Lao Xiang Ji Begins A-Share IPO Preparation as It Pushes Beyond Anhui

This is an English adaptation of a FoodBud historical article originally published on November 3, 2021.

On November 3, 2021, the Anhui bureau of the China Securities Regulatory Commission listed Anhui Lao Xiang Ji Catering Co., Ltd. in its IPO tutoring status table as of October 20.

According to the company’s first tutoring filing, Lao Xiang Ji signed a listing tutoring agreement with Guoyuan Securities in September 2021 and filed it with the Anhui regulator. The planned venue was the Shenzhen Stock Exchange main board.

Guoyuan Securities’ filing showed that Lao Xiang Ji Co., Ltd. was founded on October 22, 2003, and converted into a joint-stock company on July 28, 2021. It had registered capital of RMB36.6 million and operated primarily in Chinese fast food.

At the time, the company website said Lao Xiang Ji operated more than 1,000 fast-food restaurants across markets including Anhui, Nanjing, Wuhan, Shanghai, Shenzhen, Beijing, Hangzhou, Suzhou and Xuzhou. By 2020, it had served 600 million customer visits cumulatively and 500,000 customers per day on average.

Ownership and IPO Rationale

In the ownership structure disclosed in the filing, Shu Xiaolong, son of founder Shu Congxuan, held 71.457% of Lao Xiang Ji in aggregate and was the ultimate beneficiary. He held 25% directly and the rest indirectly through entities including Hefei Yuyi Enterprise Management Co., Ltd. and Qingdao Shudong Enterprise Management Consulting Partnership (Limited Partnership). Shu Xiaolong served as vice chairman.

Jiahua Capital held 4.978% through Yuhe (Tianjin) Equity Investment Fund Partnership (Limited Partnership).

In the tutoring filing, Lao Xiang Ji said it aimed to use equity financing through the securities market to expand sales channels, increase central-kitchen capacity, improve market share and competitiveness, strengthen capital resources and accelerate its core business.

From Feixi Laomuji to Lao Xiang Ji

Lao Xiang Ji was originally named Feixi Laomuji and focused on chicken soup. By the time it decided to rename the brand, it already had more than 100 stores.

In 2011, after hearing a strategic positioning report from Trout & Partners, founder Shu Congxuan agreed to rebrand Feixi Laomuji as Lao Xiang Ji. The article described the change as an overnight switch made without prior public notice.

The strategic logic was that Chinese fast food represented a larger opportunity than chicken soup alone. The old name carried a local Anhui association, while “Lao Xiang Ji” was positioned as a name understandable nationwide.

The company initially adopted the positioning of “Anhui’s largest chain fast-food brand” and emphasized “clean and hygienic” operations. It narrowed its focus to fast food, concentrated resources in Anhui, and accelerated direct-store openings. The article frames Anhui as a base for management refinement, supply-chain upgrading and market testing before national expansion.

By 2016, Lao Xiang Ji had more than 400 directly operated stores in Anhui. It then entered Wuhan and Nanjing, opening more than 60 directly operated stores in those two cities within a year. In 2019, it entered Shanghai.

The article says Lao Xiang Ji had about 300 stores in 2014. Over the following five years, store count and revenue both tripled, reaching RMB2.2 billion in 2018.

Positioning Against National Fast-Food Leaders

After moving from “Anhui’s largest fast-food brand” toward a broader “Chinese fast-food” positioning, Lao Xiang Ji’s next ambition, according to the article, was to become China’s top fast-food brand overall.

The competitive framing was explicitly aimed at KFC: Lao Xiang Ji promoted native chickens raised for 180 days versus broiler chickens raised for 45 days. The article also referenced Zhen Kung Fu’s steamed-food positioning as an example of competing against fried Western fast food on nutrition, while suggesting Lao Xiang Ji could combine that line of attack with its 180-day chicken ingredient claim.

Founder’s Long-Termism

The article also highlighted lessons from Shu Congxuan’s diversification attempts. After building Lao Xiang Ji, he considered specialty retail, agritainment and even real estate. The article says specialty stores selling live chickens in wet markets lost more than RMB10 million, while agritainment lost RMB40 million to RMB50 million. Shu said he did not ultimately enter real estate, which he believed could have created losses of hundreds of millions or even RMB2 billion to RMB3 billion and potentially dragged down Lao Xiang Ji.

His stated view was that restaurant operators should remain grounded in the industry: improve dishes, improve service and focus on customer experience rather than relying on advertising. The article also cited a local Anhui practice in which, on Lunar New Year’s Eve, one store offered free meals to patients going to hospital, traffic police and sanitation workers.

A Broader IPO Wave

The article closed by noting that another Chinese fast-food brand, Laoniangjiu Catering Co., Ltd., had recently disclosed IPO tutoring documents with the Zhejiang securities regulator, with CITIC Securities as its tutoring broker. It asked whether Country Style Cooking might be next in a sector where leading Chinese fast-food brands were entering a wave of A-share listing preparation.

Note: IPO plans, ownership percentages, revenue figures and competitive targets above are historical, based on the article’s November 2021 reporting.