This Friday, XIAO NOODLES, hailed as the "first Chinese noodle restaurant stock," will officially list on the Hong Kong Stock Exchange. By now, it has completed six rounds of financing, attracting investments from institutions and food giants such as Hillhouse Capital, Haidilao, Jiumaojiu, and Xijiade.
However, skepticism about the brand's use of pre-made dishes persists on social media. A former employee revealed, "About 80% of the dishes are pre-made, such as minced meat sauce and mashed peppers—just pour them out of the package and serve. Even the dumplings are frozen."
XIAO NOODLES' official customer service confirmed this claim. The representative stated that franchisees do not need to prepare kitchen knives or cutting boards—"just scissors and a microwave." To avoid customer scrutiny, the company added, "We won’t use fully open kitchens; partial barriers will be installed."
**Franchisee Earnings Decline While Executive Salaries Triple in Three Years** In late November, XIAO NOODLES announced its global offering, initiating its IPO process with plans to list on the Hong Kong Stock Exchange this Friday. Before the listing, it secured its final cornerstone investment, with Hillhouse Capital and Haidilao among the participants, collectively subscribing to $22 million—about 25% of the total funds raised.
By now, XIAO NOODLES has completed six financing rounds, backed not only by renowned investment firms but also by major restaurant chains like Jiumaojiu and Xijiade.
As early as 2021, six rising noodle chains, including Hefu Noodle, Wuye Banmian, and Chen Xianggui, raised over 4 billion yuan in a year, with single-store valuations reaching tens of millions. After 2022, Chinese noodle restaurants faced widespread losses, price cuts, layoffs, and closures. XIAO NOODLES' IPO has now brought the sector back into the capital spotlight.
According to its prospectus, revenue grew from 418 million yuan in 2022 to 1.154 billion yuan in 2024, though growth slowed significantly in 2024. As of June 30, 2025, revenue reached 703 million yuan, with a profit of 42 million yuan—a mere 6% margin.
Unlike other Chinese noodle chains, XIAO NOODLES adopted a dual strategy of company-owned and franchised stores to accelerate expansion. Public data shows it had only 170 stores in 2022, expanding to 252 in 2023 and 360 in 2024. The latest prospectus figures indicate 465 stores, with 82, 108, and 105 new stores opened in the past three years, respectively.
However, rapid expansion has diluted per-store revenue and average spending. For company-owned stores, daily sales per store dropped from 14,000 yuan in 2023 to 12,400 yuan in 2024, an 11.43% decline. By mid-2025, this figure fell further to 11,000 yuan, down 10.69% year-on-year. Average spending per customer also declined for three consecutive years, from 36.2 yuan in 2022 to 32.1 yuan in 2024, and 31.8 yuan in the first half of 2025.
Franchised stores saw similar declines, with daily sales per store sliding from 14,200 yuan to 11,900 yuan. XIAO NOODLES attributed this to deliberate price reductions aimed at attracting customers and boosting sales.
Under its new plan, the company will prioritize franchising, targeting 120–200 new stores annually from 2025 to 2027. This shift may further pressure per-store revenue.
Meanwhile, as franchised stores increase, XIAO NOODLES' contract liabilities have surged from 37 million yuan in 2022 to 111 million yuan. The prospectus warns that failure to recognize these liabilities as revenue could significantly harm operations, performance, reputation, and liquidity.
Notably, while franchisees struggle, executive salaries have skyrocketed—from 1.537 million yuan in 2022 to 4.664 million yuan in 2024, a 300% increase. Founder Song Qi’s pay also rose from 782,000 yuan to 1.112 million yuan.
**Customer Complaints: "All Pre-Made, No Effort to Hide It"** Originally known for affordable, tasty Chongqing noodles and spicy noodles, XIAO NOODLES is now facing backlash. On social media, customers complain about "bland vegetables," "pre-made-tasting braised meat," "tiny portions," and "powdered orange juice." Some even say, "They don’t even pretend anymore—it’s all pre-made."
A former employee confirmed that 80% of dishes are pre-made, including sauces and frozen dumplings. Online images also show pre-packaged broccoli supplied by Zhonggao Agricultural Products Supply Chain Co., though the company did not respond to inquiries.
XIAO NOODLES’ customer service reiterated that franchisees only need scissors and microwaves, with kitchens partially obscured to hide food prep.
As franchising expands, maintaining service quality and food handling standards may become harder. The company’s future may lean more toward branding and supply chain management, with headquarters overseeing centralized procurement for "food safety, quality, and cost efficiency."
For this 30-square-meter startup, the Hong Kong listing is not the end but a challenging new beginning.
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