LXJ International submits request for IPO in Hong Kong

HONG KONG – Chinese QSR chain Lao Xiang Ji (LXJ) International has revealed it has submitted an application for an initial public offering (IPO) in Hong Kong.

Lao Xiang Ji (LXJ), known for its Home Original Chicken brand, is aiming to raise capital through an IPO to strengthen its restaurant network, enhance its integrated supply chain, expand its menu offerings, and improve the overall dining experience for customers.

Additionally, the funds will be used to advance the company’s digitalisation and intelligent technology capabilities.

This move follows two unsuccessful attempts to list shares on the Shanghai Stock Exchange in 2024.

While the exact size of the latest offering has not been disclosed, the company previously sought to raise 1.2 billion yuan (US$164 million) before withdrawing its submission in August 2024.

Founded in 1982 in Anhui province, LXJ has evolved from a chicken farm to a prominent restaurant chain under the leadership of Chairman Shu Xiaolong.

The company opened its first restaurant in 2002. By September 30, 2024, LXJ operated 1,404 restaurants, including 949 self-operated and 455 franchised outlets across 53 cities in nine provinces of China.

The company’s IPO application follows the debut of Xiaocaiyuan International, a Chinese budget restaurant chain, on the Hong Kong Stock Exchange.

For the nine months ending September 30, 2024, LXJ reported revenues of 4.67 billion yuan (US$637.8 million) and a gross profit of 1.09 billion yuan (US$148.9 million).

Hong Kong’s stock exchange saw 71 new listings in 2024, raising HK$87.5 billion (US$10.5 billion), marking an 89% increase from the previous year.

This surge helped Hong Kong rank fourth among the world’s busiest IPO venues.

LXJ’s decision to pursue a listing in Hong Kong rather than Shanghai reflects a broader strategy aimed at business growth, reflecting Hong Kong’s attractiveness as a preferred destination.

The capital raised from the IPO is expected to support key areas such as supply chain enhancement, which will improve operational efficiency and reduce costs, and restaurant network expansion, potentially extending LXJ’s market reach beyond China.

These efforts align with the company’s goal to solidify its market leadership in the fast-food industry.

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