New stock interpretation | After three rounds of bidding, Lu Lu Mei finally got what she wanted, with only 0.35 billion yuan in cash equivalents.

On April 16, 2025, October 28, 2025, and May 21, 2026, Liumei, the leading company in the Chinese fruit snack industry, submitted its application to the Hong Kong Stock Exchange. On May 26, it finally obtained approval after three rounds of submissions. Liumei is a company specializing in plum-based fruit snacks, and according to Frost & Sullivan, in 2024, Liumei ranked first in the Chinese fruit snack industry with a 4.9% market share in retail sales, and also ranked first in the natural ingredient jelly industry with a 45.7% market share. The company has built a diversified plum product matrix, ranging from classic series using traditional techniques to products with various flavors. Its performance in recent years has been steadily increasing, with a compound annual revenue growth rate of 13.73% from 2023 to 2025, a compound annual shareholder net profit growth rate of 32.6%, and shareholder net profit margins of 7.49%, 9.1%, and 10.64% respectively. As of April 2026, the company had cash and cash equivalents of 0.35 billion yuan. The three submissions to the Hong Kong Stock Exchange indicate the company's determination to go public. Although the company has maintained a steady performance and profitability, it has a high level of interest-bearing debt and limited cash on hand. The company faces significant short-term debt pressure, with interest-bearing bank loans totaling 516 million yuan as of April this year, resulting in a cash ratio of just 6.78%. While the company is poised to go public in Hong Kong, investors should be cautious about its fundamentals and whether it is worth paying attention to. Performance Driven by Three Major Products, High Customer Concentration Liumei offers three main product categories: dried plum snacks, western plums, and plum jelly products. The company has different series for each category, including traditional products and products with various flavors. In terms of products, dried plum snacks are the core product, but their revenue has been fluctuating. In 2025, the revenue declined, with a market share of 48.5%. Western plum and plum jelly products have performed well, maintaining double-digit growth levels. The compound annual revenue growth rates from 2023 to 2025 were 56.1% and 22.41% respectively, with revenue shares rising to 22.2% and 27.3%. Dried plum snacks were the company's earliest product, divided into classic, special, and custom products. The classic series is well-known to customers, while the special series innovates to meet diverse consumer needs. For example, the crispy green plum was developed to satisfy consumers looking for a crispy texture and fresh flavor. The series has shown instability in sales volume and prices, with sales volume and prices in 2025 at 23.6 thousand tons and 35.2 yuan/kg respectively. Western plum products were introduced by the company in 2016, with three core series developed to cater to different consumer preferences. The product matrix includes classic dried plum products and "Ximei Fiberlife" coreless dried plum products aimed at consumers seeking diverse snacks. The series has shown a trend of "quantity and price increase", with sales volume and prices in 2025 at 9 thousand tons and 42.1 yuan/kg, respectively, with compound annual growth rates of 50% and 4.3% in the past three years. Plum jelly products were introduced by the company in 2019, positioned as low-calorie and convenient fruit jelly snacks made from natural ingredients. The series includes classic products, seasonal themed products, and electrolyte ice plum jellies, with plans to expand into various plum product categories such as candies, teas, ready-to-drink beverages, and seasonings. The series shows a trend of "increasing quantity and lowering prices", with sales volume increasing from 12.1 thousand tons in 2023 to 24.7 thousand tons in 2025, but prices decreasing from 25.7 yuan/kg to 18.8 yuan/kg. In terms of sales channels, Liumei's distribution network includes its own online store, supermarkets, membership-based stores, snack specialty shops, and distribution networks. As of 2025, the company had partnerships with two membership-based stores, 141 supermarkets, 109 snack specialty shops, and 1,439 distributors. The company's own online store and distributors have shown mediocre revenue performance, with declining revenue shares from 10.3% and 66.7% in 2023 to 7.5% and 31% in 2025. On the other hand, emerging retail channels (such as snack specialty shops and membership stores) have shown remarkable growth, with snack specialty shops growing by 3.84 times in 3 years with a compound annual growth rate of 120%, and revenue share increasing from 10.1% to 38%. The company provides differentiated custom products to snack specialty shops, catering to the consumption behavior of target consumers. The rapid expansion of snack specialty shop customers has led to a significant increase in customer concentration, with the top five customers contributing 14.2%, 33.1%, and 45.8% to revenue in 2023, 2024, and 2025, respectively. The rapid increase in customer concentration poses a certain level of customer dependency risk to the company's performance. Industry Leading Advantages but Cautions on Multiple Risk Points From an industry perspective, according to Frost & Sullivan, the market size of the Chinese fruit snack industry (by retail sales) was 52 billion yuan in 2024, with a compound annual growth rate of 8.3% over the past five years, expected to maintain mid- to high-single-digit growth by 2029. However, Liumei's three major product markets have all maintained double-digit growth rates, with compound annual growth rates over the past five years of 15.5% for green plum fruit snacks, 14.6% for western plum fruit snacks, and 14.9% for the jelly industry. The Chinese fruit snack industry market is relatively fragmented, with the top five market participants holding a market share of 14.5% in 2024, and Liumei ranking first with a 2.9% market share. The company has a certain industry position in each of the three major product markets, holding a 24.2% market share in the green plum fruit snack industry in 2024, and a 2.9% market share in the jelly industry, ranking sixth in the Chinese market. In addition to having a scale advantage, Liumei also leads in supply chain management within the industry. The company has built an integrated supply chain covering procurement to production management and strategically established production bases near major green plum production areas in southwest, south, and east China. Through cooperation arrangements with local plum farmers, the company provides them with advanced planting techniques, proprietary green plum varieties, and price stability support. However, the company faces two significant risk points: a low cash ratio and a declining trend in gross profit margin. The company's cash flow is not ample, and it faces significant short-term debt pressure. The company's current assets are mainly accounts receivable and inventory, accounting for nearly 80% of the total, with relatively limited cash on hand. From 2023 to April 2026, the company's short-term bank borrowings were 180 million yuan, 321 million yuan, 475 million yuan, and 516 million yuan, while cash and cash equivalents were 67 million yuan, 78 million yuan, 34 million yuan, and 35 million yuan, indicating low cash ratios. Due to fluctuations in product prices and promotional factors, the company's gross profit margin has been on a downward trend, reaching 40.1%, 36%, and 35.6% in 2023, 2024, and 2025 respectively. The gross profit margin for dried plum snacks decreased by 4.3 percentage points during the period, while the gross profit margin for Western plum products decreased by 5.4 percentage points and for plum jelly products decreased by 3.8 percentage points. In addition, the gross profit margin for all channels of sales declined, with the retail specialty shop, the core growth engine, seeing a decline of 5.3 percentage points to 35.2%. Although the overall gross profit margin has declined, the company has improved profitability through cost reduction and efficiency improvements. In 2025, the company's operating expense ratio (sales, administrative, and financial) was 23.21%, a decrease of 7.5 percentage points compared to 2023. While there was more room for cost optimization than the decline in gross profit margin, the company's shareholder net profit margin increased by 3.15 percentage points to 10.64% in 2025 compared to 2023, and the ROE reached 20.63%. In conclusion, Liumei has shown steady growth in performance, with its three major products driving growth. Western plum products have performed exceptionally well with continuous high growth in both quantity and price. Snack specialty shops have become a core growth point in distribution channels but have also led to increased customer concentration. The company has scale advantages and an optimized integrated supply chain, positioning it to benefit further from industry growth. With significant improvements in cost efficiency, the company has managed to increase profitability, maintaining a relatively high level of shareholder return. After three successful submissions to the Hong Kong Stock Exchange, Liumei has achieved its goal, but the company is not a high-tech enterprise and faces multiple risk points. The demand for financial investors to exit further weakens the company's attractiveness, and investors should approach with caution.