Editor’s Note
This article reports on the sudden closure of multiple “Xiao Nan Guo” restaurant outlets in Shanghai and the subsequent sharp decline in the share price of its parent company. We have been unable to reach the company’s Hong Kong office for comment. The situation is developing.
According to mainland media reports, multiple “Xiao Nan Guo” restaurants under Shanghai Xiao Nan Guo (3666) located in Shanghai have suddenly ceased operations. This newspaper attempted to contact Shanghai Xiao Nan Guo’s Hong Kong office, but the call could not be connected. Affected by the news, the stock plunged as much as 28% today, hitting a low of HK$0.025; it is currently trading at HK$0.027, down 23%.
Mainland media Lanjing News pointed out that based on information from multiple consumers, several “Xiao Nan Guo” restaurants in Shanghai suddenly stopped operating in early February, with deposits paid for Lunar New Year’s Eve dinners and balances on prepaid cards also being non-refundable. However, when Lanjing News called Xiao Nan Guo branches in Wuxi and Zhuhai, it was found that these outlets are still operating normally. Among them, the Wuxi branch stated that they are a franchise store and are unaffected.
The Xiao Nan Guo brand has a history of nearly 30 years, and the group listed in Hong Kong in 2012. At its peak in 2015, it had as many as 139 outlets across various regions. However, according to last year’s interim results report, the group no longer has any outlets in Hong Kong.
Additionally, the group announced earlier this year that it sold the entire equity of its subsidiary, Xiao Nan Guo (Hong Kong) Catering, which operates 10 restaurants, to independent third party Yam Shan Shan for a cash consideration of US$100,000 (approximately HK$780,000). After the transaction is completed, the group will retain two restaurants. According to Lanjing News, these two restaurants will be renamed “Ching Ching”.
The group also issued a notice earlier this month, stating that the auditor did not express an opinion on the 2024 financial statements, and to alleviate liquidity pressure, it is evaluating the possibility of further equity fundraising in the first quarter of this year.
