According to the Hong Kong Stock Exchange's disclosure on January 12, Qixintian International Holdings Co., Ltd. submitted a listing on the main board of the Hong Kong Stock Exchange, with CMB International and Cathay Pacific Junan International as co-sponsors.
According to public information, Qixintian first originated from Qizi Restaurant Co., Ltd., and was officially established on June 1, 2006 to specialize in new spicy sea crab hot pot.
Qixintian is a leading Chinese seafood restaurant operator in China. According to Frost & Sullivan's data, based on revenue and number of restaurants in 2020, Qixintian is the largest seafood restaurant in China, accounting for 1.2% of the total market share of the highly fragmented Chinese seafood restaurant market.
Seven Xintian offers a unique dining experience that revolves around the iconic “one pot, two eats” eating method, and is enhanced by its unique flavors and high-quality ingredients.
Since its establishment in 2009, Qixintian has combined fried crab, seafood, and hot pot, two very different and popular dining out options to create a harmonious, unique, and delicious experience that cannot be obtained when eaten alone. Through this special way of eating, Qixintian believes that it can also seize future growth opportunities in the hot pot restaurant market. According to Frost & Sullivan's data, based on revenue from self-operated restaurants in 2020, Qixintian is the third largest hot pot restaurant chain in China.
According to information, there are already 2 hot pot chain restaurants listed on the Hong Kong Stock Exchange, namely Xiabuxiabu and Haidilao. Among them, Xiabuxiabu was listed on the Hong Kong Stock Exchange in 2014/12, and Haidilao was listed in August 2018.
In addition to Qixintian, the Cantonese hotpot chain Laowang (full name “Laowang Hot Pot Cuisine”) also sprinted to the Hong Kong Stock Exchange. Earlier, on September 2, 2021, Lao Wang submitted a public statement at the Hong Kong Stock Exchange, which has not yet been heard. However, Laowang's main focus is “Cantonese hot pot,” which is different from Xiabu Xiabu and Haidilao.
According to Frost & Sullivan's data, China's seafood restaurant market grew from RMB 105.7 billion in 2016 to RMB 121.5 billion in 2020, with a compound annual growth rate of 3.5%. It is expected to continue its strong growth momentum from 2020 to 2025, growing from RMB 121.5 billion to RMB 246.3 billion, with a compound annual growth rate of 15.2%.
Furthermore, according to Frost & Sullivan's data, the revenue of the Chinese hot pot restaurant market grew at a compound annual growth rate of 2.6% from RMB 395.5 billion in 2016 to RMB 438 billion in 2020, and is expected to grow at a compound annual growth rate of about 14.2% and reach RMB 850.1 billion in 2025.
Since its establishment, Qixintian has rapidly seized market share, built up reputation, and expanded its restaurant network mainly in Jiangsu Province and surrounding regions. As of January 8, 2022, Qixintian operates more than 100 restaurants in various tier cities in Jiangsu Province. Qixintian is also expanding its restaurant network to other parts of China. As of January 8, 2022, Qixintian operates 256 restaurants in 48 cities in nine provinces and one municipality directly under the Central Government of China.
The company plans to open about 70 new restaurants in 2022. As of January 8, 2022, 30 of them have signed leases but not yet opened, while 7 restaurants have signed letters of intent with lessors. Additionally, Qixintian plans to open 100 and 130 new restaurants in 2023 and 2024, respectively.
In terms of financial conditions, in 2019, 2020, and the nine months ending September 30, 2021, Qixintian's profit before tax reached 117 million yuan (unit: RMB, same below), 239 million yuan and 331 million yuan respectively.
In 2019, 2020, and the nine months ending September 30, 2021, Qixintian's annual profit and total revenue reached 81.157 million yuan (net interest rate 6.3%), 172 million yuan (net interest rate 12.1%), and 259 million yuan (net interest rate 17.5%), respectively.
By the end of 2019, 2020, and the first three quarters of 2021, Qixintian had 180, 207, and 250 restaurants, respectively. During the reporting period, the average daily revenue of each restaurant was 21,200 yuan, 22,200 yuan, and 254,000 yuan, respectively, with turnover rates of 2.1, 2.1, and 2.2 (times/day), respectively.
Following the listing of the Hong Kong Stock Exchange this time, Qixintian plans to use the amount raised to expand the restaurant network; to strengthen the company's supply chain capabilities, including funding it to set up a central factory in coastal areas to store seafood at low temperatures; and for working capital and general corporate purposes.