image credit: Bamboo Works
Key Takeaways:
With revenue up 30% and net profit 84% over the past three years, Liuliu has a strong story to tell in its latest IPO application, following three earlier attempts
New products and market channels are boosting the snack maker's revenue, but price-cutting for larger customers is pressuring its margins
"Suan liuliu" is a Chinese expression that mimics the sound of sucking a lemon. A quarter century ago, entrepreneur Yang Fan registered the trademark LIUM, combining the old expression with the first letter of the word "mei," or plum, to connate a snack made from dried plums, a fruit widely grown in his home in East China's Anhui province.
As he tells the story, Yang, born in 1969, dropped out of school and headed to Beijing in 1988 with just 50 yuan in his pocket, then worth about $13.40. He later brought his experience as a door-to-door salesman back to his hometown of Wuhu, where he set up a pastry company in 1997. In 2006, he noticed that his dried plums had become a hit, and decided to stake his company on a market that was largely untapped at that time.
Today "Uncle Liu" or the "Plum King," as Yang is sometimes called, presides over China's largest fruit snack company. His latest bet is on a listing for his company in Hong Kong's highly stoked capital market, where a record of nearly 500 companies is currently in the listing pipeline.
The Plum King's newly renamed company, Liuliumei Co. Ltd, is one of those, after filing an application to list in Hong Kong last week. The filing marks Yang's third attempt to list in Hong Kong, and his fourth overall if you include an attempt to list on Shenzhen's ChiNext market in 2019. The clock is ticking in the latest attempt IPO attempt, since three of his investors are entitled to have their nearly 200 million yuan ($29.5 million) in pre-IPO funding returned if Liuliumei fails to list before late June.
Yang is a high roller in a relatively low-key but still lucrative industry. Retail sales for China's fruit ...
