Target Information

INC Garden, established in 2013, is a leading player in the affordable Chinese dining industry in China, having opened 663 directly operated stores across 146 cities and counties in 14 provinces. The brand focuses on delivering simple, fresh, and high-quality ingredients to consumers, emphasizing homemade-style dishes at reasonable prices.

By adhering to a cooking philosophy that promotes reduced oil, salt, and fewer seasonings, INC Garden has successfully modernized and popularized local cuisine to cater to diverse tastes across northern and southern China. The company has streamlined its menu from nearly 100 SKUs to 45-50 items, ensuring that the offerings remain aligned with consumer preferences while guaranteeing consistency in taste and experience.

Industry Overview in China

The Chinese dining market is undergoing significant transformations driven by increasing disposable income, a steady urbanization rate, and changing demographic factors. These trends invigorate the growth of affordable dining options as consumers increasingly seek value for their money in meal planning.

Notably, the affordable dining sector is projected to gain momentum, shaped by evolving consumer habits that favor quick, budget-friendly dining experiences. As competition grows, businesses like INC Garden that can effectively harness supply chain efficiencies and maintain high product quality will thrive.

The importance of supply chain management in the Chinese food service industry cannot be overstated, especially with the increasing reliance on fresh produce and sustainable sourcing practices. Companies that invest in efficient supply chain systems are better positioned to meet the rising consumer expectation for transparency and quality.

Additionally, the incorporation of technology in operations, such as digital inventory management and customer relationship systems, becomes vital for enhancing operational efficiency and gaining a competitive edge. As consumer preferences shift, adapting to these changes while promoting a diverse menu will be essential for driving future growth.

Rationale Behind the Deal

The recent public listing of INC Garden on the Hong Kong Stock Exchange (Stock Code: 00999.HK) signifies an important milestone for the company and the broader Chinese food industry. The primary goal of the IPO is to expand the store network, enhance brand visibility, and improve supply chain efficiency. The raised capital will facilitate the upgrade of smart equipment and digital systems that underpin the company's operational framework.

By investing in digital innovations and standardizing operations, INC Garden is not only poised for growth but is also setting the foundation for sustainable long-term success in a competitive marketplace. This strategic move aligns with the broader consumer trend towards healthier, affordable dining choices.

Investor Information

Cahwa Capital, founded by Mr. Xiangqian Song, is an influential investment firm that focuses on consumer needs in China. Since 2023, they have invested a total of RMB 500 million in INC Garden across two funding rounds, becoming the only external institutional shareholder prior to its public listing. The firm's strategy emphasizes investment in essential consumer sectors that cater to the evolving needs of the masses.

With a firm belief that affordable living standards will form the bedrock of future societal developments in China, Cahwa Capital's commitment to INC Garden reflects its philosophy of empowering ordinary consumers' lives through accessible dining solutions. The partnership aims to revolutionize the management of Chinese cuisine while promoting a consumer-centered operational approach.

View of Dealert

The listing of INC Garden marks a pivotal development in the Chinese affordable dining sector. Drawing on established consumer trends and market dynamics, the investment by Cahwa Capital appears to be a strategic and forward-thinking move. The company's commitment to quality, affordability, and operational efficiency positions it well for sustained growth in a competitive landscape.

Furthermore, the dual-brand strategy that incorporates the community dining model “Caishou Canteen” may unlock new growth avenues by targeting diverse consumer segments. Such innovation points towards a robust business model that could resonate with evolving consumer preferences for convenience in dining.

Overall, the comprehensive management strategy, synergistic partnership with Cahwa Capital, and continual enhancements to the supply chain and digital systems collectively establish a solid foundation for future success. The progress made thus far instills confidence in INC Garden's potential, positioning it as a strong contender within the affordable dining market.

In summary, the widespread presence and strategic initiatives of INC Garden signify a major shift towards modernizing Chinese dining practices. If these efforts are sustained and properly capitalized, the company is likely to maintain its competitive edge and achieve long-term milestones in the evolving culinary landscape.

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