Chinese restaurant chain operator Jiumaojiu raises $267m in HK IPO

Chinese cuisine restaurant chain operator Jiumaojiu International Holdings Limited raises HK$2.08 billion ($267 million) in an initial public offering (IPO) in Hong Kong on January 15, 2020. Source: Visuals from a statement

Chinese cuisine restaurant chain operator Jiumaojiu International Holdings Limited has raised HK$2.08 billion ($267 million) in an initial public offering (IPO) in Hong Kong on early Wednesday.

The company sold shares at HK$6.60 ($0.85) apiece, the top end of its proposed range of HK$5.50 ($0.71) to HK$6.60. Total proceeds could rise to HK$2.39 billion ($307 million) if an additional allotment of shares is placed out to meet excess demand.

Jiumaojiu, which counts China-focused investment firm IDG Capital as one of its earliest investors, operates as a Chinese cuisine restaurant and brand operator that specialises in providing quick meal services with a modern decoration of restaurants primarily located in shopping malls.

The company operated 287 restaurants and managed 41 franchised restaurants in 39 cities in China as of December 2019, according to its prospectus. It plans to open about 370 new self-operated restaurants from 2019 to 2021.

Guangdong-based Jiumaojiu currently manages five self-developed cuisine brands, including northwestern Chinese cuisine restaurant chain Jiu Mao Jiu and pickled Chinese sauerkraut fish brand Tai Er, which account for over 98 per cent of the firm’s total revenue.

The firm recorded 1.24 billion yuan ($180 million) in total income and 116 million yuan ($17 million) in net profit in the first half of 2019, compared to a total income of 1.89 billion yuan ($274 million) and a net profit of 101 million yuan ($15 million) in 2018, shows the prospectus.

Jiumaojiu will use the proceeds to expand the restaurant network, further strengthen the supply and support capabilities, and enhance its centralized procurement system.

The IPO of Jiumaojiu, which is so far the largest stock offering in the city in 2020, came after the Asian financial centre reclaimed the global IPO crown in 2019 with a combined HK$307.8 billion ($39.64 billion) being raised across 160 IPOs, according to KPMG.

Thanks to Alibaba who set a record IPO of $13.4 billion last November, the Hong Kong bourse topped the global IPO market for the seventh times in the past 11 years, although the territory has been suffering from seven months of sometimes-violent civil unrests.

Charles Li Xiaojia, CEO of Hong Kong Exchanges and Clearing Limited (HKEX), expects more Chinese companies to go public on the city’s exchange in 2020 due to its proximity to the home market and companies’ desires for a diversified mainland shareholder base amid geopolitical uncertainties, including China’s unsettled trade war with the United States.

IDG Capital participated in the Series A round of Jiumaojiu in 2014.

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.