Xiao Fei Yang set to be China's first restaurant to list in HK
China's popular Xiao Fei Yang hot pot restaurant is hoping its Hong Kong listing plan will be a recipe for success as it moves to cash in on locals' huge appetite for the traditional winter dish.
The Inner Mongolia-based company - which specialises in lamb hot pot - said an initial public offering had been on the boil for the past six months.
'Hong Kong people's eating habits are similar to people in China,' a company spokesman said. 'Just like it has taken off explosively in the mainland, our hot pot should do likewise in Hong Kong.'
To whet the appetite of Hongkongers before enticing them to the stock, Xiao Fei Yang - which means Little Fat Lamb in Chinese - will later this month open the first of two planned restaurants in the city.
The company already has 669 franchises across the mainland - in Shanghai, Beijing, Shenzhen and Tianjin - as well as a Los Angeles outlet and one in Taiwan.
The details of the planned initial public offering have not been drawn up yet. The listing would be used to break into the international market and raise funds for expansion plans, the spokesman said.
The company plans to invest 200 to 300 million yuan to build a breeding ground and meat processing facilities for lamb in the next two years.
If the listing succeeds, Xiao Fei Yang could be a draw for many of China's food and beverage firms to follow, given the rapid growth of the sector, which last year expanded 11.6 per cent.
Sales at China's top 100 restaurants grew 31.3 per cent to 52.8 billion yuan last year, according to official numbers.
Of that figure, 25 per cent are restaurants which specialise in hotpot and have combined sales of 13.58 billion yuan.
The fast growth reflects increasing competition in the hotpot business, dominated by chain store operators such as Xiao Wei Yang, also from Inner Mongolia, and Chongqing Little Swan.
Founded in 1999, Xiao Fei Yang is forecasting sales of about 4.2 billion yuan this year, up from the 3.53 billion yuan it chalked up last year. In the first four months of this year, sales totalled 1.35 billion yuan.