Qiyun Mountain Hong Kong Stock Exchange IPO: Core Product Dependency Exceeds 90%, "Green Food" Label Yet Penalized Twice

AI · Qiyunshan’s Second IPO Attempt: What Are the Hidden Concerns?

Known as the “Number One South Sour Jujube Cake in China,” Jiangxi Qiyunshan Food Co., Ltd. (hereinafter “Qiyunshan”) recently submitted a new listing application to the Hong Kong Stock Exchange, with Zhongtai International serving as its sole sponsor.

In fact, Qiyunshan first filed for an IPO with the HKEX in June 2024. This latest submission is a second attempt after updating its financial data.

Qiyunshan is a fruit snack company mainly selling products made from South sour jujube, headquartered in Chongyi County, Jiangxi Province. The company launched its first South sour jujube cake in 1992, and over the years, its product lineup has expanded to include four other South sour jujube snacks and various fruit and vegetable cakes. As of the latest practicable date, the company’s main products are South sour jujube cake and South sour jujube granules. Other products include sour jujube jelly, sour jujube soft candies, sour jujube jelly, and other fruit and vegetable cakes (including navel orange, green plum, loquat, and water chestnut). Besides selling South sour jujube products, during the reporting period, the company also provided branding and marketing services related to tea oil products for Qiyunshan Camellia Oil.

According to data cited from Zhuoshi Consulting in the prospectus, in 2024, the company held a 32.4% retail market share of China’s South sour jujube food market, ranking first in the industry. In terms of retail sales in 2024, the top five and top ten companies together accounted for only 5.9% and 10.4% of the total market share, respectively. The Chinese fruit snack market size was 99.5 billion yuan, accounting for 7.4% of the overall snack market. Based on retail sales in 2024, the company ranked ninth in China’s fruit snack industry with a 0.6% market share.

Highly Dependent on South Sour Jujube Products

According to the prospectus, from fiscal years 2023 to 2025, the company’s total revenue was 246 million yuan, 339 million yuan, and 313 million yuan, respectively, with a 37.5% year-over-year increase in 2024, mainly driven by expansion of distribution channels and growing demand from core customers. Net profit for these years was 23.7 million yuan, 53.2 million yuan, and 48.9 million yuan, respectively, with both revenue and profit declining in 2025.

The company attributes the revenue decline in 2025 primarily to decreased sales orders from Customer F (its largest customer in 2024 and 2025) due to changes in product mix and supply, as well as the timing of the Lunar New Year holiday.

Net profit in 2025 fell by 8% to 48.9 million yuan, mainly due to slight revenue reduction and increased sales and marketing expenses.

During the reporting period, the company’s gross profit margin remained relatively stable at 48.8%, 48.6%, and 51.3%.

Additionally, in 2025, Qiyunshan’s operating cash flow dropped sharply by 98.3% to only 1.84 million yuan, mainly due to reduced customer prepayments and increased inventory. Meanwhile, the company paid dividends of 20.3 million yuan, further straining cash flow.

The prospectus reveals that the company’s business is highly reliant on a single product—South sour jujube.

From FY2023 to FY2025, the core products—South sour jujube cake and granules—accounted for over 90% of revenue, indicating a single-product structure. Future shifts in consumer preferences, raw material supply fluctuations, or negative publicity related to South sour jujube could directly impact the company’s performance. In terms of distribution channels, over 80% of revenue came from offline distributors in 2025, with offline sales accounting for 86.3%. The top five customers contributed 33.7% of revenue, with the largest customer accounting for 12.8%. High customer and channel concentration pose risks of customer loss or order fluctuations.

During the period, capacity utilization for core products was not saturated: South sour jujube cake’s utilization rates were 67.1%, 78.2%, and 79.6%, all below 80%. For granules, utilization rates were 59.2%, 64%, and 82.3%, with only 2025 exceeding 80%.

While revenue grew, the “Other Products” segment saw continuous decline. From FY2023 to FY2025, revenue decreased from 14.45 million yuan to 9.38 million yuan, and sales volume shrank from 502.3 tons to 284.5 tons.

The prospectus also shows a significant increase in customer concentration.

In FY2024, the largest customer (Customer F) accounted for 23% of sales, and the combined sales of the top five customers reached 38.8%, up from 26.5% in 2023. By FY2025, as orders from Customer F decreased, its sales share fell to 12.8%, with total revenue dropping to 314 million yuan. This indicates that the company’s revenue is notably affected by the procurement practices of a few large customers or distributors.

Claims of “Green Food” but Previously Penalized for Mold Testing Failures

The prospectus indicates that Qiyunshan relies heavily on third-party distributors.

As of December 31, 2025, the distribution network comprised 271 distributors, including 230 offline and 41 online. Distributor purchases accounted for the majority of sales.

From FY2023 to FY2025, offline sales contributed 85%, 88.4%, and 86.3% of revenue, respectively, while online sales accounted for only 1.2%, 0.7%, and 0.7%.

Because the company mainly sells through distributors, any reduction, delay, or cancellation of orders; distributors choosing or increasing sales of competitors’ products; failure to renew agreements or maintain relationships; inability to establish favorable terms with new distributors; or losing one or more distributors without timely replacement could lead to revenue fluctuations or declines, adversely affecting financial condition and operating results.

The main raw material used in production is sour jujube fruit, supplemented by seasonings, sugar, and other auxiliary materials. During the reporting period, all raw materials were purchased from Chinese suppliers. In FY2023, FY2024, and FY2025, raw material costs were approximately 81.6 million yuan, 117 million yuan, and 100 million yuan, representing about 64.6%, 67.2%, and 65.8% of the total cost of sales, respectively.

The company states that its primary raw material, sour jujube, is typically harvested from local farmers in undeveloped mountainous areas. The business depends on maintaining a stable supply of sour jujube; shortages or market price fluctuations could negatively impact procurement. Harvesting and planting are affected by natural conditions beyond control. Adverse weather or climate conditions could reduce the quantity or quality of sour jujube available. Climate change may also impact supply. If the company cannot ensure sufficient raw material supply, its business performance and financial health could be significantly harmed.

Since 1997, the flagship product, sour jujube cake, has been certified as “Green Food” by the China Green Food Development Center for 29 consecutive years and recognized as a national geographical indication product in 2018.

However, the company’s products have twice been fined for mold test failures that did not meet the national food safety standards for candied fruit, with total penalties and confiscations exceeding 120,000 yuan. The company explained this was due to inadequate humidity control in production areas and has since rectified the issue.

Additionally, Qiyunshan has not fully paid social insurance and housing provident funds for some employees. Estimated unpaid amounts for FY2023, FY2024, and FY2025 are approximately 3.1 million yuan, 5.1 million yuan, and 4.2 million yuan, respectively.

(News tips can be directed to the Financial Channel of The Paper, ppcj@thepaper.cn)