NewTimeSpace丨"First Chinese Noodle Restaurant Stock" Underperforms in Secondary Market; Xiao Noodles (02408.HK) Falls Nearly 40% Since Listing

From breaking issue price on its first trading day to current daily turnover of less than RMB 2 million.

Xiao Noodles (02408.HK), known as the "first Chinese noodle restaurant stock," has fallen out of favor in the capital market with lackluster stock performance.

**Post-Listing Share Price Decline nearly 40%; Cornerstone Investors Suffer over US$8 Million in Paper Losses**

Public information shows that Xiao Noodles was founded in Guangzhou in 2014, specializing in Chongqing noodles with products covering noodles, rice, snacks, and beverages. Its brand slogan is "Not in Chongqing, but meeting noodles."

On April 15, 2025, Xiao Noodles first submitted its prospectus to the Hong Kong Stock Exchange. After the initial expiration, the company updated its prospectus on October 15, 2025 for a second submission.

Subsequently, on November 17, 2025, Xiao Noodles passed the listing hearing and launched its Hong Kong IPO global offering 10 days later.

NewTimeSpace Research Institute learned that on December 5, 2025, Xiao Noodles was officially listed on the Hong Kong Stock Exchange. The company priced its IPO at HK$7.04 per share, with total expected proceeds of HK$685 million.

As the first listed player in the Chinese noodle restaurant sector, Xiao Noodles' IPO attracted considerable attention. During the offering phase, the Hong Kong public offering was oversubscribed by approximately 426 times, with renowned institutions such as Hillhouse Capital and Haidilao appearing on the cornerstone investor list.

However, on its first trading day, Xiao Noodles opened at HK$5, down 28.98% from the issue price. This performance formed a stark contrast to the pre-listing oversubscription scenario. The stock finally closed at HK$5.08 on the first day, with the decline narrowing to 27.84%, giving the company a market capitalization of HK$3.61 billion on its listing day.

After several days of fluctuation, Xiao Noodles' stock price did not rebound significantly but instead experienced continuous declining slides.

NewTimeSpace Research Institute observed that Xiao Noodles fell for six consecutive trading days from December 18 to December 29, 2025, with a cumulative decline of 14.83% during this period.

As of the close on January 20, 2026, Xiao Noodles' closing price reached HK$4.41 per share, down 37.36% from its IPO price.

According to the prospectus, cornerstone investors collectively subscribed for US$22 million (approximately HK$171 million) of offering shares, accounting for 25% of total funds raised. Based on the IPO price of HK$7.04 and the closing price of HK$4.41 on January 20, the cornerstone investment portfolio's overall paper loss exceeds US$8 million.

**Turnaround to Profitability, Rapid Store Expansion**

Looking at Xiao Noodles' current stock performance, the company's performance in the capital market before and after listing presents a stark contrast.

Unlike the cold reception in the secondary market after listing, Xiao Noodles has been in the capital market spotlight since its founding, enjoying great favor. It completed 8 rounds of investment over 11 years, with shareholders from various fields including VC, catering, and real estate, such as Qingcong Capital, Jiumaojiu, Qixin Holdings, Xi Jiade Dumpling founder Gao Defu, and Country Garden Holdings' Huibi No. 1.

In terms of financial performance, Xiao Noodles' revenue grew from RMB 418 million to RMB 1.154 billion from 2022 to 2024, with first-half 2025 revenue reaching RMB 703 million, a year-over-year increase of 33.8%.

With rapid revenue growth, Xiao Noodles turned profitable in 2023, with net profit increasing to RMB 60.7 million in 2024 and reaching RMB 41.83 million in the first half of 2025, a year-over-year increase of 95.8%.

The prospectus shows that from early 2022 to November 2025, Xiao Noodles expanded its restaurant count from 133 to 465, a 249.6% increase, reaching 22 cities in mainland China and newly expanding into the Hong Kong market.

As of November 18, Xiao Noodles had 115 new restaurants in pre-opening preparation, including its first overseas location to be launched in Singapore.

Xiao Noodles opened franchising in 2019, with franchise store numbers of 59, 69, and 81 in 2022, 2023, and 2024, respectively, and 86 as of June 30, 2025.

Meanwhile, Xiao Noodles plans to newly open 150-180, 170-200, and 200-230 company-owned and franchised restaurants in 2026, 2027, and 2028, respectively.

**Operational Quality Concerns, Key Metrics All Decline**

Amid rapid expansion, how to balance the relationship between operational scale and quality has become an important issue for Xiao Noodles' high-quality development. The company candidly admitted in its prospectus that accelerated business expansion may lead to increasing risks and uncertainties.

The prospectus shows that in recent years, Xiao Noodles has continuously used proactive price reductions and cost-efficiency improvements to gain profit margins, yet the price reduction strategy has not driven increases in table-turnover rate or per-store sales.

Data shows that the average order value at Xiao Noodles' company-owned and franchised restaurants decreased from RMB 36.2 and RMB 36.0 in 2022 to RMB 34.2 and RMB 33.5 in 2023, and further dropped to RMB 31.8 and RMB 30.9 in the first half of 2025.

Xiao Noodles' overall table-turnover rate at company-owned and franchised stores increased from 3.1 and 3.0 in 2022 to 3.9 and 3.6 in 2023, and remained relatively stable at 3.8 and 3.6 in 2024. However, in the first half of 2025, the overall table-turnover rate at its company-owned and franchised stores was 3.4 and 3.1, lower than the 3.8 and 3.6 in the same period last year.

From 2022 to 2024, Xiao Noodles' average daily sales per store for company-owned stores were RMB 11,881, RMB 13,997, and RMB 12,410, respectively, while franchised stores were RMB 11,672, RMB 13,554, and RMB 12,376, respectively. In the first half of 2025, this figure was RMB 11,805 and RMB 11,493 for company-owned and franchised stores, respectively.

Looking at Xiao Noodles' per-store sales, both 2024 and the first half of 2025 showed a declining trend.

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