Qiyunshan Food's Second Attempt to List on the Hong Kong Stock Exchange: Penalized Twice for Food Safety, with Over 80% of Revenue from a Single Product

On March 13, the Hong Kong Exchanges and Clearing (HKEX) disclosure website for listed companies once again posted the listing application documents of Jiangxi Qiyunshan Food Co., Ltd. (hereinafter “Qiyunshan Food”). This is the company’s second attempt, after its first filing became invalid in June 2025 for the first time, roughly nine months later—an onslaught from a company known as the “No. 1 brand of Chinese nantsang-jujube cake from the south.”

Source: Qiyunshan Food

Qiyunshan Food is an enterprise focusing on the research, development, production, and sales of leisure foods in the nantsang-jujube category. The company is headquartered in Chongyi County, Jiangxi Province, which is reputed as “China’s nantsang-jujube township.” According to the ZhiSuo Consultancy report cited in its prospectus, based on retail sales in 2024, Qiyunshan Food held a 32.4% share of China’s nantsang-jujube food market, firmly ranking first in the industry. However, beneath this impressive title as the champion in its niche segment, a number of issues have also surfaced as the prospectus was disclosed—overdependence on a single product, high customer concentration, a prior “red light” on food safety, insufficient employee social insurance contributions, and large cash dividends before listing—adding many uncertainties to its path toward an HK stock listing.

A major customer’s orders fell; last year’s performance “turned sharply around”

Qiyunshan Food’s financial performance shows a roller-coaster trajectory. The prospectus shows that from 2023 to 2025, the company’s total revenue was RMB 246 million, RMB 339 million, and RMB 313 million, respectively. Among them, in fiscal year 2024, revenue increased sharply by 37.5% year over year, mainly driven by the expansion of its distribution network and growth in demand from its core customers. In the same period, net profit was RMB 23.705 million, RMB 53.199 million, and RMB 48.925 million, respectively, with the year-over-year growth rate of net profit in 2024 reaching as high as 124.5%.

However, the high-growth momentum came to an abrupt halt in fiscal year 2025. In that year, the company’s revenue fell back to RMB 314 million, down 7.4% year over year, and net profit also declined 8% year over year to RMB 48.9 million.

The company explained that the decline in performance was mainly attributable to two factors: first, changes in the product mix and supply led to a reduction in sales orders from its largest customer, “Customer F”; second, the timing of the Chinese New Year holiday affected the sales rhythm.

More importantly, the company’s cash flow situation deteriorated sharply. During the reporting period, the net cash generated from operating activities was RMB 9.114 million, RMB 106 million, and RMB 1.841 million, respectively. In fiscal year 2025, cash flow dropped by 98.3% compared with 2024. The prospectus disclosed that this was mainly due to a decrease in customers’ advance payment amounts and an increase in inventories. At the same time, in 2025 the company declared dividends of RMB 20.30 million, further intensifying its cash flow pressure.

Concentrated product structure; single customer channel

Sales headcount is comparable to production staff

The most significant risk facing Qiyunshan Food is that its business is deeply dependent on a single product category and a small number of major customers.

First is the company’s highly concentrated product structure. According to the prospectus, Qiyunshan Food’s core products are only nantsang-jujube cake and nantsang-jujube kernels. In fiscal years 2023 to 2025, the income contributed by these two nantsang-jujube products has continuously accounted for more than 90% of total revenue. Among them, the revenue share of nantsang-jujube cake alone was as high as 84.66%, 86.69%, and 84.76% in 2023, 2024, and 2025, respectively. This means the company’s fate is almost deeply tied to the market performance of nantsang-jujube cake.

The prospectus also admits that if consumers’ preferences change, raw material supply fluctuates, or related negative public opinion emerges, it will directly affect the company’s operating performance. By comparison, Liuliumei, another fruit-dried snack enterprise, has expanded its product structure into multiple categories such as preserved plums, yellow plums, and plum jelly, resulting in a more balanced revenue mix.

Second, the risk of concentrated customers and channels is highlighted as well, because the company’s sales rely heavily on its offline distributor network. According to the prospectus, during the reporting period, revenue generated through offline distributors accounted for 85%, 88.4%, and 86.3% of total revenue, respectively. By the end of 2025, the company had 271 distributors, of which 230 were offline distributors. This model makes the company’s revenue highly susceptible to the purchasing behavior of distributors.

More prominently, the company is dependent on major customers. The prospectus discloses that after a company coded as “Customer F” started business with Qiyunshan Food in September 2023, it quickly became the company’s largest customer in 2024, contributing revenue of RMB 77.995 million, representing 23% of total revenue that year. Industry speculation suggests that “Customer F” is very likely the value retail snack brand “Mingming Henmang,” which has expanded rapidly in recent years. However, in 2025, the customer’s order volume was drastically reduced, with revenue falling to RMB 40.195 million and its share dropping to 12.8%. It is this change that directly led to the company’s revenue decline in 2025.

During the reporting period, the revenue share of the company’s top five customers also rose from 26.5% in 2023 to as high as 38.8% in 2024, and remained as high as 33.7% in 2025. To retain major customers, the company even took measures such as extending the credit period, which directly led to an increase in trade receivables, and is also one of the reasons for the worsening cash flow.

With product concentration combined with customer concentration, Qiyunshan Food—although a food manufacturing company—relies heavily on sales work. This can also be seen in the distribution of employees by department: Qiyunshan Food has 678 employees in its production department, while the sales department has already reached 616 employees, nearly matching the number of production employees, accounting for 43.66% of the total number of employees.

Punished twice for food safety

Withheld RMB 4.2 million in employees’ social insurance

Although Qiyunshan Food’s flagship product, nantsang-jujube cake, has held “Green Food” certification for 29 consecutive years since 1997, and has obtained the qualification of a nationally protected product with a geographical indication, its food safety record is not perfect.

The prospectus discloses that the company’s products were penalized twice because they failed to meet the requirements of the “Food Safety National Standard—Preserved Fruits” in mold testing. The market regulatory authorities imposed fines and confiscated the non-compliant products, with the total penalty and confiscation amount exceeding RMB 120,000. The company’s explanation is that the production area had insufficient humidity control, and it said it had made rectifications. In the food industry, safety is a lifeline; such penalty records are undoubtedly a focus of attention for investors and regulatory bodies.

In terms of corporate governance and employee rights, Qiyunshan Food also has certain controversial points.

First is that the employee structure is special, with insufficient social insurance contributions. As of December 31, 2025, the company had a total of 1,411 employees, including as many as 897 part-time employees, accounting for as high as 63.57%.

In addition, during the reporting period, the company had not fully paid social insurance and housing provident fund for some employees. It is estimated that the unpaid amounts in fiscal years 2023 to 2025 were approximately RMB 3.10 million, RMB 5.10 million, and RMB 4.20 million, respectively.

But Qiyunshan Food seems not to be too concerned. In its prospectus, the company stated, “Our legal counsel believes that we face relatively low risk of concentrated debt recovery by relevant authorities and major administrative penalties.”

In terms of production capacity, the company’s current capacity utilization is not saturated. In 2025, the capacity utilization rate for its core product, nantsang-jujube cake, was 79.6%, and the capacity utilization rate for nantsang-jujube kernels was 82.3%. For this IPO, the company plans to use the proceeds to enhance production capacity, conduct product R&D, conduct online marketing, and replenish cash flow. Among them, it plans to increase the total production capacity of nantsang-jujube food by 45.5% to 16,000 tons. Expanding production significantly before existing capacity has been fully utilized raises questions about its ability to absorb the additional output in the future.

A founding six-member team; dividends of over RMB 26 million during the reporting period

The story of Qiyunshan Food began with the food factory in Chongyi County in 1979. In 1997, then-factory manager Liu Zhigao led dozens of employees to pool money to complete the restructuring of this state-owned factory, laying the foundation for today’s “family + veteran officials” governance structure. Over the past nearly 30 years, six core management members have led the company to grow into a champion in its niche market.

Equity look-through shows that the company is controlled by Chongyi Food Factory (75% held) and Yunzhishang Limited Partnership (25% held). Both of these two shareholder platforms are actually controlled by the same six-member core management team made up of four veteran employees, including Liu Zhigao, Liu Jiyan, and Zhu Fangyong, among others; together, they control more than 68% of the company’s equity.

In the key period of its second re-filing, Qiyunshan Food made cumulative cash dividend distributions of RMB 38.80 million during the reporting period, including dividends of RMB 20.30 million at the end of 2024, accounting for 38.2% of net profit for that year. Most of these dividends flowed into the pockets of the controlling shareholders, and the six core shareholders received at least RMB 26.38 million each.

As the leader in the nantsang-jujube segmented track, Qiyunshan Food’s brand heritage and market position are beyond doubt. However, on its second attempt to list on HKEX, it must provide investors with a clear explanation of how to break the predicament of product single-mindedness, and how to reduce dependence on major customers and distributors—issues that will directly determine whether the market will buy into this “sweet-and-sour” nantsang-jujube cake.

Reporting and writing: Nandu · Bay Finance and Media reporter Liu Changyuan