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

Investing in stocks? Check out Golden Kylin Analyst Reports—authoritative, professional, timely, comprehensive—helping you discover potential thematic opportunities!

Jiangxi Qiyunshan Food Co., Ltd. (hereinafter referred to as “Qiyunshan”), known as the “Number One South Sour Jujube Cake in China,” recently submitted an application for listing on the Hong Kong Stock Exchange, with Zhongtai International serving as its exclusive sponsor.

In fact, Qiyunshan first filed for listing on the Hong Kong Stock Exchange in June 2024. This 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 portfolio has expanded to include four other South Sour Jujube snacks and other fruit and vegetable cakes. As of the latest practical date, the company’s two main South Sour Jujube products are South Sour Jujube Cake and South Sour Jujube Granules. Other products include South Sour Jujube Jelly, South Sour Jujube Soft Candy, South Sour Jujube Frozen Dessert, 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, planning, and marketing services related to its Camellia Oil products to Qiyunshan Camellia Oil.

According to data cited from Zhuoshi Consulting in the prospectus, in 2024, the company held a 32.4% share of the Chinese South Sour Jujube Food Market by retail sales, ranking first in the industry. In terms of retail sales for fiscal year 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 total snack market. Based on retail sales in fiscal year 2024, the company ranked ninth in the Chinese fruit snack industry with a 0.6% market share.

High dependence 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 FY2024, mainly driven by expansion of distribution networks and growing demand from core customers; net profit for the year was 23.7 million yuan, 53.2 million yuan, and 48.9 million yuan, respectively, with both revenue and profit declining in FY2025.

The decline in total revenue in FY2025 is mainly attributed to reduced sales orders from Customer F (the company’s largest customer in FY2024 and FY2025) due to changes in product mix and supply, as well as the timing of the Lunar New Year holiday.

Net profit in FY2025 fell 8% to 48.9 million yuan, primarily due to slight revenue decrease 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 FY2025, 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 tightening cash flow.

The prospectus reveals that the company’s business is highly dependent on a single product—South Sour Jujube.

From FY2023 to FY2025, revenue from South Sour Jujube products (including Jujube Cake and Jujube Granules) accounted for over 90%, 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 FY2025, accounting for 86.3%, with the top five customers contributing 33.7% of revenue and the largest customer 12.8%. The high concentration of customers and channels poses risks of customer loss or order fluctuations.

During the reporting period, capacity utilization for core products was not saturated. The utilization rates for South Sour Jujube Cake were 67.1%, 78.2%, and 79.6%, all below 80%. For South Sour Jujube Granules, utilization rates were 59.2%, 64%, and 82.3%, with only FY2025 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 top five customers together contributed 38.8%, up from 26.5% in FY2023. By FY2025, as orders from Customer F decreased, its share of sales fell to 12.8%, with total revenue dropping to 314 million yuan. This indicates that Qiyunshan’s revenue is notably affected by the procurement practices of a few large customers or distributors.

Claimed as “Green Food,” the company was fined twice by regulators for mold test failures

The prospectus states 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. The majority of sales came from these distributors.

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

Since the company mainly sells through distributors, any reduction, delay, or cancellation of orders; increased competition from other brands; failure to renew distribution agreements; inability to establish favorable terms with new distributors; or losing one or more distributors without timely replacement could cause revenue fluctuations or declines, adversely affecting financial condition and operating performance.

The main raw material used in production is South Sour Jujube fruit. Other raw materials include seasonings and sugars. 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, respectively, accounting for about 64.6%, 67.2%, and 65.8% of total cost of sales.

Qiyunshan states in the prospectus that its main raw material, South Sour Jujube, is typically harvested by local farmers in undeveloped mountainous areas. The company’s business depends on maintaining a stable supply of South Sour Jujube; any shortage or price fluctuation could negatively impact procurement. Harvesting and planting are affected by natural conditions beyond control. Adverse weather or climate conditions could affect the quantity or quality of available South Sour Jujube. Global 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, Qiyunshan’s flagship product, South Sour Jujube Cake, has been certified as “Green Food” by the China Green Food Development Center for 29 consecutive years and was recognized as a National Geographical Indication Protection Product in 2018.

However, the company’s products have twice been fined for mold test failures not meeting the “National Food Safety Standard - Preserved Fruits” requirements, with total fines 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.