Leading Chinese food chain franchise "Xiaocaiyuan" completes financing with exclusive investment by Harvest Capital

SHANGHAI,March 9,2023 --China's leading chain restaurant company,Xiaocaiyuan,which represents the new cuisine of Anhui,has announced the completion of a multi-million dollar financing round on March 9,2023. Harvest Capital,a top consumer-focused investment firm in China,led the investment.

Since its establishment in 2013,Xiaocaiyuan has been a leader in modernising Chinese-style dining,adhering to the business philosophy of "craftsmanship in cooking,sincere service,and caring for family with love". By providing customers with green,healthy,and nourishing dishes and high-quality services at affordable prices,Xiaocaiyuan has opened over 400 direct-operated stores in hundreds of cities in Anhui,Jiangsu,Shanghai,Beijing,Zhejiang,Hubei,Guangdong,and other regions,with more than 10,000 employees,and has become a leader in the Chinese leisure Chinese-style catering industry. Despite the repeated impact of the COVID-19 pandemic in 2022,Xiaocaiyuan achieved a revenue scale of nearly 4 billion yuan. With the pace of consumption recovery this year,the company is expected to have over 500 stores and revenue exceeding 5 billion yuan.

The Xiaocaiyuan project is another vital layout for Harvest Capital in the mass consumer sector in China. Harvest Capital has always adhered to the value investment philosophy,focusing on the consumer and modern service industries. It is one of the few value-creating funds in China with industrial investment capabilities that takes investment as a whole industry.

Since its establishment 16 years ago,Harvest Capital has invested in excellent projects such as Dongpeng Beverage,Babi Food,HOME ORIGINAL CHICKEN,Wenheyou,Qiaqia Food,Jiajia Food,and Laiyifen in the Food and beverage and catering fields,centred around "80% of consumer demand by 80% of consumers".

Today,with the overall pressure on China's economy,the urgent need to boost market expectations,and the need to restore consumer confidence,Harvest Capital's investment in Xiaocaiyuan fully reflects the firm belief and commitment of Harvest Capital to the Chinese catering industry and the entire Chinese consumer market.

Xiaocaiyuan is an excellent benchmark for Harvest Capital's concept of "entering into the world of ordinary people and empowering their lives". Positioned as a mass-market restaurant and community canteen,Xiaocaiyuan is closely related to people's daily lives and is responsible for creating consumer benefits. With ingenuity,it insists on on-site store production,providing customers with fresh,delicious,hygienic,and cost-effective home-style dishes.

The enterprise values of Xiaocaiyuan are to solve customer confusion and to provide customers with convenience,time-saving,and cost-saving services. The company makes three promises to its customers:

If a dish is not delivered on time,it will be free.

If a customer is unsatisfied with Food,it can be returned or exchanged unconditionally.

The company ensures the quality of ingredients and will compensate customers ten times if there are any issues.

Over the years,the company's adherence to customer value has won the trust of many consumers,resulting in rapid and natural growth.

Xiaocaiyuan is an active promoter of standardisation and modernisation in Chinese cuisine. According to Harvest Capital,in the context of overall sluggish growth in the catering industry,Xiaocaiyuanhas achieved high-quality growth against the trend,which is inseam its efforts in standardising and modernising Chinese cuisine. Regarding product research and development,the company continuously optimises its selection of ingredients,refines its processes and standards,and creates multiple hot-selling dishes. Regarding store operations,Xiaocaiyuan has developed mature function SOPs and business methodologies and continuously improved operating efficiency. In terms of the supply chain,the company has established an efficient procurement,central kitchen,and warehouse distribution network around its store layout,providing one-stop support services for stores nationwide. In terms of digitalisation,the company has launched information systems such as SAP and uses digital tools to improve store operations efficiency and corporate governance level. Extreme efficiency is the "confidence" that Xiaocaiyuan continuously creates in consumer benefits.

Xiaocaiyuan is a believer and pioneer in shared prosperity. Founder Mr. Wang Shugao once worked as a chef due to his family's poor financial situation. The initial intention of founding Xiaocaiyuan was to improve the status of chefs and servers,change their fates,and make them bosses. With the development of Xiaocaiyuan 's business,many excellent employees have become company shareholders and regard the company as their life career platform. Unique corporate culture,the founder's sharing spirit,and an advanced distribution system are the sources and necessary guarantees of Xiaocaiyuan's solid organisational strength.

Song Xiangqian,the founding partner of Harvest Capital,pointed out: "The future is no longer the era of businessmen,but the era of entrepreneurs. The ceiling of a brand is people's hearts. If we provide good products and services for consumers and the market,they will pay for it in the long term. We highly recognise Chairman Wang Shugao and his team. We believe that under their leadership,Xiaocaiyuan can lead the modernisation transformation of Chinese catering,continue to empower people's lives,create more consumer benefits,and lead more Xiaocaiyuan employees to common prosperity."

The next ten years will be the best investment opportunity for the catering industry. The head enterprises in various sub-sectors of China's catering industry will complete the chain,branding,modernisation modern capitalisation processes. As a "champion trainer" and business partner,Harvest Capital will accompany Xiaocaiyuan for the long term and devote itself to empowering the company's capacity improvement and system refinement. We believe that Xiaocaiyuan's goal can be achieved soon: wherever there are Chinese people,there is Xiaocaiyuan！