Five IPO attempts, one model in transition: reading Lao Xiang Ji's Hong Kong filing

Lao Xiang Ji (老乡鸡, "Home Original Chicken") is the largest home-style Chinese fast-food chain in China — the domestic answer to the KFCs and McDonald's that dominate the country's quick-service market — and it has spent four years failing to go public. Its latest Hong Kong filing (January 2026) is its third attempt on the HKEX and its fifth IPO try overall, after a journey that ran from the Shenzhen exchange to Shanghai and back out again. A ¥6.3-billion-revenue chain that the capital markets keep not quite admitting is a story in itself — and the prospectus rewards a careful read on two fronts: a business quietly rebuilding its ownership model, and a cautionary case in how hard it is to take a Chinese restaurant public.

(FoodBud covered Lao Xiang Ji's A-share attempts back in 2021 (opens in new tab) and 2022 (opens in new tab) — this is the Hong Kong chapter of the same long saga.)

Five tries in four years

The timeline is the angle. Lao Xiang Ji began IPO preparation in 2021, first toward the Shenzhen exchange, then switching to Shanghai's main board, where in 2022 it filed to raise ¥1.2 billion (our archive caught it at 1,099 stores (opens in new tab)). It withdrew the A-share bid amid the review process, then pivoted to Hong Kong, where it filed in January 2025, updated in July 2025, and filed a third time in January 2026 — joint-sponsored by CICC and Guotai Haitong. Local coverage tallies it bluntly: five IPO runs in four years.

Why does China's leading Chinese-fast-food chain keep stalling at the threshold? Part is the well-known difficulty of listing a restaurant on China's A-share market — cash-heavy operations, food-safety scrutiny, related-party complexity, and a slow, uncertain review process that has frustrated many restaurant names into the same Hong Kong pivot now driving a broader 2026 wave of Chinese F&B listings. Part is company-specific: reports flag a roughly halved valuation versus its A-share ambitions, a social-security contribution shortfall exceeding ¥100 million, slipping franchise margins, and a softening average check. The "first listed Chinese-fast-food stock" title is still unclaimed, and Lao Xiang Ji is still chasing it.

The numbers

Underneath the IPO drama is a real, growing business. Revenue rose from ¥4.53 billion (2022) to ¥5.65 billion (2023, +24.8%) to ¥6.29 billion (2024, +11.3%), and ¥4.58 billion in the first eight months of 2025 (+10.9%). Net profit tracked up — ¥252M → ¥375M → ¥409M, and ¥372M in 8M 2025 (+12%) — a net margin in the mid-single digits (~6–8%), typical for a value-priced, largely self-operated chain. The footprint reached 1,658 stores by August 2025 and 1,777 by year-end, across 61 cities in 9 provinces (still concentrated in its eastern-China heartland), and same-store sales were positive at +3.8% for the eight months. This is a profitable regional leader pushing national — not a turnaround, but a chain whose growth is decelerating and whose margins are under some pressure.

The real story: a model in transition

The most important thing the prospectus reveals isn't a single number — it's a shift in how Lao Xiang Ji is built, and it's exactly the kind of change that moves a company's scale basis underneath you.

Since 2020, Lao Xiang Ji has been converting company-operated stores into franchises. The mix has swung hard: company-operated restaurants fell from 1,007 (2022) to 914 (2024) and ~925 (Aug 2025), while franchised stores leapt from 118 to 565 to 733 — including 146 company-to-franchise conversions in 2024 and 32 more in early 2025. Management frames it as capital-efficient growth that lets it recoup prior investment and expand faster.

[!guardrail] A chain mid-transition has a moving scale basis For a FoodBud reader, this is a basis-in-motion case. Today Lao Xiang Ji's revenue (~¥6.3B) is still mostly its own company-operated store sales — so its revenue today is close to its operational scale, the way it is for a Chipotle or a Darden. But as franchising grows, two things start to happen: the company's reported revenue increasingly mixes franchise fees and supply sales with shrinking company-store sales (note the prospectus's own flag that company-store revenue is declining), and a gap begins to open between the chain's system-wide sales (what customers spend across all 1,777 stores) and Lao Xiang Ji's revenue (its company stores plus its take from franchisees). It is, in slow motion, doing what McDonald's and Domino's did decades ago — migrating from operator toward franchisor. The caliber lesson: don't assume a static basis for a chain mid-transition. Right now you can read Lao Xiang Ji roughly as a company-operated chain (revenue ≈ scale); in a few years, you'll have to read it as a hybrid, and the franchise-versus-company mix will decide which number means what.

What to watch

The transition has costs, and the filing is honest about them: franchise-store gross margins are slipping, average check is softening, overall growth is decelerating, and there's the ¥100-million-plus social-security gap to clean up — all while the valuation has come down from its A-share peak. The proceeds are earmarked for the unglamorous but right things: integrated supply chain, store-network expansion, IT/digital and smart-equipment upgrades, brand marketing, and working capital. The question the fifth IPO attempt poses is whether Lao Xiang Ji can keep growing the system (increasingly via franchisees) without letting unit economics and brand consistency erode — the classic tension every chain hits when it shifts the model.

The caliber takeaway

Lao Xiang Ji is two lessons in one filing. First, read the IPO journey for what it signals: five attempts in four years isn't just bad luck — it's the genuine difficulty of taking a Chinese restaurant public, and the reason a whole cohort is now routing through Hong Kong. Second, read the model transition: Lao Xiang Ji's scale basis is in motion — today revenue ≈ company-operated scale, but a fast-growing franchise mix is opening the system-sales-versus-revenue gap, so the right way to size it will change. Do not treat its revenue as a fixed proxy for scale, do not read decelerating company-store revenue as the brand shrinking (it's converting stores to franchises), and note that Lao Xiang Ji is not yet a FoodBud locked operator — these figures come from its prospectus, and it's a candidate to add to the data layer once it lists. It sits in the same 2026 Hong Kong F&B IPO wave we're tracking, and it's an early-stage version of the operator-to-franchisor migration we cover in full at Domino's (opens in new tab) and Yum! (opens in new tab).

Lao Xiang Ji (LXJ International) — the data card

Caliber notes. Scale basis ≈ company-operated revenue today (revenue is mostly its own store sales), but in active transition as franchising grows (直营 declining, 加盟 surging) — the system-sales-vs-revenue gap is starting to open, so the correct basis will shift over time; do not treat revenue as a fixed scale proxy. Declining company-store revenue reflects store-to-franchise conversion, not brand contraction. RMB-reported; USD approximate (~¥7.15/US$). Not a FoodBud locked operator — figures are from the latest HKEX prospectus (S1) and coverage (S2); a candidate for the data layer once listed. Our 3 archive pieces (2021–22) cover the earlier A-share chapter and are historical (stale at 1,099 stores).

Sources. Lao Xiang Ji (LXJ International Holdings) HKEX prospectus, third filing Jan 2026 (CICC + Guotai Haitong); revenue (¥4.53B/5.65B/6.29B; 8M'25 ¥4.58B), net profit, store counts (1,658→1,777; 直营/加盟 split), conversions, SSS, and IPO-history/flags per the prospectus and coverage (Sina, Tencent, STCN, Nanfang, SCMP, Jan 2026); A-share withdrawal and the five-attempt timeline. Cross-references: FoodBud Lao Xiang Ji archive (2021–22); Domino's (C10) and Yum! (C2) — the franchisor model it is migrating toward; the 2026 China F&B Hong Kong IPO wave.