Anhui-based Liuliumei has changed its name for its latest attempt to list in Hong Kong, but will investors find its fruit snack business any tastier?

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Key Takeaways:

• With revenue up 30% and net profit 84% over the past three years, Liuliu has a strong story to tell in its latest IPO application, following three earlier attempts
• New products and market channels are boosting the snack maker's revenue, but price-cutting for larger customers is pressuring its margins

"Suan liuliu" is a Chinese expression that mimics the sound of sucking a lemon. A quarter century ago, entrepreneur Yang Fan registered the trademark LIUM, combining the old expression with the first letter of the word "mei," or plum, to connate a snack made from dried plums, a fruit widely grown in his home in East China's Anhui province.

As he tells the story, Yang, born in 1969, dropped out of school and headed to Beijing in 1988 with just 50 yuan in his pocket, then worth about $13.40. He later brought his experience as a door-to-door salesman back to his hometown of Wuhu, where he set up a pastry company in 1997. In 2006, he noticed that his dried plums had become a hit, and decided to stake his company on a market that was largely untapped at that time.

Today "Uncle Liu" or the "Plum King," as Yang is sometimes called, presides over China's largest fruit snack company. His latest bet is on a listing for his company in Hong Kong's highly stoked capital market, where a record of nearly 500 companies is currently in the listing pipeline.

The Plum King's newly renamed company, Liuliumei Co. Ltd, is one of those, after filing an application to list in Hong Kong last week. The filing marks Yang's third attempt to list in Hong Kong, and his fourth overall if you include an attempt to list on Shenzhen's ChiNext market in 2019. The clock is ticking in the latest attempt IPO attempt, since three of his investors are entitled to have their nearly 200 million yuan ($29.5 million) in pre-IPO funding returned if Liuliumei fails to list before late June.

Yang is a high roller in a relatively low-key but still lucrative industry. Retail sales for China's fruit snack market totaled 52 billion yuan in 2024, accounting for 5.6% of the total snack market. And despite criticism of his single-minded fascination with relatively mundane plums and prunes, he has managed to juice up the images of both using flashy marketing campaigns.

Celebrity endorsements

For a decade between 2013 and 2023, Yang hired one of China's most bankable film and television stars, former child actress Yang Mi, who is unrelated, as his brand ambassador. After Yang Mi, other celebrity faces for Yang Fan's company have included singer Xiao Zhan and boy band Teens in Times, with promotional campaigns on China's major social media sites.

The heavy spending helped to popularize his company, previously called Liuliu Orchard until the most recent listing application, when it changed its name to Liuliumei. But the aggressive marketing has also been a drag on profits.

Since bringing on a branding consultant seven years ago, Liuliumei has introduced two new product lines: plum jelly in 2019 and pitted prune products in 2023. Starting around the same time, Yang also began to focus on juicing up his sales network by working more closely on directly selling to supermarkets and membership stores, along with snack food chains.

Liuliumei's latest filing shows its revenue rose 30% over the last three years from 1.32 billion yuan in 2023 to 1.71 billion yuan last year, while its profit nearly doubled to 182 million yuan from 99 million yuan over that time. While sales and distribution remains one of its top expenses, it has managed to bring down the figure from 23.4% of revenue in 2023 to 15.9% last year, helping profits outpace revenue growth.

But the company's gross margin, which doesn't factor in marketing expenses, hasn't fared as well, falling from 40.1% in 2023 to 35.6% last year. That decline is the result of lower prices as Liuliumei cultivated supermarkets and membership stores like Sam's Club, as well as China's growing snack food chains. Such buyers are typically very large and thus demand lower prices than smaller distributors, chains and individual stores.

Yang's major customers in 2024 and 2025 were both snack food chains. One was Fujian Wanchen Food (300972.SZ), parent of the Haoxianglai chain, which is eyeing its own Hong Kong IPO. The other, Busy Ming (1768.HK), raised a sizable HK$3.67 billion ($468.4 million) in its January Hong Kong listing, and is currently up about 42% from its IPO price, showing the category is big business and remains popular among investors.

Changing sales channels

As it targets more direct sales, Liuliumei's older channels using distributors have sunk from 66.7% of sales in 2023 to 31% last year. Snack food chains rose from 10.1% of sales to 38% of sales over that time, while supermarket and membership stores rose from 12.9% to 23.5%. Liuliumei's fourth sales channel, its online self-operated stores, declined from a 10.3% of revenue in 2023 to 7.5% in 2025.

Relatively high valuations for Liuliumei's customers like Busy Ming, with a price to earnings (P/E) ratio of 28 and Wanchen at 21, suggest the Plum King may also be valued strongly by snack-hungry investors. A ratio in the middle of those two, or about 25, would value the company at about 4.6 billion yuan, based on its 2025 profit. But here we should point out such a valuation would still be much smaller than the HK$73 billion for Busy Ming and 35 billion yuan for Wanchen.

And not all is peachy with Liuliumei, which is still haunted to some extent by its failure to complete its listing so far. The company's withdrawal of its first Shenzhen listing application in 2019 led to the departure of its first major investor, forcing Yang to return that investment with interest. Another group that has invested 191 million yuan in the company has a similar agreement that allows those investors to ask for their money back if Liuliumei fails to list by the end of June. That means the company is racing against the clock to complete its listing within the next month.

Liuliumei first applied to list in Hong Kong in April last year, followed by a second application in October. Both applications lapsed after it failed to complete the listing within a mandated six-month period, which explains why the company has made yet another new filing.

Another issue for investors to consider is Liuliumei's shrinking cash reserves, which stood at just 33.9 million yuan at the end of last year, down from 78 million yuan at the end of 2024. Those question marks hanging over the company show it's far from clear whether the market will see Liuliumei as a "plum listing" if it finally completes an IPO on its fourth attempt.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.