Two Sports Students Selling Dumplings Generate 2.5 Billion Yuan in Annual Revenue! Yuanji Food Apologized for "Earthworms and Flies" Before IPO

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Your local dumpling shop downstairs is going public!

Author | Liu Junqun

Editor | Liu Qinwen

"Get in the car for dumplings, get out for noodles," this saying engraved in the DNA of Chinese people reflects the special significance of dumplings in Chinese cuisine. It is both a symbol of reunion during festivals and a quick choice for daily meals. Now, this traditional food full of homey warmth has been brought to the capital markets by Yuanji Food.

Recently, Yuanji Food Group Co., Ltd. (hereafter "Yuanji Food") submitted an application for listing on the Hong Kong Stock Exchange, planning to list on the Main Board of Hong Kong.

Relying on dumplings and wontons, this company achieved annual revenue of over 2.5 billion yuan, with more than 4,200 stores, making it the largest dumpling and wonton enterprise in China and the Chinese fast-food chain with the most stores worldwide.

However, behind these impressive figures, there have been frequent food safety complaints, including controversies over foreign objects like worms and plastic pieces; and surprisingly, the leaders of this chain giant are two "post-90s" athletes. Can they help Yuanji Food overcome quality control challenges and step onto the capital market stage?

01

Sold approximately 15.2 million servings of fresh corn and meat dumplings!

Dumpling "King" rushes to IPO

In China, dumplings are more than just a food. Dumplings on New Year’s Eve symbolize bidding farewell to the old and welcoming the new; dumplings on the fifth day of the Lunar New Year symbolize attracting wealth; eating dumplings during the winter solstice in the north is also associated with the old saying "ears won't freeze." These deep-seated seasonal and daily emotions provide fertile ground for Yuanji Food’s growth.

Yuanji Food operates through "Yuanji Cloud Dumplings" and "Yuanji Flavor Enjoy" brands, covering both catering and retail consumption scenarios. In terms of product structure, Yuanji Cloud Dumplings focuses on five categories: dumplings, wontons, noodles, snacks, and beverages, managing about 350 SKUs, with around 50 varieties offered daily per store.

Yuanji Cloud Dumplings is the main driver, generating revenue of 2.495 billion yuan in 2024, accounting for 97.42% of total revenue. The brand mainly targets the consumer market, offering dine-in, ready-to-eat takeout/delivery, and fresh takeout services. Its revenue heavily depends on offline store networks—over 95% of revenue in 2024 came from stores, amounting to about 2.433 billion yuan. Thanks to its high-frequency, essential consumption attributes, Yuanji Cloud Dumplings has accumulated over 35 million loyal customers.

The retail brand "Yuanji Flavor Enjoy" serves as a supplement, mainly offering pre-packaged dumplings, wontons, and ingredients, covering supermarkets, online instant retail, and group catering B2B channels, meeting family cooking and group dining needs. In 2024, this brand achieved revenue of about 63.2 million yuan, representing 2.5% of the company's total revenue.

Source: "Prospectus"

Sales data of popular products are also impressive. By the end of September 2025, approximately 4,217 tons of raw and 15.2 million servings of cooked corn and meat dumplings had been sold; the fresh shrimp and crab roe wontons, featuring "whole fresh shrimp," had sold about 2,368 tons of raw and 30 million servings of cooked products. These products are priced at accessible levels, e.g., fresh corn and meat dumplings raw version at 19.8-23.8 yuan per jin, cooked at 15-25 yuan per serving.

Affordable pricing and consistent taste have helped Yuanji build a large membership base. By September 2025, membership exceeded 35 million, with an average quarterly repurchase rate of about 32.3%.

Supporting this nationwide business is Yuanji Food’s rapidly expanding store network. As of the same period, the total number of stores reached 4,266, with over 95% franchised. Not only is it China’s largest dumpling and wonton enterprise, but also the largest Chinese fast-food chain globally by store count.

This extensive network has driven its total GMV (Gross Merchandise Volume) from stores from 4.772 billion yuan in 2023 to 6.248 billion yuan in 2024. By the end of September 2025, total store GMV had reached 4.789 billion yuan.

Source: "Prospectus"

However, the company's expansion pace has become noticeably more cautious. In 2023, 1,226 new stores opened while 81 closed, netting an increase of 1,145 stores—new openings were 15 times the closures; in 2024, new openings dropped to 1,057 with 254 closures, net increase down to 803, a 213.6% year-over-year increase in closures; in the first three quarters of 2025, 481 new stores opened and 160 closed, with a net increase of only 321 stores.

While refining domestic operations, Yuanji has also begun testing overseas markets, currently operating five stores in Singapore.

Additionally, store structure continues to shift downward. By September 2025, 2,150 stores (51%) were in first-tier cities, but 1,121 stores (26.6%) were in third-tier and below cities, a 6.8 percentage point increase from 2023, with faster growth than in high-tier cities.

Beyond dine-in, delivery is becoming an increasingly important channel. By September 2025, delivery GMV grew 46.6% year-over-year to 2.136 billion yuan, accounting for 44.6% of total GMV, up from 32.4%.

Overall, in 2023 and 2024, Yuanji Food’s revenue was 2.026 billion yuan and 2.561 billion yuan, respectively; in the first nine months of 2025, revenue reached 1.982 billion yuan, an 11% increase over the same period last year, showing continuous growth.

Source: "Prospectus"

Net profit has fluctuated. In 2023, net profit was 167 million yuan; in 2024, it declined to 142 million yuan, a 15% decrease; in the first nine months of 2025, net profit was 142 million yuan.

This volatility mainly relates to rising expenses. While operating income grew 26.4% in 2024, sales and marketing expenses soared to 126 million yuan, a 63% increase; administrative expenses also rose 20.1% to 239 million yuan. The significant increase in these costs has somewhat impacted profitability.

However, alongside rapid growth, food safety issues have raised red flags.

02

Spending 126 million yuan annually on sales and marketing

Frequent food safety issues attract attention

The "Prospectus" shows that from 2023 to 2024, the company's sales and marketing expenses surged 63.58%, from 77 million yuan to 126 million yuan, highlighting a stark contrast between high marketing investment and food safety management.

Specifically, sales and marketing expenses mainly include advertising and promotion, employee wages, warehousing and logistics, share-based payments, transportation and travel, and depreciation and amortization. Among these, advertising and promotion expenses jumped from 17.19 million yuan to 45.05 million yuan, increasing their proportion from 22.3% to 35.7%. Employee wages increased slightly from 31.47 million to 35.25 million yuan, but their share decreased from 40.9% to 28%.

The "Prospectus" notes that future sales and marketing expenses may further increase, but such investments may not achieve expected results; if risks materialize, the company's business and performance could be significantly adversely affected.

To support large-scale expansion, Yuanji Food has established a relatively complete supply chain system: 24 warehouses nationwide provide timely delivery to about 4,000 stores; they adopt industry-rare full cold-chain logistics, covering central factories, warehouses, and store delivery, with real-time temperature monitoring; in 2024, inventory turnover was 12.1 days, much better than the industry average of 25 days, with nearly 70% of core raw materials in stores being "two-day delivery" to ensure freshness.

However, food safety issues at franchise stores remain frequent, becoming an invisible barrier to expansion.

According to "Upstream News," in September 2023, a store in Zhuzhou, Hunan, was caught packaging dumplings in an environment full of flies, with no timely measures taken. The brand responded that disinfection and training had been strengthened, and fly-proof facilities would be added. Yet, in November 2024, another netizen posted photos of flies in the filling area of a store.

Moreover, the core selling point of "freshly made on-site" has faced controversy over pre-made dishes. In September 2023, some netizens questioned whether the filling was frozen-thawed and the dumpling wrappers were half-year-old frozen products, alleging "false advertising."

Yuanji Cloud Dumplings' spokesperson responded that they use a central kitchen delivery system, with meat filling transported under the same process as supermarket fresh meat, taken daily from freezers and distributed to stores, which then trended on hot searches.

The most concerning incident was the "foreign object controversy" in 2024. In November, a consumer in Haidian District, Beijing, found a 3 cm long black-purple worm in a bowl of fresh meat wonton noodles at Yuanji Cloud Dumplings' Liudaokou store. The brand responded that they had settled with the customer, the store was rectified for a week, and the store manager was dismissed.

This was not an isolated case. Within a month, another consumer reported finding a whole reddish-brown worm in lettuce, raising doubts about ingredient washing.

On the Black Cat Complaint platform, many consumers reported food safety issues. In April 2025, a customer in Taiyuan found plastic glitter in crab roe wontons; the store admitted it was due to staff mishandling but did not compensate as per food safety law. In June, a customer reported insufficient quantity and small stones in fresh shrimp and crab roe wontons, with the merchant refusing to communicate. In August, a Huizhou store's delivery dish was found to contain insects, which staff dismissed as "delivery items." In October, a Guangzhou store's wontons showed suspected moldy black spots; the store claimed it was "seaweed" and refused consumer requests.

Source: Black Cat Complaint

In December, Beijing Haidian Market Supervision Bureau announced an investigation into Beijing Fuxue Catering Management Development Co., Ltd. ("Yuanji Cloud Dumplings") for food containing foreign objects; the brand issued an apology, reaffirmed suspension and rectification, dismissed the store manager, and launched an internal review.

As of March 10, 2026, about 389 complaints related to Yuanji Cloud Dumplings had been recorded on the Black Cat platform, with "foreign objects" being a high-frequency keyword.

Food industry analyst Zhu Danpeng believes that as food safety issues continue to emerge, the company has lost its original quality image. These numerous quality problems could impact its IPO prospects.

However, in response to consumer complaints, Yuanji Food disclosed a standardized handling process in the "Prospectus": feedback is received through multiple channels, franchisees are required to report promptly, each complaint generates a tracking work order, and the service team intervenes to diagnose and supervise resolution. The company also states that historically, no major customer complaint events have significantly affected its operations.

While investing heavily in marketing and rapid store expansion, frequent food safety issues and franchise management pressures test the governance capabilities of Yuanji Food’s leadership.

03

"Post-90s" athletes selling dumplings

Backed by Hei Ant Capital

Behind Yuanji Food’s more than 4,000 stores is a startup team composed of former athletes. Founders Yuan Lianghong and co-founder Tian Wei, college classmates, spent over a decade transforming a street-side dumpling shop in Guangzhou into China’s largest fresh water dumpling brand.

36-year-old Yuan Lianghong, born around 1990, holds a bachelor's degree in physical education from Xiangxiang College of Hunan University of Science and Technology. According to "Upstream News," in 2012, Yuan Lianghong moved from Changsha to Guangzhou, opening his first dumpling shop in Liwan District.

His college classmate, also a sports major, Tian Wei, is his co-founder. The two are only three months apart, and investors call them "brothers back-to-back."

In 2017, Yuanji Food was officially established, with Yuan Lianghong serving as executive director, chairman, and CEO, and Tian Wei as executive director and deputy general manager, mainly responsible for overseas expansion.

Capital’s favor has accelerated Yuanji Food’s growth. According to the "Prospectus," the company completed multiple funding rounds in June 2023, September 2025, and December 2025, raising over 400 million yuan in total, with investors including Hei Ant Capital, Qicheng Capital, Xiamen C&D, Yihai Kerry, and others.

This image may be AI-generated

Source: Can Headline Library

Notably, Yihai Kerry, the parent company of Golden Dragon Fish, is a leading enterprise in China’s grain, oil, and food supply chain.

Regarding ownership structure, as of January 5, 2026, Yuan Lianghong directly and indirectly controlled 82.54% of voting rights through his holdings and related investment platforms. Hei Ant Capital owns about 6.06%, making it the largest institutional investor. Other investors like Xinghan Chuangxiang, Shanghai Niaowo, Lingyue Meiwai, and subsidiaries of listed companies like Golden Dragon Fish and Xiamen C&D also participated in the B+ round, though specific share ratios are undisclosed.

Yuan Lianghong’s business empire extends beyond Yuanji Food.

"Tianyancha" shows that he personally owns 99% of Guangdong Yuanji Investment Co., Ltd., and jointly holds shares with this company and others in Guangdong Yuanji Food Group Co., Ltd., with his personal stake about 25.7%.

Through this company, Yuan Lianghong has invested in 29 enterprises, 13 of which are wholly owned, including Suzhou Yuanliang Food and Guangdong Yuanhong Food, mainly supply chain companies, with 12 still active. He also serves as legal representative or senior executive in 10 companies, forming a diversified business matrix centered around dumplings.

This image may be AI-generated

Source: Can Headline Library

From a small shop in Guangzhou’s Liwan District to a candidate for Hong Kong IPO, Yuanji Food has secured its position with 4,200 stores and 35 million members. However, the franchise model, while enabling scale, also presents risks—food safety controversies and management challenges. For Yuanji Food, going public is not the end but a new, more rigorous beginning. Have you tried Yuanji Cloud Dumplings? How do they taste? Feel free to leave your comments below.

Author’s note: Personal opinions are for reference only.