A signing ceremony has quietly positioned a company intimately familiar to the soles of many Chinese feet at the doorstep of the Hong Kong Stock Exchange.

Recently, China-Thailand International and Shandong Huaxia Liangzi Health Management Co., Ltd. (hereinafter referred to as "Huaxia Liangzi") formally signed an IPO sponsorship agreement. This signifies that this foot massage and wellness giant, which started in Jinan and now boasts over 400 stores, is officially launching its bid to become the "first stock in foot therapy and wellness."

Currently, the shareholding of Huaxia Liangzi's management is highly concentrated, far exceeding the requirements set by the Hong Kong exchange. Some institutional analysts suggest that Huaxia Liangzi will most likely need to introduce strategic investors in a Pre-IPO round to dilute management's stake to below 75%; otherwise, the dilution effect from the IPO would be excessive.

More pressing is the issue of labor compliance. An internal source informed the reporting team that many Huaxia Liangzi outlets operate under a "direct-operation franchise" model, where franchisees provide capital and cover costs like labor and rent but do not directly manage operations. Data from Tianyancha shows that the company's disclosed annual social insurance contributors number around 300. The aforementioned institutional source noted that issues like social insurance contribution rates and the proportion of labor dispatch workers are likely to be focal points of Hong Kong exchange inquiries.

Furthermore, an examination of consumer complaint platforms reveals that Huaxia Liangzi has long faced consumer disputes over high-pressure sales tactics, as well as controversies regarding therapist professionalism and service attitude. Some consumers have even reported injuries from massage sessions. With capital market ambitions on one side and the dual challenges of compliance and reputation on the other, Huaxia Liangzi's path to listing is far more complex than simply "washing feet."

Accelerated Listing Timeline, Insiders Suggest a Year at Minimum

According to media reports, back in 2017, the "second-generation" successor and Chairwoman Shi Lei mentioned a plan to initiate a public listing within 2 to 3 years. In the following years, the company's capital market preparations progressed steadily.

By the end of 2024, Huaxia Liangzi applied to establish Haohong Investment Limited in Hong Kong. In April of the following year, this entity was officially registered, becoming the core offshore holding platform for the overseas listing. In April 2026, the company explicitly stated a preference for candidates with IPO project experience when hiring a financial manager, further signaling an acceleration of listing plans.

Regarding the progress of Huaxia Liangzi's listing process, Li Yingjie, head of Mingdehui, analyzed for the reporting team that the journey from signing the sponsorship agreement to the official listing involves multiple stages. "First is due diligence and guidance, where investment banks and auditors examine three years of accounts, labor contracts, and social insurance contributions, a process taking at least two to three months."

"Next is filing with the China Securities Regulatory Commission, known in the industry as obtaining the 'green light.' Then comes submitting the A1 application (the formal listing application form) to the Hong Kong Stock Exchange, followed by several rounds of Q&A." Li Yingjie also mentioned the fourth stage is the hearing; only after passing can the prospectus be published, followed by the roadshow, pricing, and listing.

"If the review is not completed within six months after the A1 submission, the prospectus automatically expires, requiring resubmission and updated audit data, which increases costs and causes delays. If Huaxia Liangzi takes too long in the financial compliance stage, this risk cannot be ignored. Overall, for this type of service company, the process from signing to listing would take at least nearly a year at the fastest," Li Yingjie stated.

Third-party data indicates that the Chinese massage and foot therapy industry's market size is projected to reach 7 trillion yuan in 2025, with nearly 250 million users. However, this is also an intensely competitive market. The top ten brands' share of orders has consistently remained between 8% and 9%, with over 90% of the market divided among neighborhood mom-and-pop shops and small-to-medium-sized chains.

Against this backdrop, capital has become one of the moats for leading brands. In fact, Huaxia Liangzi is not the first foot therapy company attempting to knock on the capital market's door. Before it, Chongqing Fuqiao tried to list in Australia but was eventually delisted after failing to disclose its 2018 interim report on time despite repeated催促 from the ASX. Another well-known industry player, Yierkang, initiated A-share listing guidance as early as 2020 but has yet to submit a prospectus.

The reporting team attempted to contact Huaxia Liangzi through various channels for comment on the listing matter but had not received a response by the time of publication.

Highly Concentrated Ownership and Pending Compliance Challenges

As early as the late 1990s, when foot therapy was still considered a low-end "foot-washing parlor" service by many, Huaxia Liangzi's founder, Shi Yingjian, began exploring chain operations.

In 1997, Shi Yingjian, who came from a finance background, opened the first 190-square-meter store in Jinan. The following year, he rapidly expanded to Qingdao, Beijing, Zhengzhou, and other cities, initiating a cross-regional expansion that was extremely rare for that era and promoting standardization within the foot therapy industry.

In 2010, Shi Yingjian retired, and his daughter, Shi Lei, officially succeeded as Chairwoman, leading three major transformations for Huaxia Liangzi: scale expansion, category diversification, and digital operations. To date, Huaxia Liangzi has over 400 stores spread across cities nationwide and dozens of countries in Europe and America, with an annual customer base exceeding ten million. The company has also developed multiple sub-brands, including Jiujiuji, Cidihuakai, Benzheng Yidao, Naguan, and others. Its business has expanded from traditional foot therapy and SPA to include traditional Chinese medicine physiotherapy and biotechnology.

However, to list successfully, Huaxia Liangzi faces several thorny issues. Tianyancha data shows the company's current ownership is highly concentrated, with Shi Lei personally holding a direct stake of 99.9%. Hong Kong listing rules explicitly require listed companies to have a public float of at least 25%, which can be reduced to 15% for larger market capitalizations.

Li Yingjie stated that with the founder holding 99.9%, relying solely on issuing new shares in the IPO to meet public float requirements would cause excessive dilution. Therefore, Huaxia Liangzi will most likely introduce a round of strategic investors to dilute the founder's stake to 75%-80%, then issue about 20% new shares in the IPO, just meeting the regulatory threshold. A Pre-IPO financing round can not only expand store count and revenue scale in advance but also benefit subsequent pricing.

He estimates that for a company of Huaxia Liangzi's size, the Pre-IPO round would likely involve selling 10% to 15% of shares, completed 3 to 5 months before the formal application. Introducing one or two well-known consumer or healthcare funds would be more conducive to telling a growth story to the capital market post-listing.

Additionally, labor compliance is another focal point in Huaxia Liangzi's operations. "Hong Kong exchange inquiries are extremely detailed; social insurance contribution rates, whether labor dispatch exceeds proportions, and whether franchisee revenue is consolidated are all mandatory questions," Li Yingjie said.

An internal source at Huaxia Liangzi told the reporting team that the company's stores adopt a "direct-operation franchise" model. Franchisees primarily act as financial investors, while the specific store operations and personnel management are handled by Huaxia Liangzi.

The source revealed that franchisees bear all operating costs like store rent and employee salaries. Huaxia Liangzi's fees mainly consist of two parts: first, an area-based加盟费, roughly several hundred yuan per square meter, amounting to about 500,000 yuan for an 800-square-meter store; second, a later management fee, charged at 8% of the store's revenue.

Frequent Complaints and Brand Management Pressure

Beneath the光环 of vying for the "first foot therapy stock," issues of consumer complaints and brand management control warrant equal attention. On consumer complaint platforms, disputes over membership card consumption are the most prominent issue for Huaxia Liangzi. Multiple consumers have reported that stores engage in persistent, high-pressure tactics to push card purchases, with continued promotion even after explicit refusal during service, negatively impacting the experience.

"My friend and I used a group-buy coupon at the Huaxia Liangzi Nanjing Huamao Center store. During the service, the therapist tried to sell us a充值 activity. After we refused, the therapist called the store manager, who continued aggressive sales. We explicitly refused again, but the manager wouldn't leave. Together with the therapist, they pressured us repeatedly using business pressure as a reason, implying we couldn't stay if we didn't buy the card," one consumer complained.

Controversies over therapist professionalism and service attitude also persist. Some consumer complaints mention that certain therapists' techniques involve inappropriate force, leading to physical discomfort or aggravated pain.

"After the massage, I noticed a large, rapidly swelling lump at the original按摩部位 on my leg, accompanied by severe pain and limited movement. Seeing this, the staff member knew they were at fault, did not deduct the fee from the membership card, and accompanied me to the hospital emergency room," one consumer stated.

Beyond frequent consumer complaints, Huaxia Liangzi has also been involved in several operational disputes, the most notable being its entanglement with iQiyi Inc.. According to public judicial information, in 2022, iQiyi sued Huaxia Liangzi over copyright issues.

The origin of this dispute was an iQiyi-exclusive film, "The Golden Job." Because a Huaxia Liangzi store allowed on-demand and complete playback of the film via a TV box in the store, iQiyi sued Huaxia Liangzi for infringement of the right to network dissemination of works.

At the time, Huaxia Liangzi argued that the store in question was a franchise outlet. However, the court determined that Huaxia Liang子, through its franchise system, exercised control over the products and services of franchise stores and should bear responsibility for the infringement. Ultimately, the court ordered Huaxia Liangzi to compensate iQiyi for economic losses of 30,000 yuan and reasonable expenses of 50 yuan.