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Pagoda Submits Hong Kong Listing Application as 2021 Revenue Hits 10 Billion Yuan

May 06, 2022

On May 2, Pagoda, China’s largest chain of fruit shops, submitted a formal stock listing application for the Main Board of the Hong Kong Stock Exchange with Morgan Stanley as the sole sponsor, according to documents published by the exchange. Pagoda’s initial public offering would cap a multiyear effort by the company to go public that has seen it go back and forth between Hong Kong and its corporate domicile of Shenzhen in search of a listing board. If the current application is successful, Pagoda will become China’s first publicly traded fruit specialist retailer.

According to a draft application posted online, market research information from consulting firm Frost & Sullivan showed that Pagoda “ranked first among all retailers that sell fruits in China in terms of fruit retail sales value in 2021 and meanwhile we also ranked first among all fruit specialty retail operators in China in terms of fruit retail sales value, representing approximately 2.8 times that of the second largest market player.”


Pagoda’s income statement. Source: draft application published on HKEXnews.

Pagoda has a total of 5,351 offline stores in China, covering more than 130 cities in 22 provinces. In 2021, Pagoda accounted for approximately 1% of China’s total fresh fruit retail sales, while the top five players had a share of 3.6% of retail sales. Fresh fruit sales account for the majority of Pagoda’s revenue, with sales of “fruit and other food products” reaping nearly 10 billion Chinese yuan ($1.5 billion) in 2021 and accounting for 97.1% of the company’s total annual revenue. “Royalty and franchise income” and “membership income” comprise much of Pagoda’s remaining inflows.

Influenced by the COVID-19 pandemic, Pagoda’s revenue dropped slightly from 2019 to 2020 and then roared back in 2021, according to its financial statements. The company’s total revenue in 2019 was 8.976 billion yuan ($1.34 billion), while the revenue in 2020 was 8.854 billion yuan ($1.33 billion), a decrease of approximately 1.4%. In 2021, the company’s revenue soared by 16.2% to 10.289 billion yuan ($1.54 billion), while its gross profit was 1.156 billion yuan ($173.0 million), up from 876 million yuan ($131.1 million) in 2019. The company’s net profit in 2021 was 225.8 million yuan ($33.8 million).

Pagoda also reported the proportions of its revenue from various channels. In 2021, franchised stores accounted for 81.3%, self-operated stores accounted for 0.4%, regional dealers accounted for 9.3%, direct sales accounted for 5.7% and online channels accounted for 3.2%.

Image: Pagoda

This article was translated from Chinese. Read the original article.

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