The Chinese Dining chain Xiaocaiyuan (00999.HK) will start its initial public offering (IPO) from today (December 12) until next Tuesday (December 17), with an anticipated listing date on the Hong Kong Stock Exchange on December 20, 2024, sponsored by Huatai International and UBS Group.
Xiaocaiyuan plans a Global offering of 0.1011808 billion shares (accounting for 8.60% of the total shares after issuance), with 90% for international offering and 10% for public offering, plus an additional 15% over-allotment option, with a per-share offering price of 8.50 Hong Kong dollars, and a minimum subscription of 800 shares, aiming to raise approximately 0.86 billion Hong Kong dollars.
At an offering price of 8.50 Hong Kong dollars per share, assuming full exercise of the over-allotment option, Xiaocaiyuan estimates total listing expenses at around 81.2 million Hong Kong dollars, which includes a 2.75% underwriting commission, a 1.25% discretionary fee, listing fees for the stock exchange, transaction fees from the Securities Regulatory Commission, trading fees from the stock exchange, transaction fees from the finance bureau, legal and other professional fees, printing, and other expenses.
In this IPO, Xiaocaiyuan expects to raise net proceeds of approximately 0.748 billion Hong Kong dollars: about 40.0% will be used to continue expanding the store network to increase geographical coverage and improve market penetration; around 37.0% will enhance supply chain capabilities; approximately 13.0% will upgrade smart devices and digital systems to enhance information technology capabilities; and about 10.0% will be allocated for working capital and general corporate purposes.
For this IPO, Huatai International and UBS Group are the joint sponsors, overall coordinators, and joint global coordinators; Guoyuan International serves as the overall coordinator and joint global coordinator, with other underwriters including CMB International, ABC International, ICBC International, Futu Securities, and TradeGo Markets; KPMG is its auditor; Tianyuan and Gaowei Law Firm are its Chinese and Hong Kong and USA legal advisors respectively; Jingtian & Gongcheng, and Fuli & De are the Chinese and Hong Kong and USA legal advisors for the broker respectively; Frost & Sullivan acts as its industry consultant.
According to the prospectus, in the shareholder structure after the listing, Mr. Wang Shugang can control a total of 85.00% of the voting rights of the company, with Mr. Wang holding 10.35% through his wholly-owned XCY Future Limited, 36.52% through controlled XCY Yongqing Limited, and 23.41%, 4.76%, 2.28%, 5.93%, and 1.75% through five controlled holding platforms: XCY Xuyuan Limited, XCY Huiming Limited, XCY Weiyuan Limited, XCY Zhiyuan Limited, and XCY Liyuan Limited respectively. Mr. Song Xiangqian's Jiahua Capital holds 6.40% through Harvest Delicacy; other public shareholders hold 8.60%.
Established in 2013, Xiaocaiyuan originates from Tongling, Anhui and is one of the well-known Chinese direct Dining chain restaurants, aiming to provide consumers with home-style dishes and attentive service at affordable prices. As of November 28, 2024, Xiaocaiyuan has a nationwide network of 633 operating directly-managed stores across regions in China including Anhui, Jiangsu, Shanghai, Zhejiang, Peking, Hubei, Tianjin, Guangdong, Hebei, Henan, ShanDong, Jiangxi, and others. The brand portfolio of Xiaocaiyuan includes "Xiaocaiyuan," "Guandi," "Fuxinglou," and "Caishou." According to data from Frost & Sullivan, based on the store revenue as of 2023, "Xiaocaiyuan" ranks first among all brands in the Chinese mass-market Dining sector with an average transaction value ranging from 50 to 100 yuan.
Xiaocaiyuan prospectus link:
https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1212/2024121200008_c.pdf
