鍋圈開啟認購，你看好嗎？
New stock offering | Guoquan will begin offering shares today, and is expected to be listed on November 2.
Futu News on October 20th,$GUOQUAN (02517.HK)$Announced that it will conduct an IPO from October 20th to October 26th, 2023, planning to issue 68.8028 million shares, including 6.8808 million shares for public offering and 61.922 million shares for international offering, at an issue price of HK$5.98 per share with a board lot of 400 shares, expected to be listed on November 2.
Source: Disclosed by
Company Overview
Guoquan is a leading and rapidly growing brand of home dining meal products in China, providing instant, ready-to-eat, ready-to-cook, and ready-to-eat ingredients, with a focus on home hotpot and barbecue products. The company uses the national network of retail stores to offer a variety of home dining meal products under the Guoquan Food Exchange brand, serving different dining scenarios. Home dining meal products include instant foods, ready-to-eat foods, ready-to-cook foods, and ready-to-eat ingredients.
According to the prospectus, Guoquan is a leading one-stop brand of home dining meal products in China. Based on Fraser Sullivan's data, it ranked first among all retailers in China in 2022 by retail sales of home dining meal products, and was the largest home hotpot and barbecue brand in China in terms of retail sales in 2022.
According to Fraser Sullivan's data, as of December 31, 2022, Guoquan has established the largest retail store network in China that provides one-stop home dining meal products. In 2022, the company accumulated orders exceeding one billion units. The retail store network in China increased from 9,221 as of December 31, 2022, to 9,844 as of April 30, 2023.
Financial Situation
In terms of financial situation, Guoquan's total revenue increased by 33.5% from RMB 2.965 billion in 2020 to RMB 3.958 billion in 2021, and further increased by 81.25% to RMB 7.174 billion in 2022. The company achieved profitability in 2022, with a net income of RMB 0.241 billion, and continued to record a net income of RMB 0.12 billion for the four months ended April 30, 2023.
Source: EDINET
Guoquan's revenue mainly comes from selling home dining meal products to franchisees, who operate franchise stores under the company's brand and sell the company's products to end consumers. Therefore, the company's revenue is mainly driven by the scale of its store network, primarily composed of franchise stores, and future revenue growth depends on its ability to open new stores and expand the coverage of the store network.
In 2020, 2021, and 2022, as well as for the four months ended April 30, 2022, and 2023, Guoquan's gross margin was 11.1%, 9.0%, 17.4%, 13.8%, and 21.1% respectively. Gross profit increased by 7.9% from RMB 0.329 billion in 2020 to RMB 0.355 billion in 2021, and further increased by 251.5% to RMB 1.249 billion in 2022.
As of 2020, December 31, 2021, and December 31, 2022, as well as April 30, 2023, Guoquan's store network includes 4,296, 6,864, 9,216, and 9,838 franchise stores, and 4, 4, 5, and 6 self-operated stores respectively.
Industry Overview
By retail sales, the market size of the home dining market in China increased from RMB 3,248.2 billion in 2018 to RMB 5,615.6 billion in 2022, with a compound annual growth rate of 14.7%.
The market size of the home dining food product market in China increased from RMB 147.9 billion in 2018 to RMB 367.3 billion in 2022, with a compound annual growth rate of 25.5%. Due to consumers' increasing preference for convenient and healthy dining options without the need for complex cooking skills, the market size is expected to reach RMB 940 billion by 2027, with a compound annual growth rate of 20.7% from 2022.
Among all retailers in China, the top five retailers accounted for 11.1% of the market share in terms of retail sales of home dining food products in 2022. In 2022, in terms of retail sales of home dining food products, Guoquan is the largest retailer of home dining food products among all retailers in China, accounting for 3.0% of the market share.
Furthermore, according to Frost & Sullivan data, in terms of retail sales of home hotpot and barbecue products, Guoquan was the largest supplier of home hotpot and barbecue products among all suppliers in China in 2022, holding a 12.7% market share.
Cornerstone Investors
Regarding cornerstone investors, multiple cornerstone investors have agreed to subscribe for approximately 37.0028 million shares at the issuance price (assuming the over-allotment option is not exercised). Cornerstone investors include:$Jiangsu Hengshun Vinegar-Industry (600305.SH)$Xinxin (Hong Kong) Limited, Jinding Capital Management (Shenzhen) Limited (a wholly-owned subsidiary of Muyuan Industrial Group Limited), COFCO Capital Fund.
Use of Funds
In terms of the use of funds, Guoquan is expected to have a net amount of approximately 0.3565 billion Hong Kong dollars (assuming that the excess rights issue is not exercised). According to the prospectus, the company plans to use the net proceeds from the sale of shares for the following purposes: approximately 40.0% of the net proceeds will be used to enhance supply chain capabilities through capacity and efficiency improvements; approximately 40.0% of the net proceeds will be used to open and operate self-operated stores; approximately 10.0% of the net proceeds will be used to establish a product research and development center and upgrade and purchase related equipment; approximately 10.0% of the net proceeds will be used as operating funds and for general corporate purposes.
Edited by / Danial
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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