Investor Appetite Fades as Xiao Noodles Falls 28% on Hong Kong Debut
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Shares of Chinese noodle restaurant operator Xiao Noodles fell sharply on their Hong Kong trading debut Friday, tumbling nearly 28% from their initial public offering price despite strong investor demand.
The stock closed at HK$5.08 ($0.65), down from its offer price of HK$7.04, after opening at HK$5. The slump came even as the IPO was oversubscribed 426 times by retail investors and five times by institutional buyers.
CMB International Capital Corp. Ltd., the sole sponsor of the IPO, helped the company raise net proceeds of approximately HK$617 million. Six cornerstone investors, including Hillhouse-backed HHLR Advisors Ltd., Hong Kong Shengying Investment Ltd., Zeta Fund and Hai Di Lao Holdings Pte. Ltd., contributed about $22 million for a combined 3.4% stake.
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- Xiao Noodles’ Hong Kong IPO debut saw shares fall nearly 28% from HK$7.04 to HK$5.08, despite being oversubscribed.
- The company raised about HK$617 million, planning to use 60% for opening 520–610 more stores; it currently operates 465 locations.
- Despite softening same-store sales, revenue grew at a 66.2% CAGR (2022-2024), and profit reached 60.7 million yuan in 2024.
- Xiao Noodles
- Xiao Noodles (小伙伴面馆), founded in 2014 in Guangzhou, specializes in affordable Chongqing-style noodles. In 2024, it was the largest Sichuan-Chongqing-style noodle chain and the fourth-largest Chinese noodle house by gross merchandise volume (GMV) in mainland China. Despite strong financial growth, its Hong Kong trading debut saw shares tumble nearly 28%, raising concerns about its expansion plans.
- CMB International Capital Corp. Ltd.
- CMB International Capital Corp. Ltd. served as the sole sponsor for the IPO of Xiao Noodles. They assisted the company in raising net proceeds of approximately HK$617 million.
- HHLR Advisors Ltd.
- HHLR Advisors Ltd. (高瓴智睿) is one of six cornerstone investors in Xiao Noodles' IPO. They contributed to the approximately $22 million raised by these investors, acquiring a combined 3.4% stake in the company. Hillhouse-backed, HHLR Advisors' investment occurred despite the noodle operator's shares falling sharply on their Hong Kong trading debut.
- Hong Kong Shengying Investment Ltd.
- Hong Kong Shengying Investment Ltd. was one of six cornerstone investors in the IPO of Xiao Noodles. They contributed approximately $22 million, acquiring a combined 3.4% stake in the Chinese noodle restaurant operator alongside other investors like HHLR Advisors and Zeta Fund.
- Zeta Fund
- Zeta Fund is one of six cornerstone investors in Xiao Noodles' initial public offering (IPO). They, along with other investors like HHLR Advisors Ltd. and Hai Di Lao Holdings Pte. Ltd., contributed approximately $22 million, securing a combined 3.4% stake in the Chinese noodle restaurant operator.
- Hai Di Lao Holdings Pte. Ltd.
- Hai Di Lao Holdings Pte. Ltd. was one of the cornerstone investors in Xiao Noodles' IPO. They contributed approximately $22 million, acquiring a combined 3.4% stake in the company along with several other cornerstone investors.
- Qingcong Capital
- Qingcong Capital is one of the financial backers of Xiao Noodles, a Chinese noodle restaurant operator. They participated in one of the seven funding rounds Xiao Noodles completed before its Hong Kong trading debut.
- Country Garden Venture Capital
- Country Garden Venture Capital is an investor in Xiao Noodles, a Chinese noodle restaurant operator. Prior to Xiao Noodles' Hong Kong trading debut, Country Garden Venture Capital participated in one of the seven funding rounds the company undertook to raise capital.
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