Chinese seafood processor and convenience seafood retailer Xianmeilai Food Co. seeks IPO again.
This is the third time Xianmeilai Food has applied for an IPO on the Shanghai Stock Exchange, after unsuccessful attempts in 2021 and 2022. The private company aims to raise CNY 600 million (US$96 million, EUR84 million) at. to expand its distribution and logistics network as the company relies heavily on growing Chinese demand for ready meals.
Founded in 2006, Xianmeilai is based in the coastal city of Beihai in the southern province of Guangxi. The company primarily sells prepared vegetable products, but also has an extensive seafood business, including retail packaged breaded cod and shrimp. The company, which claims to be the first Chinese “ready-to-eat” company to list on the stock market, delayed its previous IPO attempts after disagreements over its sourcing disclosures, but is once again trying to capitalize on an issue puzzling investors is becoming increasingly popular.
In a report shared with SeafoodSource, market research group Mintel forecast Chinese demand for ready meals will grow 9.9 percent annually through 2026, with the market being worth an estimated CNY346.5 billion ($55.4 billion, 48.5 percent). billion euros) will have. China’s finished goods market grew 9.6 percent in 2021 to a total sales value of CNY216.4 billion (US$34.6 billion).
Xianmeilai’s revenue fell from CNY911 million (US$145 million, EUR127.5 million) in 2019 to CNY849 million (US$135.8 million, EUR118.8 million) in 2020, before she increased again to CNY915 million (US$146.4 million, EUR128 million) in 2021. The company posted a profit of CNY89.7 million (US$14.3 million, 12.5 million EUR), in 2020 a profit of 90.2 million CNY (14.4 million USD, 12.6 million EUR) and 81.1 million CNY (12.9 million USD, 11.3 million euros). in 2021. In 2022, profits increased slightly to CNY85 million (US$11.9 million, EUR11.1 million), still below pre-Corona totals.
Xianmelai’s prospects are boosted by the fact that one of its key customers, restaurant operator Haidilao International Holdings, has returned to profitability in 2022, according to a recent circular to investors. Best known for its hotpot casual dining restaurant chain, the company is forecasting a profit of CNY1.3 billion (US$182 million) for 2022, compared with a loss of 4.1 billion CNY (US$574 million, €533 million) in 2021. In 2022, the company’s revenue fell 15.8 percent to CNY 34 billion (US$4.76 billion, 4.42 billion euros).
However, Xianmeilai will face off against larger, more established players that have also switched to ready meals or have doubled their exposure, such as Guolian Aquatic and Fujian Anjoy Food Co., as well as Sanquan Foods and Zhengzhou Synear Food Co., both of which have large scales in of pork processing and are now entering the frozen seafood snack market.
On condition of anonymity, a Qingdao seafood executive close to the company questioned Xianmeilai’s ability to increase its profits …
Photo courtesy of Xianmelai Food Co.
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