
PE-backed Guoquan Food raises $52.5m in Hong Kong IPO

Guoquan Food, a Chinese hotpot ingredients supplier that now positions itself as a one-stop home meal solutions brand, is trading at a 8.8% premium to its IPO price following a HKD 411.4m (USD 52.5m) Hong Kong offering.
The company sold 68.8m shares at HKD 5.98 apiece, according to a filing. Cornerstone investors covered more than half of the offering. The stock closed flat on November 2, but rallied in early trading on November 6, reaching HKD 6.44 by late morning, comfortably outpacing gains in the Hang Seng Index. The company has a market capitalisation of approximately HKD 10.7bn.
The IPO comprised entirely new shares. IDG Capital is the largest external shareholder with 8.34% post-offering, according to a list of substantial shareholders in the prospectus. CMB International owns 7.04%, Vision Knight Capital has 5.07%, Genbridge Capital has 3.74%, and Buhuo Ventures has 2.06%. Several also have smaller holdings through separate investment vehicles.
Other investors include Shenzhen Hongshu Growth Investment Management – a CMB International spinout – TPG Capital, Tiantu Capital, Lighthouse Capital, Oakwise Asset Management, and a fund backed by baijiu maker China Kweichow Moutai. Guoquan also counts the likes of Sanquan Food, WM Tech – the parent of Wumart and Metro China – and Dmall as strategic backers.
The prospectus lists a pre-Series A of CNY 70m (USD 9.6m), a Series A of CNY 253m, a Series B of CNY 388.2m, and CNY 1.86bn in a first tranche of Series C funding. A second tranche of CNY 261.8m was a share transfer that gave Guoyuan control of Luyi Chengming, a supplier of hotpot soup base products.
AVCJ Research has records of a USD 300m Series D led by CMB and Tiantu in early 2021 and a USD 60m Series C led by GenBridge in 2020. The prospectus refers to these as the Series C and Series B rounds, respectively.
Guoquan was founded in 2015 and opened its first store in Zhengzhou, Henan province, two years later. By 2019, the company had 500 stores and its app launched the following year. As of December 2022, it had 9,221 franchised stores and a product portfolio encompassing hotpot and barbecue ingredients, solo-dining meals, ready-to-cook meal kits, fresh produce, Western cuisines, and snacks.
While HaiDiLao is China’s leading hotpot restaurant chain, Guoquan aims to become the dominant force in the “hotpot at home” market. It initially provided hotpot ingredients to small and medium-sized restaurants and then moved into the consumer market, selling directly to households.
Guoquan was the largest at-home hotpot and barbecue brand in China in 2022 by retail sales value, according to Frost & Sullivan. Over the course of the year, it fulfilled more than 100m orders through online and offline channels. In addition to the Guoquan app, the company has its own WeChat mini-program and distributes through third-party platforms such as Meituan and Ele.me.
China’s dining market grew from CNY 6.57trn in 2017 to CNY 8.91trn in 2021, while the home dining segment alone went from CNY 3.14trn to CNY 5trn. Of that, 5.8% was home meal solutions, 84% was buying fresh groceries and cooking at home, and 9.9% was restaurant delivery. By 2026, home dining is expected to account for CNY 6.46trn out of an overall dining market of CNY 12.45trn.
Hotpot products remain the key business driver, accounting for about three-quarters of revenue in 2022. Barbecue products contributed 10.1%. Revenue rose from CNY 3.9bn in 2021 to CNY 7.2bn last year. Over the same period, a net loss of CNY 460.9m became a net profit of CNY 240.9m and the company’s gross profit margin rose from 9% to 17.4%.
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