, 236 million yuan, and 247 million yuan, respectively. Pressure on the liability side is quite evident. Lao Xiang Ji's total current liabilities during the period were 1.327 billion yuan, 1.512 billion yuan, 1.803 billion yuan, and 1.535 billion yuan, respectively. The current ratios were 0.5, 0.7, 0.6, and 0.8, respectively, consistently below the safe level of 1, indicating weak short-term debt repayment capability. As of August 31, 2025, the company had a net current liability of 306 million yuan, which could impact operational flexibility and business expansion capacity. Contract liabilities classified as current continued to grow, reaching 154 million yuan, 190 million yuan, 304 million yuan, and 338 million yuan, respectively, reflecting a steady increase in the scale of market advance payments.
In terms of store network, Lao Xiang Ji exhibits a pronounced characteristic of regional concentration, with high reliance on the East China market, particularly Anhui province. As of August 31, 2025, the company operated 1,658 stores across 61 cities in China, comprising 925 company-owned stores and 733 franchised stores. Among these, Lao Xiang Ji had 1,434 stores in East China, accounting for 86.5% of the total; Anhui province alone hosted 784 stores, representing 47.3%. During the reporting period, the number of company-owned stores in Anhui province was 606, 617, 469, and 452, respectively, accounting for 53.9%, 51.5%, 31.7%, and 27.3% of the total store count. The number of franchised stores in Anhui province was 62, 77, 256, and 332, respectively, accounting for 5.5%, 6.4%, 17.3%, and 20% of the total store count. In terms of revenue contribution, during the reporting period, revenue from company-owned stores in Anhui province was 2.81 billion yuan, 3.258 billion yuan, 3.182 billion yuan, and 1.769 billion yuan, respectively, accounting for 62.1%, 57.7%, 50.6%, and 38.6% of the total revenue for the corresponding periods.
Although the company has been steadily expanding outside Anhui province, its high degree of regional concentration makes it susceptible to factors such as changes in the local economic environment and consumer preferences. Regarding same-store sales, from 2022 to 2024 and the first eight months of 2025, the total number of Lao Xiang Ji's same-stores was 840, 814, and 920, respectively. The number of same-stores for company-owned stores was 761, 701, and 712, respectively, while for franchised stores it was 79, 113, and 208, respectively. Same-store sales continued to grow, with franchised stores performing particularly well. From 2022 to 2023, the average same-store sales per store increased by 16.1% year-on-year, from 4.6913 million yuan to 5.4442 million yuan. Company-owned store sales grew 15.9% year-on-year to 5.5336 million yuan, while franchised store sales saw a significant increase of 17.9%, rising from 3.8868 million yuan to 4.5828 million yuan. From 2023 to 2024, average same-store sales per store continued to grow by 2.6% year-on-year to 5.7513 million yuan. Company-owned store sales grew 2.3% year-on-year to 5.918 million yuan, while franchised store sales grew 5.1% year-on-year to 4.7169 million yuan, a growth rate significantly higher than that of company-owned stores. Comparing the first eight months of 2024 to the same period in 2025, average same-store sales per store grew 3.8% year-on-year to 3.9359 million yuan. Company-owned store sales grew 3.5% year-on-year to 4.137 million yuan, while franchised store sales grew 5.2% year-on-year to 3.2476 million yuan, maintaining a faster growth pace and becoming a key driver of same-store sales growth. In terms of per-store operational data, from 2022 to 2024, the per-capita spending in company-owned stores decreased from 29.7 yuan to 27.5 yuan, while the table turnover rate increased from 3.8 times/day to 4.8 times/day. Restaurant sales for company-owned stores increased from 4.519 billion yuan to 5.657 billion yuan. For franchised stores, per-capita spending decreased from 31.5 yuan to 28.4 yuan, while the table turnover rate increased from 2.9 times/day to 3.6 times/day. Restaurant sales for franchised stores increased from 4.905 billion yuan to 7.202 billion yuan. In the first eight months of 2025, per-capita spending in company-owned stores was 27.5 yuan, a decrease of 0.2 yuan from the same period last year. The table turnover rate slightly decreased from 4.8 times/day to 4.7 times/day, and restaurant sales decreased from 3.818 billion yuan in the same period of 2024 to 3.684 billion yuan. For franchised stores, per-capita spending was 28.4 yuan, a decrease of 0.9 yuan, while the table turnover rate remained unchanged at 3.2 times/day. Restaurant sales increased from 4.641 billion yuan in the same period last year to 5.749 billion yuan. During the reporting period, the overall average daily same-store sales increased from 13,200 yuan to 16,400 yuan. The average daily same-store sales for company-owned stores consistently increased from 13,400 yuan to 17,200 yuan, remaining substantially higher than those of franchised stores, which increased from 11,000 yuan to 13,600 yuan. The same-store sales growth rates were 16%, 2.6%, and 3.8%, respectively. The same-store sales growth rates for company-owned stores were 15.9%, 2.3%, and 3.5%, respectively, while for franchised stores they were 17.9%, 5.1%, and 5.2%, respectively. Concurrently, the efficiency of daily sales per unit area for same-stores continued to optimize, with franchised stores steadily catching up. The daily sales per unit area for company-owned stores increased from 70.3 yuan to 86.1 yuan, while for franchised stores it increased from 66.1 yuan to 80.7 yuan. The gap between the two narrowed from 4.2 yuan to 5.4 yuan, indicating a gradual improvement in space utilization efficiency for franchised stores. The overall daily sales per unit area increased from 64.9 yuan to 85.0 yuan, showing consecutive years of growth.
In this IPO, Lao Xiang Ji outlined the intended use of proceeds from the Hong Kong listing in its prospectus, which is expected to be allocated towards optimizing the integrated supply chain; expanding the store network to broaden geographical coverage and deepen market penetration; enhancing IT capabilities and upgrading smart equipment and digital systems; strengthening brand promotion and marketing activities; and for working capital and general corporate purposes. Lao Xiang Ji's path to listing is fraught with multiple risk challenges, among which food safety and compliance issues are particularly prominent. The prospectus disclosed that between 2022 and 2024, a total of 13 company-owned stores experienced food safety incidents involving the use of expired ingredients, substandard utensil hygiene, and foreign objects found in dishes, affecting approximately 676 customers. This led to 13 administrative penalties, including administrative warnings, confiscation of illegal gains, and two fines, totaling approximately 86,000 yuan in fines and 3,000 yuan in confiscated gains. In response to the identified food safety incidents, Lao Xiang Ji stated it would further strengthen internal control measures for both company-owned and franchised stores to mitigate risks. On the Black Cat Complaint platform, complaints related to Lao Xiang Ji have so far reached several hundred, covering issues such as food poisoning, foreign objects in dishes, and false advertising, reflecting consumer concerns about product quality.
Compliance risks are also evident in areas such as property, fire safety, and employee benefits. As of the latest practicable date, some of the company's restaurants had not completed fire acceptance filings, 928 leased properties had not undergone registration filing, and 228 lessors had not provided property ownership certificates or relevant authorization documents, all of which could face risks of fines or lease termination. Regarding employee benefits, from 2019 to 2021 and the first half of 2022, Lao Xiang Ji's total number of employees was 12,844, 15,400, 14,503, and 13,714, respectively. The number of employees not enrolled in social security was 8,035, 6,135, 1,874, and 1,313, respectively, with non-enrollment ratios of 62.55%, 39.84%, 12.92%, and 9.57%. The prospectus shows that during the reporting period, the shortfall in Lao Xiang Ji's social security and housing fund contributions was 10.7 million yuan, 21.4 million yuan, 36.3 million yuan, and 31.9 million yuan, respectively, totaling over 100 million yuan. The potential maximum fines for social security contribution discrepancies during the same periods were approximately 16.1 million yuan, 42.7 million yuan, 81.9 million yuan, and 74.7 million yuan, respectively, cumulatively around 215 million yuan. The proportion of employees not enrolled in social security was historically high, which could lead to labor disputes and regulatory penalty risks. Lao Xiang Ji acknowledged that the main reasons for the incomplete payment of social security and housing fund contributions for relevant employees are as follows: firstly, following industry practice, employee turnover is very high, making it impossible to make timely contributions for those who leave shortly after joining; secondly, many employees are unwilling to bear the costs associated with social security and housing funds; thirdly, some migrant workers choose to participate in the local rural social security system in their place of residence or hometown, and are therefore unwilling to join the social welfare plan of their temporary city, as contributions cannot be transferred between cities. In terms of ownership structure, Lao Xiang Ji exhibits a highly concentrated characteristic. Shu Congxuan's son, Shu Xiaolong, holds 70.78% of the company's shares through Constantly Soar Ltd. His sister, Shu Wen, holds a 15.02% stake through Jump Spark Ltd. Shu Xiaolong's spouse, Dong Xue, holds a 6.22% stake through Favourable Impression Ltd. These three individuals collectively hold 92.02% of the shares, ensuring solid control. Additionally, the equity incentive plan platform, Kandel Holding Ltd, holds a 3.00% stake through Poweroy Holding Ltd.
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