This is an English adaptation of a FoodBud historical article originally published on October 15, 2021.
On October 14, 2021, Lao Niangjiu Catering Co., Ltd. disclosed IPO counseling registration documents with the Zhejiang securities regulator, with CITIC Securities as the counseling broker. The company planned an A-share IPO. The filing described Lao Niangjiu as founded on May 12, 2000, with registered capital of RMB 340 million.
Since its founding, Lao Niangjiu has received investment from Jinbang Capital, Cornerstone Capital, Hangzhou City Investment and others. Before the planned IPO, Jinbang Capital was its largest institutional investor.
Lao Niangjiu was founded in 2000, and its first restaurant opened on November 2, 2000. The company positions itself around Chinese quick-service restaurants built around rice meals, with the brand line "For particular rice, eat Lao Niangjiu."
According to Narrow Door Dining Eye data cited in the article, Lao Niangjiu had 386 stores as of October 5, 2021. Each store could serve more than 1,000 meals per day on average. All stores were located in Jiangsu, Zhejiang, Shanghai and Anhui:
The company’s operating model centers on standardized Chinese rice-based fast food. The article describes an integrated chain from ingredient tracing and selection, to standardized central-kitchen production, to simplified store-level execution. Lao Niangjiu also built a central-kitchen and logistics platform and a full-chain quality-control system to support consistency, product safety and scalable operations.
The company was described as one of the larger and more standardized Chinese fast-food chains in the Yangtze River Delta core region. It had provided catering services for major events including the 2010 Shanghai World Expo, the 2016 Hangzhou G20 Summit and the 2018 Zhejiang Provincial Games. It had also received honors including 2019 China Fast Food Rice Representative Brand, Zhejiang Famous Brand Product, and 2020 Zhejiang Province Outstanding Enterprise for Market Supply Contribution During COVID-19 Prevention and Control. It had entered the "Top 100 Chinese Catering Enterprises" list for multiple consecutive years.
The company’s actual controllers were Yang Guomin and his son Yang Junhui. Yang Guomin directly held 39.58% of the company, while Yang Junhui directly held 8.96%.
Yang Junhui also indirectly controlled 4.54% through three employee shareholding platforms: Huzhou Tongzi Investment Consulting Partnership (Limited Partnership), Huzhou Xiaowaisheng Investment Consulting Partnership (Limited Partnership), and Huzhou Hengchuang Investment Consulting Partnership (Limited Partnership). Together, Yang Guomin and Yang Junhui controlled 53.08%.
At the time of the counseling filing, Yang Guomin served as executive director/chairman and general manager, while Yang Junhui served as vice chairman and deputy general manager.
Among the top five shareholders and shareholders holding more than 5% was Jiang Jianqi, chairman of A-share-listed beverage company Xiangpiaopiao. Jiang personally held 29.6727 million shares, equal to 8.73%, and had served as a director of Lao Niangjiu since February 2016.
The fifth-largest shareholder was Tibet Jinbang Jinda Venture Capital Partnership (Limited Partnership), holding 7.27%. The article notes that the entity was affiliated with K-Boxing menswear.
A related clue cited by the article was an October 2020 press release from Jinbang Capital, the investment platform under Shanghai Jinbang Equity Investment Management Co., Ltd. of K-Boxing, saying that Lao Niangjiu Catering Co., Ltd. had held its founding meeting and formally begun its journey toward a main-board listing.
Hu Jiayi held 18.5455 million shares, equal to 5.45%. The shareholder was born in 2001, placing her in China’s post-2000 generation, and was studying at the University of British Columbia.
Media reports cited by the article said Lao Niangjiu introduced Shenzhen Daxin Venture Capital in 2007 and brought in strategic investment from Shanghai Fosun Pingyao Investment Management Co., Ltd., under Fosun Group, at the end of 2008. On January 2, 2020, Fosun Pharma replied to an investor question on the Shanghai Stock Exchange’s interactive platform, saying that, as of that point, the group no longer held equity in Zhejiang Lao Niangjiu Catering Co., Ltd.
The article described Chinese fast food as still highly competitive. Rice-based fast food was cited as the largest sub-segment of Chinese fast food, accounting for 52%. Based on that share, the article estimated the rice-fast-food market at more than RMB 1 trillion, with more than one million stores.
The modern, systematized Chinese rice-fast-food sector was described as having developed over roughly the previous 30-plus years, despite a much longer history of inexpensive and convenient rice meals.
Brands including Country Style Cooking, Lao Xiang Ji, Real Kungfu and Lao Niangjiu had been adjusting positioning, testing new models and expanding quickly. Under the impact of the pandemic, Lao Xiang Ji was still accelerating national expansion, with total store count expected to exceed 1,000 in 2020. Country Style Cooking had also received several hundred million yuan in financing from Sequoia China in the previous year, with the funds mainly intended for store expansion.
In 2019, Lao Xiang Ji recorded annual sales of RMB 3 billion, ranking ahead of Country Style Cooking and Real Kungfu. The article says that because of this, Lao Xiang Ji was then considered a leading Chinese fast-food brand, although it had only a little over 800 self-operated stores that year. In 2020, Country Style Cooking exceeded 1,000 stores; using store count as the benchmark, the article said Country Style Cooking would then rank ahead of Lao Xiang Ji.
Compared with those peers, Lao Niangjiu’s fewer than 400 stores left it at a smaller scale than Lao Xiang Ji and Country Style Cooking.
The article framed Chinese rice fast food as entering another rapid expansion phase, with regional leaders already formed but no national leader or listed company yet established. It argued that the next stage would involve regional champions expanding nationally and competing for category leadership.
The operational hurdles identified were:
Reference cited in the original article: RedCan, "2020 China Top 10 Chinese Fast Food Brands Announced: Who Can Become China’s McDonald’s?" http://www.canyin88.com/zixun/huodongbaodao/2020/0827/80684.html
Note: IPO plans, ownership percentages, financing details, store counts and forward-looking targets above are historical figures from the October 15, 2021 source article.