Juhui rides domestic catering boom to Hong Kong IPO

The Chongqing-based maker of compound seasonings for restaurants hopes to follow in the footsteps of rival Haitian’s $1.28 billion listing last year

Key Takeaways:

• Juhui has filed for a Hong Kong IPO, betting on the $840 billion domestic catering market for growth despite margin pressure from competition
• The company makes customized seasonings for restaurant chains, whose penetration rate in China is relatively low compared to mature markets like the U.S. and Japan

By Edith Terry

In July 1999, two chemistry majors from China’s Southwest University, Gou Zhongjun and Wang Bin, started working part-time helping hot pot restaurant owners create their soup bases, which varied from chef to chef. Orders for their unique business blend quickly poured in, and they began serving as silent partner to popular local hot pot brands like Liuyishou, Chongqing Little Swan and Chengdu-based Shizilou.

The pair set up their own company, Juhui Corporate Management, in 2008, and went on to serve some of China’s fastest growing national restaurant chains, from hotpot specialists Haidilao and Xiabuxiabu, to others like the well-known LXJ chicken chain.

Now, Juhui Food Technology Co. Ltd. has become China’s fourth largest seasonings maker and is seeking to follow larger rival Haitian (3288.HK; 603288.SH) to the capital market with plans for a Hong Kong IPO. State-owned Haitian is the sector’s leader, raising a spicy HK$10 billion ($1.27 billion) in its Hong Kong listing a year ago.

Whether Gou and Wang can do the same will depend on whether the market likes their more niche business supplying compound food seasonings, which makes up about a quarter of the overall domestic seasonings market. Juhui is the largest company in that niche, although competitors like Yihai International (1579.HK) and Teway Food (603317.SH), which is also eyeing a Hong Kong listing, are close behind.

Juhui, which filed its preliminary prospectus last week, is hoping investors will value its track record of industry experience and the low penetration rate of chain restaurants in China, which are its main customers, relative to mature markets like the U.S. and Japan.

Its 2025 profit of 125 million yuan and a price to earnings (P/E) ratio of 21, comparable to Haitian, would value the company at about 2.6 billion yuan ($383 million), a tiny fraction of the roughly 200 billion yuan for the much larger Haitian, the nation’s leading soy sauce maker. Then again, Haitian is much older and more established, with more than a century of history, compared with just two decades for Juhui.

Strong growth potential

China’s compound seasoning market was worth 130.2 billion yuan last year, accounting for about a quarter of an overall national seasonings market worth 511.3 billion yuan, according to third-party market research in its prospectus. While China’s overall seasonings market is expected to grow 6.2% annually through 2030, compound seasonings, which include more than a single ingredient, are expected to grow at a faster 9.8%.

The increasing demand for pre-mixed seasonings partly reflects demand from younger consumers who don’t necessarily feel a need to make everything from scratch. But Juhui sells strictly to other businesses, meaning its growth is driven by the rapid growth of catering enterprises that depend on its consistent quality and customization abilities.

Mid-range restaurant chains with between 500 and 1,000 outlets increased their store count by 32.6% annually last year, with chains operating 101 to 500 stores increasing by 28.3%, according to a 2026 report by the China Chain Store & Franchise Association (CCFA). Overall, chains boosted their share of China’s restaurant market from 21% in 2023 to 25% last year, according to the CCFA.

Chain restaurants accounted for just 22.9% of China’s total last year, well below 56.9% in the U.S. and 53.2% in Japan, which Juhui says offers significant growth potential for its business, which comes mostly from chain operators.

That kind of data certainly spices up Juhui’s IPO application more than the company’s actual revenue and profits, which were relatively flat between 2023 and 2025. Both revenue and profit actually dipped last year, the former down 2.6% to 1.11 billion yuan and the latter down 18% to 125 million yuan. But things picked up in the first three months of this year, with revenue up 21% year-over-year to 297 million yuan and profit up 71% to 29.7 million yuan.

The company’s gross profit margin also flatlined between 2023 and 2025, and then fell slightly to 30.2% in the first quarter from 30.3% a year earlier. Falling average selling prices for the customized compound seasonings that make up 95% of Juhui’s revenue are a factor that continues to pressure its margins. Prices for those customized offerings fell from 21.6 yuan per kilogram in 2023 to 19.9 yuan last year, and dipped further to 19.3 yuan per kilogram in the first quarter of this year. The company cited competition and its desire to gain market share as key factors behind the price declines.

Strong customer retention

While such numbers don’t look too impressive, Juhui says it’s equally important to look at its customer retention. Of the 130,000 restaurants it currently serves, the annual customer repurchase rate has risen sharply from 54.2% in 2023 to 72.1% last year.

Juhui’s makes its customized products at an 84,900-square-meter factory in its hometown of Chongqing, while standardized products are made at a 33,000-square-meter factory. Actual customization takes place at a network of 30 centers across China with 100 R&D specialists and professional chefs, which Jiuhui says is the largest such network in the industry. It says that network functions as “on-the-ground R&D consultancies for our customers, providing free menu development support, co-creation of new recipes, and troubleshooting of operational challenges on site.”

One place where Juhui really shines is on its balance sheet. Its net assets nearly doubled from 333.4 million yuan in 2023 to 627.3 million yuan in the first quarter of this year, largely the result of buying out preferred shares from earlier investors that included CPE Investment and Matrix Partners China. That helped the company shrink its debt from 553.4 million yuan in 2023 to 157.3 million yuan in the first quarter of 2026, and left Gou and Wang with ownership of 80% of their company.

While many of its largest customers are growing, one challenge for Juhui could be that some of the largest chains are focusing their growth outside China. By comparison, chain restaurants in the top category of 10,000 outlets and more have kept their domestic store count relatively stable, according to the CCFA report.

An example is Haidilao, which spun off its overseas operations into a separately listed company in 2022. That operation now has 127 outlets in 14 countries, mostly in Southeast Asia. While Juhui may be able to serve those customers for their overseas operations, such companies could also let their offshore divisions look for suppliers that can produce locally and have a better understanding of local tastes.

On the whole, Juhui’s story offers a mixed packet for investors. On the one hand it’s in a market segment with big growth potential. But it’s far from clear that it can grow in sync with that market, as it races to stay ahead of the domestic competition.

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