BRIEF: Xiao Noodles comes up limp in Hong Kong trading debut
Shares of noodle chain operator Guangzhou Xiao Noodles Catering Co. Ltd. (2408.HK) opened down 29% in their Hong Kong trading debut on Friday, and remained limp during the morning session to close down 27% at HK$5.12 by the midday break.
The company sold 97.37 million shares for HK$7.04 apiece, representing the top of their range. The public portion of the offering for local Hong Kong investors was 425 times oversubscribed, while the international tranche was 4 times oversubscribed.
Xiao Noodle’s revenue grew 44% year-on-year to 1.15 billion yuan ($163 million) in 2024, while its net profit rose 32% to 60.7 million yuan. In the first six months of this year, its revenue grew another 33.8% to 700 million yuan, while its net profit surged 96% to 41.83 million yuan.
The company plans to use 60% of its HK$617 million ($79 million) in IPO proceeds to expand its restaurant network. Another 10% will go to brand building and enhancing customer loyalty, 10% will be used for investments in upstream food processing industries, and the remaining 10% will be used for general working capital.
By Lau Chi Hang
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