The big ambitions and cheap prices of China's food brands

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Many food brands are trying to go public and Haidilao's listing is just one example.

Wang Jianhui, general manager of the R&D department at Capital Securities, commented that Chinese are crazy about eating because food is integral to the culture.

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“Haidilao is very well managed with a unique business model, it does not have an especially big input nor is it spending lots of money on chef salaries… and I think there is still room to grow both domestically and internationally,” Wang added.

Not only does Haidilao have potential for good development but preserved food manufacturer Ziyan Foods, for example, is planning to launch an IPO in the next two or three years. The company hopes the financing will help them open overseas markets.

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“Going public will help us improve our management team. That will give us more strength, which we will need because we are gradually preparing for oversea expansion and that will take more staff and legal knowledge,” said Zhao Hanli, vice president of operations in Shanghai Ziyan Food.

The fact these companies can consider listing reflects the fast growth of China's consumption sector. Previously people may have only cared about food prices, but now they prefer to buy well-known brands, and this shift in consumer desire has fueled the brands' growth.

Meanwhile, Yang Zhongning, an industrial securities investment consultant explained, “There are two ways to do that (turn into a national brand). Running a chain yourself, or franchising. But considering the issue of food safety, these companies will want to run their own operations. But that takes capital, so that's why they want to go public.”

However, experts are quick to point out, that not every well-known food brand is guaranteed a listing, as regulators' scrutiny of IPOs in the A-share market is becoming stricter.