Japanese ramen restaurant chain Ippudo seeks to list in Tokyo to raise funds for its international expansion.
Chikaranomoto Holdings, the operating entity of Ippudo, has filed an application with the Tokyo Stock Exchange to list as early as March.
The total market value of the initial public offering is estimated to be around 30 billion yen (US$261 million), according to Nikkei.
Company founder and current chairman Shigemi Kawahara opened his first ramen shop in 1985 in the Fukuoka Prefecture in southwestern Japan.
Ippudo started to expand overseas in 2008 with the opening of its first store in New York.
Chikaranomoto’s revenue rose 14 percent to 20.8 billion yen in the fiscal year ended March 31. That’s nearly double its sales of 10.7 billion yen in fiscal 2013.
The chain has been aggressive in expanding its presence in Asia.
It has seven shops in Hong Kong and 13 on the mainland, while it only has four shops in the United States and three in Europe.
It’s estimated the company derives about a third of its revenue from its overseas business, with the China market being the biggest contributor.
Proceeds from the IPO will be mainly used to expand its network in China.
The company plans to increase the number of overseas shops to over 200 by 2020 from around 60 at present. By then, the number of overseas shops will be almost double that of domestic shops.
Japanese cuisine is highly popular among Hongkongers, as many of them are quite receptive to anything related to Japanese culture.
Ippudo has done pretty well in Hong Kong, but mainland China, which has a population that is 200 times bigger, is a much bigger market.
What will be outlook of the China market for Ippudo? There’s probably no easy answer.
While some Japanese brands such as apparel vendor Uniqlo have been highly successful in China, others like Japanese noodle firm Ajisen Ramen haven’t been as lucky.
Ajisen restaurants have seen declining sales and profits in recent years.
Not only that. In times when diplomatic relations between China and Japan turned rocky, their shops were targeted by angry crowds participating in anti-Japan protests.
This article appeared in the Hong Kong Economic Journal on Jan. 12
Translation by Julie Zhu
[Chinese version 中文版]
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