Yujian Xiaomian Passes Listing Hearing with Debt-to-Asset Ratio as High as 87.83%

ZC Asia has learnt that, according to the latest disclosure from the Hong Kong Stock Exchange, Guangzhou Yujian Xiaomian Catering Co., Ltd. (hereinafter referred to as ‘Yujian Xiaomian’) passed its listing hearing on 17 November 2025, with CMBI acting as the sole sponsor. According to a Frost & Sullivan report, Yujian Xiaomian ranked fourth in China's Chinese noodle restaurant market in 2024 based on total merchandise transaction value, with a market share of 0.5%.

As of 8 October 2025, Yujian Xiaomian has established a network spanning 440 restaurants across 22 cities in mainland China and 11 restaurants in the Hong Kong Special Administrative Region, with 101 new outlets in pre-opening preparation. Regionally, over half of its restaurants are concentrated in Guangdong Province, reflecting a pronounced regional concentration in its business footprint.

Chinese noodle restaurants constitute a significant segment of China's Chinese fast-food market, accounting for approximately 29.8% of the market share in 2024. The Chinese fast-food market itself holds roughly 17.6% of China's catering services market. Notably, China's Chinese fast-food restaurant market is highly fragmented, with the top five players collectively holding only about 3.0% market share. Yujian Xiaomian ranks thirteenth in this sector, commanding a 0.14% market share.

Financial pressures intensify

Publicly available data indicates that by the first half of 2025, Yujian Xiaomian's debt-to-asset ratio reached 87.83%. With cash reserves below RMB 50 million yet burdened by approximately RMB 500 million in debt, its current ratio stood at a mere 0.56 – significantly below industry benchmarks for financial health. This highlights substantial short-term liquidity constraints.

Operationally, Yujian Xiaomian faces persistent challenges from declining average transaction values. Data reveals this metric fell from ¥36.2 in 2022 to ¥31.8 in the first half of 2025. Concurrently, the average daily sales per company-owned outlet have also declined, falling from ¥14,000 in 2023 to ¥12,400 in 2024. This shift suggests the company may be employing a ‘price-for-volume’ strategy to maintain market share, though this approach has contributed to a decline in same-store sales during 2024.

Regulatory and Operational Risks

Regarding food safety, public records indicate Yujian Xiaomian faced regulatory sanctions twice in 2024. In June, the Haidian District Market Supervision Administration in Beijing ordered corrective measures and issued a warning for ‘inadequate implementation of primary food safety responsibilities.’ In November, the Dongcheng District Market Supervision Administration penalised the company for ‘failing to maintain a clean environment in food operation premises.’

Additionally, the company became embroiled in a labour dispute in April 2025. Following its prospectus submission, it was revealed that the company had unilaterally dismissed its PR director during the probationary period. The dismissal notice was issued while the employee's child was ill and was sent to the employee's family address, sparking industry debate.

According to information previously disclosed by the China Securities Regulatory Commission, Yujian Xiaomian plans to issue no more than 235 million ordinary shares for overseas listing. Market analysis suggests the proceeds from this listing will primarily fund restaurant network expansion and strategic investments and acquisitions in the upstream food processing sector, potentially representing a key initiative to overcome current developmental bottlenecks.

Amidst intense industry competition, whether Yujian Xiaomian can leverage capital market resources to achieve operational breakthroughs and improve its financial standing remains subject to further market observation.

Disclaimer: The content herein is for reference only and does not constitute any form of investment advice. Should any information contained herein prove inaccurate, incomplete, or potentially misleading, please refer to the company's official announcements. Market risks exist; investment requires caution.