China’s Hefu-Noodle is planning to list its shares outside the country’s borders, according to an announcement released on Friday by Juewei Food, a Shanghai-listed stewed-snack producer whose wholly-owned subsidiary Shenzhen Wangju Investment controls 16.92% of the popular noodle restaurant chain.
Founded in 2012, Jiangsu-based Hefu-Noodle has ambitions to grow into a 100-year-old heritage restaurant brand and become China’s version of Mcdonald’s for noodles. Founder Li Xuelin has standardized and streamlined food production at the company’s “Central Kitchen,” a factory which can supply cooked meals in frozen packages to more than 1,000 brand outlets. This self-developed supply chain has differentiated Hefu-Noodle from other traditional Chinese restaurants, where meals are cooked by chefs in the in-store kitchens.
As of June 2021, the firm had set up 340 branches across more than 30 cities in China. Priced at around 50 yuan ($7.86) per bowl, the brand mainly targets white-collar consumers in tier-one and tier-two Chinese cities. Lifestyle publication The Beijinger reported that a typical Hefu outlet is designed similarly to a “traditional Chinese scholar’s study” with red lanterns, lotus-shaped lamps and large calligraphy, incorporating learning materials into foodies’ eating experience.
Since Hefu-Noodle completed a 30 million yuan Series A round of financing in August 2015, the company has so far secured six funding rounds and bagged investment totalling 1.645 billion yuan. In July 2021, Hefu closed a Series E financing round, raising 800 million yuan from investors including CMC Capital, Tencent, ZWC Partners and Longfor Capital, bringing its overall valuation to 7 billion yuan.
It is not yet clear which location will be the company’s IPO destination. Since July 2021, a cohort of Chinese IPOs to the U.S. have been aborted and Beijing has tightened restrictions for domestic companies that want to go public on overseas stock exchanges, citing national security concerns. The new rules will apply to Hong Kong as well, Shen Bing, the China Securities Regulatory Commission’s director-general of the international affairs department, said in an exclusive interview with CNBC on Friday.