Founder's Daughter Marries as Laoxiangji Fails Fifth IPO Attempt in Five Years

By Jia Zicong | Editor: Gao Yan | Source: Yema Finance

After five failed IPO attempts in as many years, Lao Xiang Ji—one of China's most recognizable中式 fast-food chains—recently had cause for celebration.

On September 17, a netizen shared a video of the wedding of Shu Wen, daughter of founder Shu Congxuan and an executive director of the company. The bride, dressed in a traditional red Xiuhua gown, was seen arm-in-arm with her father. The groom sat beside his mother-in-law, Zhang Qiong, and brother-in-law, Shu Xiaolong. The groom's identity has not yet been disclosed.

But the wedding carried a deeper significance: Shu Wen is one of the actual holders of 92.02% of the company's voting rights.

Just two months earlier, Lao Xiang Ji's Hong Kong IPO prospectus, filed in January 2026, lapsed on July 8 after six months. This marked the company's fifth failed attempt to go public in five years.

How did a beloved national fast-food chain fail to make it to the capital markets table? More pointedly, its valuation has quietly been cut in half.

01 A Wedding That Reveals a Classic Family Business

Shu Wen, 33, is the daughter of founder Shu Congxuan and Zhang Qiong, and the younger sister of current chairman Shu Xiaolong. After graduating in 2013 with a degree in Animation Design from Liaoning University of Science and Technology, she joined Lao Xiang Ji, working her way up from entry-level roles and accounting to R&D deputy director and deputy general manager. On December 19, 2024, she was appointed executive director, responsible for overseeing the group's financial operations, management, and regulatory compliance.

Notably, this executive director with financial oversight authority does not have a finance background—her degree is in animation design. This arrangement raised questions when first disclosed in the company's prospectus.

Shu Wen's true capital-market identity is as a shareholder. According to the latest prospectus:

• Shu Xiaolong (Chairman & CEO) holds 70.78% via Constantly Soar Ltd
• Shu Wen holds 15.02% via Jump Spark Ltd
• Dong Xue (Shu Xiaolong's wife) holds 6.22% via Favourable Impression Ltd

Together, the three control 92.02% of voting rights. In other words, over 90% of the voting power in this company—with annual revenue exceeding RMB 4 billion—is tightly held within the founder's immediate family circle. Founder Shu Congxuan himself holds no direct shares.

Shu Xiaolong and Dong Xue have appeared on the Hurun Rich List for consecutive years, with a combined wealth of RMB 5.5 billion in 2022 and 2023. Shu Congxuan, having transferred all his shares, is not listed.

Although retired from day-to-day management, Shu Congxuan remains the company's "soul figure," active on short-video platforms and variety shows. His "Zen boss" personal brand is deeply tied to the company. After going viral for tearing up employee pay-cut petitions and holding a rural press conference for just RMB 200, he continues to engage the public with down-to-earth content—tasting food, sharing stories, and even performing stand-up comedy. He has over 1 million followers on Douyin alone.

This family-dominated structure drew regulatory scrutiny during A-share review. The prospectus itself acknowledges that the lack of checks and balances in decision-making is a core concern for capital markets.

Now, with Shu Wen's wedding, the family baton has been passed another step forward. Beyond the celebration, the real battle for the second generation lies in the capital markets.

02 Five Years, Five Attempts: Valuation Drops from RMB 18.1 Billion to RMB 8 Billion

Lao Xiang Ji's capital market marathon began in 2022, during a wave of Chinese restaurant IPOs.

In May of that year, the company first filed a prospectus with the Shanghai Stock Exchange's main board, with a market valuation of RMB 18.1 billion. It was seen as a strong contender for the title of "First Chinese Fast-Food Stock." But in October, the CSRC issued 45 feedback items, covering issues from social insurance and housing fund compliance to food safety, historical capital increase irregularities, and a past bribery case involving the actual controller.

After a second filing in February 2023 under the full registration system, the company voluntarily withdrew in August, citing a mismatch with its "strategic development and financing plan timeline."

In January 2025, it filed again in Hong Kong, but the filing lapsed in July due to expired financial data. A second Hong Kong filing in July also lapsed. A third filing in January 2026 lapsed on July 8. Five years, five attempts, all unsuccessful.

The most immediate impact has been on valuation:

• 2022 (A-share filing): ~RMB 18.1 billion
• 2025 (Hurun Global Unicorn List): ~RMB 9 billion
• 2026 (institutional estimates): ~RMB 8 billion

Nearly halved in four years.

Why does the IPO keep failing? The prospectus repeatedly reveals persistent issues:

Social Insurance and Housing Fund Gaps

From 2022 to the first eight months of 2025, the shortfall in social insurance and housing fund contributions was approximately:

• 2022: RMB 10.7 million
• 2023: RMB 21.4 million
• 2024: RMB 36.3 million
• 2025 (8 months): RMB 31.9 million

Total: over RMB 100 million. Legal advisors estimate potential fines for non-compliance could exceed RMB 244 million.

Low Gross Margins

In 2024, Lao Xiang Ji's gross margin was just 22.8%. For comparison:

• Xiao Cai Yuan: >65%
• Green Tea Group: ~69%
• Haidilao (heavy asset model): >56%

The root cause is the company's heavy, vertically integrated model—owning three chicken farms, two central kitchens, and eight distribution centers. Raw material and consumable costs have risen to over 40% of revenue.

Slowing Growth and Regional Concentration

Revenue growth has slowed sharply:

• 2022: 58.38%
• 2024: 11.27%
• 2025 (8 months): 10.9%

Stores remain heavily concentrated in East China (Jiangsu, Zhejiang, Shanghai, Anhui), accounting for over 80% of revenue. Consumers in Guangdong and Sichuan provinces often say they've "never heard of" the brand.

External Investors Exit

In January 2024, early institutional investors Maixing Investment and Guangfa Qianhe fully exited, with Lao Xiang Ji repurchasing their shares for approximately RMB 153 million. These two Pre-IPO investors, who had helped double the company's valuation, chose to cash out. Today, only Jia Hua Capital remains as an external shareholder, holding 4.98%.

03 The Second Generation Takes Over: Can "New Measures" Solve Old Problems?

In 1982, Shu Congxuan, a military veteran, returned to his hometown in Feixi County, Hefei, Anhui, and used RMB 1,800—money originally set aside for his wedding—to start a chicken farm. In 2003, he opened the first "Feixi Old Hen" restaurant, seizing the opportunity in Chinese fast food. In 2012, following advice, he rebranded the chain as "Lao Xiang Ji" and expanded from Anhui into Jiangsu, Hubei, and Shanghai.

In November 2023, Shu Xiaolong succeeded his father as chairman. In July 2024, Shu Congxuan officially announced his retirement. The 37-year-old second-generation leader stepped into the spotlight, inheriting the heavy burden of taking the company public.

Shu Xiaolong is no stranger to the business. After earning a Bachelor's in Business Administration in the U.S. in 2012, he returned and started as a junior employee in a restaurant, working his way up to store manager, regional director, general manager, and vice chairman. Since taking over, he has led a series of initiatives summarized as "digitalization, healthification, globalization, and governance standardization."

Digitalization and Governance

Lao Xiang Ji has built a comprehensive data system covering breeding monitoring, central kitchen scheduling, cold chain logistics, store POS, and membership management. The board now includes 7 directors, 3 independent non-executive directors, and audit, compensation, and nomination committees—a structure aligned with Hong Kong listing requirements.

Healthification (2026 Focus)

Shu Xiaolong has pushed for third-party nutritional testing (calories, protein, fat, carbs, sodium) on 191 products, with results displayed on price tags. The company claims to be the only pilot enterprise for nutritional labeling in Chinese fast food. In January 2026, it signed a long-term partnership with the General Administration of Sport of China to bring professional sports nutrition standards to its stores.

Globalization

In April 2026, Lao Xiang Ji opened its first overseas store in Kuala Lumpur, Malaysia (IOI Mall). The menu was adapted for local dietary restrictions, and the domestic digital management model was replicated.

These moves add narrative to the fundamentals. But when it comes to the core issue capital markets care about—profit quality—the new measures feel more like "painting over old foundations."

Franchise Expansion: The Growth Story

Shu Xiaolong has set a goal of "10,000 stores in ten years, with franchising as the main driver." Franchised stores have surged:

• 2022: 118 stores (10.5% of total)
• August 2025: 733 stores (44.2% of total)

Franchise revenue has grown at a three-year compound rate of over 100%. However, the prospectus reveals that a significant portion of these franchised stores were converted from company-owned stores. In 2024 alone, 146 company-owned stores were converted to franchises.

This shift has smoothed growth figures but has not fundamentally solved the challenges of per-store profitability and quality control.

Quality Control Concerns

Lao Xiang Ji was once an industry benchmark for transparency. Since 2021, it has published monthly self-inspection reports, voluntarily disclosing issues such as expired ingredients, unclean equipment, and operational non-compliance, along with corrective actions. However, this transparency has not fully translated into consistent quality across all stores.

As of September 17, 2026, the Black Cat投诉 platform shows over 1,400 complaints related to Lao Xiang Ji, with foreign objects in food, utensil hygiene, and ingredient freshness being the most common issues.

A Broader Industry Challenge

Lao Xiang Ji's struggles are not unique. In the same sector:

• Country Kitchen (Xiangcun Ji) failed three times to list in Hong Kong
• Laoniangjiu (Elderly Uncle) abandoned its A-share main board and Beijing Stock Exchange listing attempts after four years

While brands like Mixue Bingcheng, Guming, Xiao Cai Yuan, and Green Tea Group have successfully gone public, the Chinese fast-food segment has yet to produce a true listed leader. The capital market's pricing logic for restaurant companies appears to have shifted—from a scale premium (chasing store count) to a profit quality premium (valuing profitability, compliance governance, and supply chain capability).

Conclusion: The Question That Remains

With Shu Wen's wedding now over, the second generation—Shu Wen and Shu Xiaolong—must answer not just "When will we go public?" but also: Can this company, with 92% of its equity held by family members, make money in a compliant, clean, and sustainable way as it scales?

The halved valuation is the market's most direct answer to the current state of affairs. But whether this "chicken soup," brewed for 44 years, can be served to the capital markets for a sixth time remains an open question.

Have you eaten at Lao Xiang Ji? What do you think? Feel free to share in the comments.

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