This is an English adaptation of a FoodBud historical article originally published on November 1, 2022.
FoodBud reported in November 2022 that Chinese fast-food chain Lao Xiang Ji had updated its IPO prospectus. As of the reporting period, the company operated 1,099 stores nationwide: 997 directly operated stores and 102 franchised stores.
In the first half of 2022, Lao Xiang Ji added a net 6 directly operated stores and a net 20 franchised stores.
Among the 102 franchised stores:
The prospectus also disclosed franchise-fee details, though the original article does not provide the specific fee schedule.
For the first half of 2022, Lao Xiang Ji reported:
By product sales volume in the first half of 2022:
In the first half of 2022, direct materials accounted for 40.7% of Lao Xiang Ji’s main business costs, while direct labor accounted for 30.32%.
For store-level raw-material procurement, Lao Xiang Ji mainly used centralized procurement through the company. Distribution was also mainly handled centrally by the company, with a small portion delivered directly by suppliers and another small portion purchased independently by stores on an ad hoc basis.
FoodBud noted that after the pandemic, Lao Xiang Ji’s delivery-service expense ratio had increased. In the first half of 2022, delivery service fees reached RMB 100 million and accounted for 82% of selling expenses.
For the planned listing, Lao Xiang Ji intended to raise RMB 1.2 billion and issue 63.53 million shares.
FoodBud also noted that the prospectus disclosed detailed first-half performance data for Lao Xiang Ji’s stores, and commented that opening new directly operated stores during a special period was a difficult business.
Note: IPO, fundraising, store-count, and forward-looking figures above are historical disclosures from the 2022 source article.
