On January 16, 2026, the domestic pizza brand Big Catering International Holdings Ltd. officially submitted its application for a main board listing on the Hong Kong Stock Exchange. Leveraging its "affordable buffet" model, Big Pizza achieved revenue of 1.389 billion yuan in the first three quarters of 2025, with its store count expanding to 387. However, underlying issues such as declining profit margins, potential food safety hazards, and the risks associated with its highly leveraged expansion strategy cast a shadow over this capital market endeavor.
The dilemma of increasing revenue without corresponding profit growth is starkly evident, as price wars continue to erode profitability. While Big Pizza's revenue climbed from 944 million yuan in 2023 to 1.389 billion yuan in the first three quarters of 2025, its net profit margin concurrently dropped from 5.0% to 3.7%. A more profound issue lies in the side effects of its "volume-for-price" strategy: the average customer spending per ticket in company-owned stores fell from 70.9 yuan in 2023 to 62.8 yuan in 2025, and the average order value for delivery plummeted even more sharply from 60.7 yuan to 34.7 yuan. Although price reductions helped boost the table turnover rate to 5.7 times per day, intensifying cost pressures—with raw materials accounting for 49.1% of costs, and labor and rent combined exceeding 33%—severely squeezed profit margins.
The financial risks embedded in Big Pizza's aggressive expansion strategy are significant, highlighted by a 93% debt-to-asset ratio and looming liquidity concerns. The company plans to add 610 to 790 new stores between 2026 and 2028, more than doubling its current footprint. Yet, this ambition is built on a fragile financial foundation: as of September 2025, the company's debt-to-asset ratio stood at a high 93%, and its net current liabilities surged 70% from the end of 2024 to 275.8 million yuan. Its cash flow is heavily reliant on supply chain credit terms, with trade payables swelling by 143% over 21 months to 192 million yuan, effectively using supplier funds as an interest-free loan. With cash on hand of just 95.36 million yuan and annual operating cash flow of approximately 71.2 million yuan, it falls significantly short of covering the annual average of 300 million yuan required for new store investments.
Food safety vulnerabilities and governance concerns present further challenges, particularly under a family-controlled management structure struggling to keep pace with rapid growth. During its swift expansion, Big Pizza's quality control systems have repeatedly shown weaknesses. In August 2024, a store in Beijing's Dongcheng District was ordered to rectify food safety issues and received a warning; furthermore, in 2025, multiple complaints about foreign objects were logged on the Hei Mao consumer platform, with customers in cities like Harbin and Jinan reporting gastroenteritis symptoms after dining. More notably, governance structure risks are a concern: the Zhao Zhiqiang family collectively controls 86% of the voting rights, with the founder couple serving as Chairman and CFO, respectively. This highly centralized family governance model appears ill-suited to support the standardized management demands of a thousand-store scale, an issue underscored when the founder publicly criticized hygiene problems during store inspections, exposing a disconnect between headquarters and store-level execution.
Big Pizza also faces structural bottlenecks characterized by a "strong in the north, weak in the south" regional imbalance, with its expansion into southern markets encountering resistance. As of September 2025, over 60% of its stores were concentrated in North and Northeast China, while in 12 southern provinces, including Guangdong and Zhejiang, store counts were fewer than 10 each. The southern market is already dominated by established players like Saizeriya and Zunbao Pizza, whose high-efficiency, small-store models (Zunbao's average ticket is 31 yuan) put pressure on Big Pizza's 67-yuan buffet套餐. Additionally, the buffet model conflicts with the southern preference for "small-portion" dining habits, and the company's supply chain has insufficient coverage in the south, with cold-chain logistics radius limitations further hindering regional breakthroughs.
Big Pizza's IPO application represents a classic case of a traditional餐饮 enterprise seeking a quantum leap in scale through capital market forces. While it has validated its business model's viability in regional markets through its affordable positioning and founder IP marketing, its high-leverage expansion, weak profitability, and lagging governance capabilities expose it to the curse of "diseconomies of scale." Unless it can build a sustainable profit model post-listing, break down regional barriers, and enhance quality control stability, infusions of capital market funds may ultimately fail to alleviate its long-term survival anxieties.
Note: This article was generated with the assistance of AI tools and does not constitute investment advice. Market risks exist; investment requires caution.