This is an English adaptation of a FoodBud historical article originally published on September 20, 2021.
On September 6, 2021, Qianwei Central Kitchen listed on China’s A-share market and was described domestically as the first restaurant supply-chain stock. Its market value was RMB 1.9 billion at listing and had risen to RMB 4.54 billion by the time of the original article.
Asian Seafood Port, another restaurant supply-chain company, had a more difficult path. It submitted its ChiNext IPO application to the Shenzhen Stock Exchange in July 2020. More than 14 months later, it had gone through two financial-data updates, one on-site supervision process, and two rounds of inquiry responses.
The company had completed its second-round inquiry response. The exchange’s 10 questions in that round all centered on issues found during on-site supervision, with particular attention on how intermediaries verified Asian Seafood Port’s distributor customers and their end customers.
According to the prospectus, Asian Seafood Port had RMB 412 million in cash and cash equivalents as of December 31, 2020. It planned to raise RMB 330 million for two projects:
The central cold-chain processing project was planned for Dafangshen, Changlingzi Village, Changcheng Subdistrict, Lushunkou District, Dalian, within Dalian Green Food Industrial Park. The site was planned at 38,062.11 square meters, with total planned construction area of 50,000 square meters. Facilities would include a production dispatch command center, dormitory, R&D and product-control center, production workshop, supporting cold storage, equipment rooms, and wastewater-treatment facilities.
The project also planned to add 540 sets of equipment, including horizontal shelf plate freezers, beaters, and bowl cutters. After completion, it was expected to address the mismatch between rising market demand and limited company capacity, increase production and sales scale, improve control over processing and finished-product quality, and create a new profit growth point. Designed capacity after launch was 15,000 tons.
The Qianjinbao supply-chain project was intended to support expanding business scale and improve production and delivery efficiency. After phased implementation, the company expected to upgrade its information-management system, reinforce its national logistics network, expand coverage, deepen city-level sales networks, and improve the digitalization of national distribution centers.
The project would be implemented by subsidiary Qianjinbao Supply Chain Co., Ltd. It included RMB 17 million for new hardware and software development for an internet management platform, 12 planned national warehousing and logistics nodes, RMB 33 million in warehouse-leasing investment, and RMB 30 million in initial working capital.
The prospectus showed Asian Seafood Port’s controlling shareholder was Yayu Industrial, with a 59.73% stake. The actual controller was Jiang Xiao. Its shareholder roster included New Hope and Meituan-related entities.
Houyi Investment and New Hope Investment held 7.47% and 6.42%, respectively, making them the third- and fourth-largest shareholders. New Hope Investment is a wholly owned subsidiary of New Hope Group, and New Hope Investment contributed 86.35% of Houyi Investment’s capital. Together, the New Hope group entities held 13.89% of Asian Seafood Port.
Tianjin Zhongmei was the second-largest shareholder, with 9.96%, and its ultimate controller was Meituan. Longzhu held 4.98%. The prospectus stated that Longzhu’s executive partner was Ningbo Meishan Bonded Port Zone Meixing Investment Management Co., Ltd.; Meituan controlling shareholder Wang Xing held 29.9% of that company, Meituan senior manager Chen Shaohui held 15.1%, and Zhu Yonghua held 55%.
Meituan co-founder, executive director, and senior vice president Wang Huiwen, and New Hope Group vice chairman Wang Hang, both served as directors of Asian Seafood Port.
After the planned issuance, New Hope Investment and Houyi Investment would hold 4.81% and 5.6%, respectively, while Tianjin Zhongmei and Longzhu Investment would hold 7.47% and 3.73%, respectively.
Like Qianwei Central Kitchen, Asian Seafood Port focused on the restaurant ingredient supply-chain sector. Unlike Qianwei, which focused on frozen rice and flour products, Dalian-based Asian Seafood Port used the city’s marine resources to build one of China’s largest seafood supply-chain businesses, with hundreds of prepared seafood products.
Its products were mainly frozen deep-processed and primary-processed marine products, sold primarily to foodservice companies. Chain and end foodservice customers included IKEA, Wallace, and Coucou.
The company described its core business as branded ingredient supplier and supply-chain services, combining traditional industry with new technologies, formats, and models. It focused on product R&D, brand and channel management, cold-chain distribution, quality control, and information-system management. Products were mainly made through outsourced processing.
From 2018 to 2020, Asian Seafood Port reported:
Performance declined sharply in 2020. Revenue fell 25.48% year on year, while net profit fell 33.39%. Revenue from deep-processed products declined 23.73%, and revenue from primary-processed products declined 45.92%.
Sales were concentrated in East China and North China. In 2020, East China accounted for 45.97% of sales and North China for 19.71%.
From 2018 to 2020, revenue from newly added distributors was RMB 41.4288 million, RMB 43.1149 million, and RMB 29.0271 million, representing 6.45%, 6.41%, and 5.61% of distributor revenue in each period. New-distributor revenue was relatively small overall, with legacy customers contributing the majority.
For deep-processed products, distributors accounted for about 70% of sales, mainly under buyout-style distribution. The company had built a nationwide distributor-management system by region and product.
As foodservice became more standardized and chain-driven, Asian Seafood Port sold directly to large restaurant chains such as IKEA, Wallace, Dalian Tongdelai, and Coucou. It also used its self-developed online supply-chain management platform to supply smaller foodservice ingredient wholesalers and restaurant end customers through direct sales.
In 2020, Meituan and IKEA were the company’s largest and second-largest customers, accounting for 6.99% and 2.24% of sales, respectively.
In 2020, Asian Seafood Port’s top five suppliers accounted for 57% of procurement value.
The company purchased deep-processed products from contract manufacturers, with disclosed procurement amount, quantity, unit price, and period-on-period changes in the prospectus. For primary-processed products purchased from contract manufacturers, shrimp products, especially shrimp meat, were the main category. Other products included fish products, mixed seafood products, beef and lamb, and shredded kelp.
For self-produced products, the company also disclosed raw-material procurement. Primary-processed product procurement mainly included shrimp products and other primary-processed products such as fish and abalone.
Note: IPO, fundraising, shareholding, capacity, and forward-looking project figures are historical, based on the September 20, 2021 source article.