Laoxiangji's Fifth IPO Attempt Fails in Five Years, Valuation Halved to About 8 Billion Yuan

The founder's daughter holds a 15% stake in the company.

By Jia Zicong | Edited by Gao Yan | Source: Yema Finance

After five failed IPO attempts in as many years, Laoxiangji—a popular Chinese fast-food chain—recently celebrated a family milestone.

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 for photos. The groom's identity has not yet been disclosed.

What gives this otherwise joyous family occasion a different dimension is Shu Wen's other identity: she is one of the actual holders of 92.02% of the voting rights in this leading中式 fast-food chain.

Just two months earlier, on July 8, Laoxiangji's Hong Kong IPO prospectus—filed in January 2026—expired after six months, marking the company's fifth failed attempt to go public in five years.

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

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 Laoxiangji, working her way up from entry-level positions and accounting roles to R&D Deputy Director and Deputy General Manager. On December 19, 2024, she was appointed Executive Director, primarily 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 training is in animation design. This arrangement raised questions when disclosed in earlier prospectuses.

Shu Wen's true capital-market significance lies in her shareholder status. According to the latest prospectus:

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

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

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, did not make the list.

Although retired from day-to-day management, Shu Congxuan remains the "soul" of Laoxiangji, actively maintaining a personal brand through short videos and variety shows. His down-to-earth persona—from tearing up employee salary-cut petitions to hosting a rural press conference for just RMB 200—has become deeply intertwined with the brand. He has over 1 million followers on Douyin alone, an intangible asset he leaves to the company.

This "one-family-decides" structure drew regulatory scrutiny during A-share listing reviews. The prospectus itself acknowledges that the family-dominated equity structure and lack of checks and balances are core concerns for capital markets.

With Shu Wen's wedding, the family baton has been passed one step further. Beyond the celebration, the real battle for the second generation remains in the capital markets, and Laoxiangji's IPO journey continues to draw attention.

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

Laoxiangji's long march toward capitalization began during the 2022 wave of Chinese restaurant IPOs.

In May of that year, the company filed its first prospectus with the Shanghai Stock Exchange's main board, with a market valuation of RMB 18.1 billion, making it a strong contender for the title of "first Chinese fast-food stock." However, in October, the CSRC issued 45 feedback items, scrutinizing everything from social insurance and housing fund contributions to food safety, historical capital increase irregularities, and past bribery cases involving the actual controller.

After a second filing in February 2023 under the full registration system, the company voluntarily withdrew in August of the same year, citing misalignment with its "strategic development and financing plans."

Subsequent attempts:

• January 2025: First Hong Kong filing, expired in July due to expired financial data
• July 2025: Second Hong Kong filing, also expired
• January 2026: Third Hong Kong filing, expired on July 8

Five attempts in five years. All unsuccessful.

The impact is most visible in valuation. In 2022, Laoxiangji was valued at approximately RMB 18.1 billion. By 2025, the Hurun Global Unicorn List pegged it at RMB 9 billion. In 2026, industry estimates place it at just RMB 8 billion—nearly halved in four years.

Why Can't It Get Listed?

1. Social Insurance and Housing Fund Gaps

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

| Period | Shortfall (RMB) | |--------|----------------| | 2022 | ~10.7 million | | 2023 | ~21.4 million | | 2024 | ~36.3 million | | 2025 (8 months) | ~31.9 million | | Total | Over 100 million |

According to legal advisors, potential fines for insufficient social insurance contributions alone could exceed RMB 244 million. This was a key focus of the CSRC's initial 45 questions.

2. Low Gross Margin

In 2024, Laoxiangji's gross margin was just 22.8%. For comparison:

• Xiaocaiyuan: Over 65%
• Green Tea Group: Nearly 69%
• Haidilao: Consistently above 56%

The root cause is Laoxiangji's heavy asset model: it operates three chicken farms, two central kitchens, and eight distribution centers, integrating breeding and processing into its financial statements. Raw material and consumable costs now account for over 40% of revenue.

Fu Yifu, a researcher at Suning Bank, noted: "Self-breeding chickens, building central kitchens, and distribution systems require massive upfront investment with high fixed costs. As stores expand, marginal profits are easily eroded by operational and depreciation costs, making it difficult for the single-store model to scale profitability like asset-light models."

3. Slowing Growth and Regional Concentration

Revenue growth has slowed sharply:

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

Store distribution remains heavily concentrated in East China, with Jiangsu, Zhejiang, Shanghai, and Anhui accounting for over 80% of revenue. Consumers in Guangdong and Sichuan provinces might as well be asking, "Where's the chicken?"

Zhu Danpeng, a food industry analyst, commented: "Laoxiangji's IPO journey has been fraught with setbacks. Overall, it has not yet become a truly national brand, with shortcomings in brand effect, scale effect, fan effect, and supply chain completeness."

4. External Capital Exits

In January 2024, early investors Maixing Investment and GF Qianhe fully exited, with Laoxiangji 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, the only external shareholder is Jiahua Capital, holding 4.98%.

Amid these controversies, the Shu family's succession drama is unfolding, and the capital market's tough questions now fall on the second generation.

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 Province, and used RMB 1,800—money originally set aside for his wedding—to start a chicken farm. In 2003, seeing an opportunity in Chinese fast food, he opened the first "Feixi Old Hen" restaurant. In 2012, following advice, he rebranded the chain as "Laoxiangji" 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. At 37, the second generation stepped into the spotlight, inheriting the heavy burden of an IPO "sprint."

Shu Xiaolong is no stranger to the business. After earning a Bachelor's degree in Business Administration in the U.S. in 2012, he returned and started as an entry-level restaurant employee, working his way up through 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."

Key Initiatives

Digitalization & Governance Laoxiangji has built a comprehensive data system covering breeding monitoring, central kitchen scheduling, cold-chain logistics, POS systems, and membership management. The company has also established a 7-member board of directors, three independent non-executive directors, and three committees (audit, compensation, nomination)—a structure aligned with Hong Kong listing requirements.

Healthification (2026 Focus) Shu Xiaolong has driven nutritional testing for 191 products, covering calories, protein, fat, carbohydrates, and sodium, with results displayed on price tags. Laoxiangji claims to be the only pilot enterprise for nutritional labeling in Chinese fast food. In January 2026, the company signed a long-term partnership with the General Administration of Sport of China to bring professional sports dietary standards to its stores.

Globalization In April 2026, Laoxiangji opened its first overseas store at the IOI Mall in Kuala Lumpur, Malaysia. The menu was adapted to local dietary restrictions, and the digital management model was replicated.

These moves add narrative appeal to the fundamentals. However, when it comes to the capital market's core concern—profit quality—the new measures appear more like "painting over old foundations."

The Franchise Expansion Dilemma

Shu Xiaolong has set a goal of "10,000 stores in ten years, with franchising as the main driver." Franchised stores have surged from 118 in 2022 to 733 by August 2025, growing from 10.5% to 44.2% of total stores. Franchise revenue has grown at a compound annual rate of over 100% in three years.

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 from company-owned to franchised stores has smoothed growth figures but has not fundamentally solved the challenges of per-store profitability and quality control.

Quality Control Concerns

Laoxiangji was once an industry benchmark for transparency. Since 2021, the company has published monthly self-inspection reports, voluntarily disclosing issues such as expired ingredients, unclean equipment, and operational irregularities, along with corrective actions. However, this proactive disclosure has not fully translated into consistent quality across all outlets.

On the Black Cat投诉 platform, as of September 17, 2026, there were over 1,400 complaints related to Laoxiangji, with recurring issues including:

• Foreign objects in food
• Utensil hygiene
• Ingredient freshness

Industry Context

Laoxiangji's struggles are not unique. In the same sector:

• Country Kitchen (Xiangcun Ji) failed three times to list in Hong Kong
• Laoniangjiu failed in both A-share main board and Beijing Stock Exchange attempts over four years

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

Conclusion: The Question Remains

As the wedding of the founder's daughter concludes, the second generation—Shu Wen and Shu Xiaolong—must answer not just "When can we go public?" but also: Can a company with 92% of its equity held by family members operate in a compliant, clean, and sustainably profitable manner as it scales?

The halved valuation is the market's most direct answer. 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 Laoxiangji? What do you think? Feel free to share in the comments.

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