On July 16, 2024, Xiaocaiyuan International Holding Ltd. ("Xiaocaiyuan"), from Anhui Tongling, submitted a prospectus to the Hong Kong Stock Exchange, planning to be listed on the Hong Kong IPO. This is its second application, following its failed submission on January 16, 2024.
Xiao Cai Yuan prospectus link:
Main Business
Established in 2013, Xiao Cai Yuan is one of the well-known Chinese-style catering chain restaurants for the general public. It ranks among the top in the industry in terms of business scale and growth rate. As of July 8, 2024, Xiao Cai Yuan has established a nationwide store network consisting of 623 operating directly managed stores, covering Anhui, Jiangsu, Shanghai, Zhejiang, Beijing, Hubei, Tianjin, Guangdong, Hebei, Henan, Shandong, Jiangxi and other regions of China. Xiao Cai Yuan's brand portfolio includes Xiao Cai Yuan, Guan Di, Fu Xing Lou and Cai Shou, etc.
According to Frost Sullivan's data, Xiao Cai Yuan ranks first among all brands in the Chinese popular Chinese-style catering market with an average price range of CNY 50 to CNY 100 based on store revenue as of 2023.
All dishes at Xiao Cai Yuan are cooked on site, providing consumers with healthy and fresh dishes. The company promises 'free gifts for dishes that exceed the promised serving time (promised to be served within 25 minutes)', 'unconditional refund or exchange for unsatisfactory dishes', and 'ensure high-quality ingredients, ten times compensation for any problems'. Xiao Cai Yuan gradually promoted the use of cooking robots and achieved programmatic unified settings and management through its SaaS platform at the headquarters.
As of July 8, 2024, Xiao Cai Yuan has established a comprehensive supply chain system, consisting of a central kitchen and 12 warehouses, and has a self-built transportation fleet of more than 200 vehicles to ensure the effective delivery of goods to each store.
Xiao Cai Yuan's revenue mainly comes from dining and takeout businesses, as well as a small amount of sales of ingredients and commission income from a power bank solution provider, and new retail business.
In the first four months of 2024, the total number of dining customers in Xiao Cai Yuan stores was approximately 17.5107 million, and the average consumption per dining customer was CNY 61. The number of takeout orders was approximately 8.0848 million, and the average consumption per takeout order was CNY 73.3.
Shareholder Structure
According to the prospectus, in the shareholder structure of Xiao Cai Yuan before listing, Mr. Wang Shugao can control a total of 92.99% of the voting rights of the company, including:
Mr. Wang Shugao holds 11.32% of the shares through XCY Future Limited, which is wholly owned by him;
XCY Yongqing Limited controlled by Mr. Wang holds 39.96% of the shares.
XCY Yongqing Limited: Mr. Wang, Mr. Li Daoqing, Mr. Tian Chunyong, Mr. Zhou Bin, Mr. Tao Xu'an, Mr. Ye Hongli, Mr. Fang Zhiguo, Mrs. Wang Weifang, and Mr. Chen Haiyan respectively hold 29.26%, 9.84%, 9.84%, 9.84%, 9.84%, 8.51%, 8.51%, 7.18%, and 7.18%, as consistent actors, following Mr. Wang's voting decision. Mr. Wang is the only director.
Mr. Wang, 129 employees of the group, Mr. Wang Fuxiang, and Ms. Wang Yuan registered a holding platform, including:
XCY Xuyuan Limited[1] holds 25.61% of the shares;
XCY Huiming Limited[2] holds 5.21% of the shares;
XCY Weiyuan Limited[3] holds 2.50% of the shares;
XCY Zhiyuan Limited[4] holds 6.48% of the shares;
XCY Liyuan Limited[5] holds 1.91% of the shares.
[1] XCY Xuyuan Limited: held by 36 individuals including Mr. Wang (5.39%), with Mr. Wang as the only director. Other shareholders include Zhou Nan (5.39%), Fang Li (5.39%), and Zhan Yong, Qian Yihua, Yao Youbing, Zhu Zhenghui, She Mingzhu, Wu Roujin, Liu Xiaoxuan, Jiang Guozhen, Luo Yan, Wang Qian, Zhang Weiyuan, Wu Shengtian, Luo Hanghang, Wu Liaoyong, Hou Weimin, Sun Nianli, Xu Pengfei, Li Zhi, Cao Jibing, Zhang Chao, Wan Xinren, Zhang Ping, Qi Qiaozhen, Zhang Zheng, Wang Ping, Jiang Meixia, Xiao Shangyong, Wang Fuxiang, Wang Qin, Hu Jian and Chen Xingxia, Li Shan, each holding less than 5% of the shares;
[2] XCY Huiming Limited: held by 21 individuals including Mr. Wang, with Mr. Wang as the only director. Other shareholders include Wei Chaoqun, Zhou Zhenhuai, Zhou Xiaolei, Chen Lei, Wang Yan, Tang Guihua, and Bao Wenjun, each holding 6.12% of the shares, and Liu Xuyong and Qian Yanfei, each holding 5.10% of the shares, with Guo Kejian, Li Shijie, Lu Qingsi, Sang Hui, Zhang Xiaolong, Xu Jiajia, Hu Shaocai, Qian Guangmin, Ma Liang, Wang Linfeng, Wang Fan each holding less than 5% of the shares;
[3] XCY Weiyuan Limited: held by 11 individuals including Mr. Wang (21.27%), with Mr. Wang as the only director. Other shareholders include Xu Fei, Wang Xuhui, Jiang Meiling, Jiang Bao, Fang Xuefei, Tang Lijin, Wu Jiang, each holding 6.38% of the shares, and Wang Cui, Su Yong, Zhang Bei, each holding less than 5% of the shares;
[4] XCY Zhiyuan Limited: held by 32 individuals including Mr. Wang (32.78%) with Mr. Wang being the only director. Other shareholders hold no more than 5% of the shares, including Jiang Chengjin, Chen Wanling, Niu Xianjie, Tang Zhiqiang, Jiang Dagan, Xu Yunhua, Wang Weixiang, Qian Peipei, Chen Yong, Zhang Jiajiu, Tong Fei, Wang Heng, Tao Jianfu, Gao Jun, Wei Xue, Cao Yeping, Wan Lili, Wang Xiaoyu, Zhang Anjun, Xu Xiangmei, Wang Xianfu, Bi Fangting, Song Qijian, Xing Dalin, Cheng Feng, Wei Lili, Xu Lei, Ding Mengqin, Liu Yiqin, Zhang Guolin, and Cha Daoqiang.
[5] XCY Liyuan Limited: held by 12 individuals including Mr. Wang (16.65%) with Mr. Wang being the only director. Other shareholders include Zhu Xinlin, Cai Weijin, Wang Ting, and Gao Ji, each holding 11.11%, Pan Wenling, Song Fengping, ****, Zhang Man, Zuo Dongmei, Huang Ming, and Hu Xuehui each holding 5.56%.
Harvest Delicacy, ultimately controlled by Mr. Song Xiangqian, holds 7.01% of the shares.
Management Team
The Little Garden board of directors consists of 11 directors, including:
6 executive directors: Mr. Wang Shugao (Chairman and General Manager), Mr. Li Daoqing (Deputy General Manager), Mr. Tian Chunyong (Deputy General Manager), Mr. Zhou Bin (Regional General Manager), Ms. Wang Weifang (Regional General Manager, Mr. Wang Shugao's niece), and Mr. Tao Xuan;
1 non-executive director: Mr. Luo Yongxiang;
4 independent non-executive directors: Mr. Qian Mingxing, Mr. Zhu Nanjun, Mr. Zeng Xiaosong, and Ms. Fang Xuan.
In addition to the executive directors, senior management includes Chief Financial Officer Ms. Zhu Zhenghui and Board Secretary and Director of the General Manager's Office Ms. She Mingzhu.
Corporate Performance
According to the prospectus, in the past four years, from 2021 to 2024, Little Garden's revenue was RMB 2.646 billion, 3.213 billion, 4.549 billion, and 1.68 billion respectively, and the corresponding net profits were RMB 0.227 billion, 0.238 billion, 0.532 billion, and 0.194 billion.
Intermediary Team
The underwriting team for Little Garden's IPO includes Huatai International and UBS Group as joint sponsors; KPMG as auditor; Tian Yuan and Skadden as Chinese lawyers and Hong Kong and US lawyers, respectively; Jingtian & Gongcheng and Fried, Frank, Harris, Shriver & Jacobson as brokerage Chinese lawyers and Hong Kong lawyers, respectively; and Frost & Sullivan as industry consultant.
