Xiao Noodles Serves Up Record Profits and Aggressive Global Expansion

HONG KONG, March 30, 2026 – By Christine Carter

Guangzhou Xiao Noodles Catering Management Co., Ltd. (2408.HK) today announced blockbuster annual results for 2025, revealing a dramatic surge in profitability and scale that starkly contrasts with the headwinds buffeting many players in China's fiercely competitive restaurant industry. The self-proclaimed "First-listed Chinese Noodle Restaurant" reported a 74.8% year-on-year leap in net profit, signaling that its recipe of standardized operations and strategic expansion is paying significant dividends.

The company's revenue climbed an impressive 40.5% to RMB1,622.4 million, while net profit reached RMB106.1 million. Adjusted net profit, a non-IFRS measure that excludes certain non-recurring items, more than doubled, rocketing up 111.9% to RMB135.4 million. This robust financial performance was fueled by an aggressive expansion strategy that saw the company open 156 new restaurants in 2025, bringing its total network to 503 locations across Mainland China, Hong Kong, and Singapore.

Thriving Amidst Industry Restructuring

Xiao Noodles' remarkable growth comes during what the company itself describes as a period of "profound industry restructuring." China's catering market has become a battleground of "stock competition," where growth is no longer easy and chains fight intensely for existing customers. Recent industry data shows a challenging environment, with over a million restaurant closures in the first half of 2024 alone. Some major competitors, such as Jiumaojiu International, have reported shrinking restaurant networks and declining revenue, highlighting the immense pressure on operators.

Against this challenging backdrop, Xiao Noodles has not only survived but thrived. The company’s success appears partly driven by a consumer trend toward value, as diners become more price-sensitive without wanting to sacrifice quality. The chain’s average spending per order remained stable at a modest RMB29.9, yet its ability to attract customers improved significantly. Average daily orders per restaurant rose from 386 in 2024 to 406 in 2025, indicating that its offerings are resonating with a market seeking affordable, reliable dining options.

Same-store sales also remained robust, posting a 1.0% year-on-year increase, with average daily orders per same store jumping from 391 to 427. This demonstrates that the company is successfully growing its customer base within its existing footprint, not just through new openings.

The Engine of Growth: Standardization and Digitalization

A core element of the company's strategy is its reliance on a "standardized operational system." By developing proprietary systems for everything from supply chain management to staff training, Xiao Noodles has created a highly replicable single-store model. This operational efficiency is crucial for maintaining quality and consistency across its rapidly expanding network of 395 self-operated and 92 franchised restaurants.

The company’s self-operated restaurants remain its primary revenue engine, contributing RMB1,450.2 million, or 89.4% of total revenue in 2025, a 44.9% increase from the prior year. This growth underscores the success of its core business model.

Furthermore, Xiao Noodles has effectively capitalized on the shift toward digital convenience. Revenue from its delivery business as a percentage of total revenue grew sharply from 15.6% in 2024 to 23.3% in 2025. This rapid adoption reflects broader trends in the Chinese QSR market, where delivery has become a critical channel for growth. While still behind giants like Yum China, whose delivery sales constitute nearly half its revenue, the trajectory shows a significant and successful pivot towards this essential service.

A Blueprint for Global Ambition

While solidifying its domestic position, Xiao Noodles has firmly set its sights on international markets. The company's initial foray has yielded promising results, with 15 restaurants now operating in the highly competitive Hong Kong market and a flagship store established in Singapore. The company noted that the Hong Kong operations delivered an "outstanding" performance in 2025, validating its model's potential for cross-border replication.

This early success has emboldened the company to look further afield. With plans to expand into Southeast Asia, Xiao Noodles is joining a wave of Chinese F&B brands seeking growth abroad. The region's cultural affinity for noodle dishes and its growing middle class present a significant opportunity. However, success will depend on navigating intense local competition and adapting its offerings to diverse consumer tastes and regulatory environments.

Looking ahead, the company shows no signs of slowing down. It has announced plans to open between 150 and 180 new restaurants in 2026, a move that would push its total store count toward 700. This aggressive expansion, coupled with its international ambitions, signals a clear intent to cement its status not just as a leader in China, but as an emerging global QSR powerhouse.