This is an English adaptation of a FoodBud historical article originally published on November 24, 2021.
Jiumaojiu has become a different kind of listed restaurant company in China. Haidilao remains concentrated in hot pot, Yum China is driven by KFC and Pizza Hut franchising, while Jiumaojiu grew out of northwestern Chinese cuisine and is now largely supported by Tai Er Suancai Fish.
On September 6, 2021, Jiumaojiu announced that the group had signed an equity transfer agreement with Huzhou Jiajun to buy an additional 3% stake in Tai Er for RMB300 million. On that basis, Tai Er’s valuation exceeded RMB10 billion, and Jiumaojiu’s holding in Tai Er Catering rose from 85% to 88%.
Jiumaojiu’s brand-incubation style is not disruptive innovation. It tends to make incremental changes in established categories and position those concepts toward younger consumers. Tai Er is still strong enough to support the group’s performance, but the market has been less forgiving: Jiumaojiu’s market capitalization was HKD26.9 billion at the time of the article.
Since its January 2020 listing, Jiumaojiu’s share price rose sharply through 2020 and peaked at HKD38.66 in February 2021. It then declined to HKD18.76 by the close on November 16, 2021, roughly halving from the peak. In November 2020, chairman and controlling shareholder Guan Yihong and another shareholder sold a combined 36.5 million shares at HKD16.88 per share, realizing HKD616 million.
Guan’s stated vision has been to do something interesting that young people like. Strategically, Jiumaojiu has followed that direction, but the group still needs its next Tai Er. Its external investments have been limited in number and impact, which helps explain the emphasis on internal incubation. At the time, Song Hot Pot looked like one possible next growth bet.
According to Jiumaojiu’s prospectus, the group had made only a small number of investments. Key examples included Jiang Er Dai Big Plate Chicken and Hun Fan Chi, later known as Lion Head Braised Food Research Institute. Too Two Gourmet Inc. was mainly engaged in restaurant operations in Canada. Jiang Er Dai and Hun Fan Chi had both declined in value.
Jiumaojiu also participated in the Jiurun Changfa fund, led by Ruan Zhiyong. Other participants included Jiumaojiu, Banu Hot Pot’s Du Zhongbing, Xibei’s Jia Guolong, Xijiade’s Gao Defu, Fish Cool’s Chen Shihong, and Le Caesar’s Chen Ning. The fund was small, with total capital of RMB20.4 million.
Another RMB1.92 million investment went into Zhuoji Catering, a Chinese pan-fried dumpling business that has since been deregistered.
Two investments were more notable:
Jiumaojiu uses Guangzhou Pinxin Yuegu Enterprise Management Co., Ltd. as its external investment platform. Based on its disclosed holdings and investments, Pinxin Yuegu had interests in 17 companies.
Beyond the IDG fund and Jiurun Changfa, it also participated in two other funds. One was Heyunshun, another IDG fund, which mainly invested in LAMTOYS and Tiantai Robot.
LAMTOYS is a culture and entertainment company covering IP incubation and licensing, designer and artist management, designer toys and derivative product development, promotion, and operations. Tiantai Robot is an industrial robotics developer focused on core components and manufacturing, with products including SCARA four-axis robots, six-axis robots, parallel robots, palletizing robots, and harmonic reducers. Its products can be used in sectors including home appliances, food, and pharmaceuticals. In August 2021, Tiantai Robot completed a RMB180 million Series B financing round.
Jiumaojiu also participated in Tomato Capital’s Nanjing Tomato No. 5 Equity Investment Partnership. Through that fund, it held indirect stakes in Banu Hot Pot and Fei Da Chu. At the time, the fund held 3% of Banu Hot Pot and 2% of Fei Da Chu.
Jiumaojiu held 100% of Guangzhou Curious Bear Catering Co., Ltd., the company behind Lai Meili Grilled Fish. Guan Yihong was reported to visit stores personally. The brand followed the same pattern: a defined category, incremental innovation, and youth-oriented positioning. Its success was still uncertain.
The group held 80% of Guangzhou Xiqin Catering Co., Ltd., operator of Liezu Chuan Cai Xiao Guan. Its menu included pickled-pepper sauce suancai fish and skewer sets. The brand had already faded from view by the time of the article.
Guangzhou Two Eggs Catering Co., Ltd. and Guangzhou Uncle Nawei Catering Management Co., Ltd. operated 2 Fried Eggs and Uncle Nawei. Recent financial report data cited in the article showed average performance.
Jiumaojiu also controlled Bu Pa Hu Beef Brisket with an 85% stake.
Other minority investments included Jiang Er Dai, Hun Fan Chi, Guangzhou Zuoji Catering Management Co., Ltd., and Hainan Yexiangcun Industrial Co., Ltd. Zuoji focused on pan-fried buns and pan-fried dumplings, with Jiumaojiu holding 16%. Hainan Yexiangcun, in which Jiumaojiu held 10%, focused on coconut-related snack products, using Hainan’s tropical fruits and ingredients to develop seasonal desserts, pastries, and snacks with local coconut-region characteristics.
Many of Guan Yihong’s restaurant-sector investments were small stakes. The pattern looked less like a major growth engine and more like relationship-building within the industry.
Guan regularly exchanged views in a small private board-style group with founders including Banu Hot Pot’s Du Zhongbing, Xibei’s Jia Guolong, Xijiade’s Gao Defu, Fish Cool’s Chen Shihong, and Le Caesar’s Chen Ning. The group would sometimes jointly contribute capital to selected projects, strengthening industry ties.
Jiurun Changfa itself had made only five external investments. Two were Dafulan and Yuepin Catering, both also involving Best Food Holding, with Jiurun Changfa holding 2% and 1.8% respectively.
Another portfolio company, Zhongshang, provided tipping and reward solutions. Jiurun Changfa held 3.6%, and participants also included Best Food, Xibei, and Song Ji, founder of Henjiuyiqian Catering.
Jiurun Changfa also invested in Yitaichang and Jiuguo Yitang, holding 3% and 10% respectively.
The overall picture is that Guan Yihong used investment partly to make more friends in the restaurant industry. But the large bets that could support Jiumaojiu’s growth and share price still depended mainly on internally incubated brands.
Note: IPO, valuation, share-price, financing, and ownership figures are historical as of the 2021 source article.