On December 19, 2023, Xiaocaiyuan, a leading enterprise in China's restaurant chain industry, announced the completion of a new financing round, with Harvest Capital, a top-tier institution in China's consumer sector, as the investor. This marks Harvest Capital's second investment in Xiaocaiyuan following the first financing round completed in March this year. As Xiaocaiyuan's exclusive investor, Harvest Capital's cumulative investment amounts to RMB 500 million—the largest financing in the mass-market affordable dining sector in recent years.

Xiaocaiyuan is the absolute leader in the rapidly developing mass-market affordable Chinese dining track, with over 500 restaurants, leading the industry in business scale, growth rate, and store efficiency. Since its establishment in 2013, Xiaocaiyuan has adhered to being consumer-centric, with standardization as its foundation, digitalization as its driving force, intelligence as its means, and industrialization as its direction, fully serving the essential, high-frequency, and rapidly growing demand for mass-market affordable dining, establishing Xiaocaiyuan as a widely recognized "family kitchen" for Chinese households.

In the unfavorable environment of slow recovery in China's consumer market and overall lackluster growth in the restaurant industry, Xiaocaiyuan's economic indicators for the first three quarters of 2023—including store count, same-store sales, per-employee efficiency, and per-square-meter efficiency—continued to optimize. Xiaocaiyuan's counter-cyclical growth fully validates the effectiveness of the company's long-term strategy of focusing on mass-market affordable dining and concentrating on extreme value for money. Xiaocaiyuan management's deep understanding and strong execution of restaurant modernization and standardization serve as effective guarantees for this core strategy, enabling the company to continuously provide consumers with "delicious yet affordable" dishes and quality services.

China's economic and social landscape is experiencing complex and profound historic changes, with the future highly likely to enter a low-desire society with insufficient effective demand and declining per capita purchasing power. Chinese consumption exhibits characteristics of transitioning from the third to the fourth consumption era, with consumers' simple and practical consciousness comprehensively and profoundly influencing the development trends of China's restaurant industry. Mass-market affordable dining services possess essential, high-frequency, and extreme value-for-money characteristics, representing the direction of the "quality and affordability" quality revolution, perfectly aligning with the future development trends of China's restaurant industry and the overall consumer sector.

As Xiaocaiyuan's exclusive external investment institution, Harvest Capital firmly believes in the long-term value and inherent potential of China's consumer sector. Harvest Capital is convinced that mass-market, essential, high-frequency, extreme value-for-money mass livelihood consumption will constitute the mainstream and foundation of China's future society—a long runway with thick snow, a major track. Mass livelihood consumption aligns with the needs of the times. The healthy development and efficiency advancement of the mass livelihood consumption industry and leading enterprises can better satisfy ordinary people's intrinsic upgrade needs "from affordability to quality," continuously creating consumer welfare, possessing extremely strong social value.

The Central Economic Work Conference held recently pointed out that China's economy currently faces difficulties and challenges including insufficient effective demand and weak social expectations. Harvest Capital's large-scale, multi-round investment in Xiaocaiyuan reflects Harvest Capital's determination to firmly believe in China's long-term economic potential and resilience, and even more reflects Harvest Capital's courage to invest heavily in China's mass livelihood consumption for the long term, which can greatly boost society's confidence in the restaurant sector and all of Chinese consumption.

In the capital market atmosphere of "hot technology, cold consumption," many consumer investment institutions have chosen to de-emphasize consumption, instead chasing new industry trends. Harvest Capital has resolutely chosen to persevere. Mr. Alan Song, Chairman of Harvest Capital, points out that consumption and technology are two sides of the same coin in economic and social development, and the two most important elements in the national economy—technological progress and consumption support. Consumption creates application scenarios for technology; the two are not in opposition.

Xiaocaiyuan is an excellent example of effectively combining technology and consumption. The company places great emphasis on digitalization and intelligence, fully developing a business intelligence insight system centered on data assets, actively building an integrated online-offline business intelligence operating platform and smart stores. In recent years, the company has successively launched SAP systems, CRM membership systems, BI systems, integrated business-finance systems, supply chain SCM systems, online travel management systems, and more, with business operations online, user digitalization, operational digitalization, and supply chain digitalization serving as escorts for the company's core strategic implementation.

Mr. Alan Song, Chairman of Harvest Capital, stated: "Today's business competition essentially competes for entrepreneurs' cognition, and even more for entrepreneurs' character and altruistic spirit. To become long-term sustained business winners requires training driven by altruistic spirit to address shortcomings and practice internal skills. This reflexivity will obviously drag down enterprise development in the short term but represents high-dimensional wisdom that plans before acting in the long term. From Chairman Wang Shugao and the Xiaocaiyuan team, we see this wisdom."

This high-dimensional wisdom drives Xiaocaiyuan not to be satisfied with existing achievements. Based on accumulated advantages in supply chain, product strength, and digitalization, the company will increase exploration of community affordable dining formats, aiming to achieve convenience and benefit for the people on a larger scale and to a greater degree. The company aspires to bring mass-market affordable dining into thousands of households, toward thousands of cities and tens of thousands of stores, making Xiaocaiyuan a livelihood infrastructure-level community dining provider and a lifestyle for Chinese people.

The RMB 1.2 trillion mass-market affordable Chinese dining market is the largest subdivided sector in China's restaurant market and is rapidly rising with enormous dividends and broad prospects. Xiaocaiyuan will continue to firmly grasp the development trends of mass-market affordable Chinese dining and cultivate it deeply, with a continuously improving modern scientific management system as the core focus, enhancing a business intelligence insight system centered on data assets, completely upgrading the core driving force of the company's value development to "driven by modern management science," further comprehensively improving management capabilities and efficiency, continuously creating consumer welfare, and achieving "ubiquitous coverage" and "towering achievement" with vigorous vitality that transcends economic cycles.

Xiaocaiyuan perfectly matches Harvest Capital's investment criteria of "good industry, good company, good people." As a "champion sparring partner" and business partner, Harvest Capital will accompany Xiaocaiyuan long-term, dedicating full efforts to empowering Xiaocaiyuan's capability enhancement and systematic improvement, helping Xiaocaiyuan's business objectives be realized soon:

Xiaocaiyuan wherever there are Chinese people!