Chinese noodle chain operator Guangzhou Xiao Noodles Catering Management Co launched its initial public offering on the Hong Kong Stock Exchange on Friday, raising about HK$685 million ($88 million), but its shares closed the day down at HK$5.08 — 27.84 percent lower than the offering price of HK$7.04.
Cornerstone investors, including Hai Di Lao Holdings Pte Ltd, Guotai Junan Investments (Hong Kong) Ltd, and Hillhouse Investment Management’s HHLRA, subscribed to $22 million worth of shares.
According to its IPO filings, approximately 60 percent of the net proceeds will be used to expand the restaurant network, broaden geographical coverage and deepen market penetration. The remaining funds will be allocated for advancing technology and digital systems, brand building and customer loyalty programs, potential strategic investments in the upstream food processing industry on the Chinese mainland, as well as for general corporate purposes and working capital.
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Xiao Noodles currently operates outlets in 22 cities across the mainland and the Hong Kong SAR. The company plans to open its first overseas store in Singapore by year-end to realize its vision of “bringing Chinese noodles to the world”, said founder and CEO Song Qi.
The prospectus also said that average spending per order at the same stores has consistently declined, dropping from 35.5 yuan ($5) in 2022 to 32.6 yuan in 2024. During the same period, the daily seat turnover rate fluctuated between three and four times and decreased year-on-year in the first half of 2025. The company attributed these trends to proactive price reductions and promotional campaigns on food delivery platforms, which shifted some dine-in customers to online orders.
The benchmark Hang Seng Index edged up 0.58 percent to close at 26,085 points. The Hang Seng China Enterprises Index — a key gauge of mainland-based companies listed in Hong Kong — rose 1.01 percent to end at 9,198 points. The Hang Seng Tech Index, which tracks the largest technology firms listed in the city, gained 0.84 percent to finish at 5,662 points.
Contact the writer at akirawang@chinadailyhk.com
