Recently, Anjuke Food Group Co., Ltd. made headlines by formally submitting its listing application to the Hong Kong Stock Exchange, aiming for a dual listing known as “A+H.” This ambitious move has sparked extensive interest within the capital marketsHowever, a closer look at the company's recent financial performance and market behavior reveals intricate challenges that accompany this decision.

Founded in December 2001, Anjuke has positioned itself as a leader in China's frozen food industryIts product range includes various categories, such as frozen prepared foods, frozen dishes, and frozen noodles and rice productsThe company enjoyed significant success and was listed on the Shanghai Stock Exchange back in February 2017. Nevertheless, its stock price has been incredibly volatile in recent yearsAs of January 21, 2025, the closing price of Anjuke's A-shares stood at 76.4 yuan, which translates to a total market capitalization of 22.41 billion yuanThis represents a steep decline from its peak price of 277.53 yuan per share on March 31, 2021.

The financial indicators tell a narrative of their own, painting a picture of fluctuating performanceAccording to the company’s prospectus, Anjuke's revenue for the years 2022 and 2023 was 12.1 billion yuan and 13.965 billion yuan, respectively, with gross profits of 2.561 billion yuan and 3.157 billion yuanWhile the profit figures for these years demonstrated growth, the latest published report for the third quarter of 2024 paints a contrasting image: revenue totaled 11.077 billion yuan, marking an increase of just 7.84% year-on-year, but net profit fell to 1.047 billion yuan, a decrease of 6.65%. Notably, the third quarter's net profit attributable to shareholders plummeted by 36.76% to 244 million yuan.

When dissecting revenues by product category, it becomes apparent that the frozen prepared foods and frozen dishes segments managed to maintain positive growth in the third quarter of 2024. However, other categories, including frozen noodles, agricultural products, and snacks, suffered declines in revenue

Advertisements

The most alarming figure comes from the snack food sector, which reported a mere 912,300 yuan in revenue—a staggering drop of 79.28% year-on-year.

Anjuke's decision to pursue a listing in Hong Kong is strategized to broaden its financing avenues and enhance its capacity for international fundraisingAccording to company statements, this initiative is pivotal for accelerating its internationalization strategy and overseas business development, ultimately aiming to bolster its comprehensive competitiveness.

In recent years, the company has made notable strides in pursuing an international strategy, including a significant acquisition of a 70% stake in the British company Kung Fu Foods, aimed at entering overseas marketsYet, the financial reports indicate that Anjuke’s overseas revenue contribution remains minimalFrom 2021 to 2023, revenues from international markets were 35.2256 million yuan, 108 million yuan, and 128 million yuan, showing modest growth but still constituting an insignificant portion of total revenueFor the third quarter of 2024, its overseas revenue amounted to 122 million yuan, marking a 35.77% increase, but whether this trend can be sustained and effectively lift overall company performance remains uncertain.