Hong Kong’s hyper-buoyant initial public offering market has raised hundreds of billions of dollars for China’s high-growth technology and industrial champions in the past year. Now there is an unusual addition to the listing frenzy: the world’s largest producer of caviar.
Xunlong Sci-tech is behind internationally renowned caviar brand Kaluga Queen
Investors are preparing for this month’s listing of Hangzhou Qiandaohu Zunlong Sci-Tech. The agriculture company’s planned $157 million IPO is another sign that China’s progress in innovation is going far beyond the usual tech suspects.
While China’s advances in electronics, AI, robots and electric vehicles have inspired a blaze of headlines, the country is also making strides in premium agricultural products, driven by decades-long, state-backed efforts in agricultural engineering technologies such as sturgeon genetic breeding.
Xunlong Sci-Tech has become the poster child for China’s agricultural success as supplies of caviar from Russia and Iran – traditionally the world’s two leading producers – have dwindled in recent years.
High-end foods such as foie gras and caviar from China are increasingly making their way into top-tier kitchens around the world due to their combination of relatively cheap price and good quality.
Zunlong Sci-Tech is behind the internationally renowned caviar brand Kaluga Queen, which is widely served in Michelin-starred fine dining restaurants from Paris to New York and celebrated by star chefs such as Alain Ducasse, according to the renowned French gastronomy guide.
The company operates from the eponymous freshwater Qiandao Lake in southern China, which boasts pristine water quality and a centuries-old sturgeon food culture.
According to data from the International Trade Center, today, 54% of the world’s commercial sturgeon farms are located in China, the share of Chinese caviar in global supplies will exceed 40% in 2024. Xunlong Sci-Tech, which has the largest sturgeon broodstock reserve globally, has more than 30% of the world market share. It has been the world’s largest producer of caviar for the last 11 years.
Demand is being driven by high net worth spending abroad, especially in the US, now its biggest market. The record-breaking AI-driven equity rally and generous tax cuts in the US have created a new class of affluent consumers with a huge appetite for luxury food.
In comparison, growth in China’s luxury market has slowed due to years of anti-corruption campaigns and a property crisis that has destroyed personal wealth.
The firm said most of the IPO proceeds will be used to expand its aquaculture base and production capacity over the next five years, as well as enhance its international sales channel.
Xunlong Sci-tech priced its IPO at HK$75.50 per share, raising 1.23 billion Hong Kong dollars, or $156.9 million. Trading of the shares is expected to begin on June 30, according to an exchange filing on Monday.
