According to the disclosure on July 16th by HKEx, Little Green Garden International Holdings Limited (referred to as 'Little Green Garden') submitted an IPO application to the main board of HKEx, with Huatai International and UBS Group as its joint sponsors. It is reported that the company had submitted an IPO application to HKEx on January 16th.

As disclosed in the previous prospectus, Little Green Garden is one of China's well-known mass-market Chinese-style catering direct-operated chain restaurants, ranking among the top in terms of business scale and growth rate. According to Frost & Sullivan, the mass-market Chinese-style catering market is a sub-segment of the Chinese cuisine market with an average customer spend of less than RMB 100. As of the final feasible date, Little Green Garden has 623 operating direct-operated stores covering 135 cities or counties in 13 provinces in China. Currently, most of its main stores are located in the eastern region of China, and the store network has been expanded to other regions in China.

According to Frost & Sullivan, in terms of store revenue in 2023, "Little Green Garden" ranked first among all brands in China's mass-market Chinese-style catering market, with an average customer spend ranging from RMB 50 to RMB 100 and a market share of 0.2%. By revenue, the mass-market Chinese-style catering market with an average customer spend ranging from RMB 50 to RMB 100 is estimated to reach RMB 2,252.9 billion in 2023, accounting for approximately 55.2% of the overall Chinese cuisine market.

In terms of finance, the company’s revenue in 2021, 2022, and 2023 were RMB 2.646 billion, RMB 3.213 billion, and RMB 4.549 billion, respectively. During the same period, the company’s annual profits were RMB 0.227 billion, RMB 0.238 billion, and RMB 0.532 billion, respectively.

As of the four months ended April 30th, 2024, Little Green Garden recorded stable expansion and growth in store network, revenue and net income compared to the same period in 2023, with a net profit margin remaining relatively stable at 11.5%. As of the four months ended April 30th, 2024, the company opened 62 new stores, with revenue and net income of approximately RMB 1.68 billion and RMB 0.1939 billion, respectively.

As of the four months ended April 30th, 2024, same-store sales and store-level operating profit margins of "Little Green Garden" stores decreased, mainly due to (i) the base effect resulting from a rapid increase in consumer spending in China's catering market in the first few months of 2023 as the epidemic gradually disappeared, consistent with consumer trends in other consumption areas, (ii) adjustments to dish prices to cater to consumer preferences, which reflects the long-term commitment to bring customers a high-quality and cost-effective experience, and (iii) as of April 30th, 2024, most of the new "Little Green Garden" stores opened during the four months ended April 30th, 2024 are still in their ramp-up phase.

The prospectus noted that the fierce competition in China's catering industry may hinder Little Green Garden's ability to improve or maintain its revenue and profitability. The competition in the Chinese catering industry is highly competitive in terms of food quality and consistency, taste, price, atmosphere, service, location, quality ingredients supply and employees. According to Frost & Sullivan, the mass-market Chinese-style catering market is highly fragmented and its participants face fierce competition. In 2023, the market size of the mass-market Chinese-style catering market was RMB 3,618.7 billion by revenue, and the revenue of each of the top five brands in the Chinese mass-market Chinese-style catering market only ranged from RMB 2 billion to RMB 4.5 billion. Little Green Garden's stores across the country face fierce competition from different stores in various sub-segment markets, including local and regional/international chain stores. The company's competitors also provide dine-in and delivery services. Several competitors have a long history of operation, stronger financial, marketing, talent and other resources than the company, and many of them have long been operating in the markets where Little Green Garden has stores or plans to open new ones. In addition, other companies may develop new stores with similar business concepts and targeting the same customer groups, which may intensify competition.

If Little Green Garden fails to compete with other restaurants in the market, its ability to improve or maintain its revenue and profitability may be hindered, resulting in loss of market share, which may have a significant adverse effect on its business, financial condition, operating performance or cash flow. Little Green Garden may also need to improve or enhance its store network elements and develop its concept to compete with new trendy restaurants styles or concepts that may emerge from time to time. Little Green Garden indicated in the prospectus that it could not guarantee that such improvements would be successfully implemented or that such improvements would be beneficial to the company as expected, or that it would not be beneficial to the company at all.