After Failing in A-Shares, "Fruit Giant" Xinrongmao Turns to Hong Kong Stocks, Earning Over 800 Million Yuan in Less Than 3 Years, with Lenovo Holdings as the Major Shareholder Behind the Scenes

This article is sourced from Times Finance. Author: Chen Zexuan

Image source: TuChong Creative

After the failure of A-share listing plans, Lenovo Holdings (03396.HK) is shifting its fruit business to the Hong Kong Stock Exchange.

Recently, Lenovo Holdings announced that to promote the listing of its indirectly wholly-owned subsidiary Xinrongmao Fruit Industry Technology Group Co., Ltd. (hereinafter referred to as “Xinrongmao”) and to facilitate the capitalization of its fruit segment, it plans to jointly acquire shares through Xinrongmao, KuaWo Group, and its subsidiaries KuaWo Nongtou and KuaWo Agriculture (collectively “KuaWo”) to enable some shareholders to exit Xinrongmao and XinGuo Jiayuan.

KuaWo Group and Xinrongmao are the main entities in Lenovo Holdings’ fruit business. KuaWo Group mainly engages in fruit, animal protein, deep-processed foods, and comprehensive ingredient supply chain businesses, with Lenovo Holdings holding 89.18%. Xinrongmao, founded in 1998, is a leading company in the fruit supply chain, covering fruit variety introduction and licensing, professional supply chain services, omnichannel distribution, product development, and branding.

In 2015, Lenovo Holdings invested in Xinmaoyuan, currently indirectly holding 39.46% through KuaWo Group subsidiaries; XinGuo Jiayuan is a brother company of Xinrongmao, with overlapping shareholders, and Lenovo Holdings is also the largest shareholder of XinGuo Jiayuan.

Previously, Xinrongmao attempted to list on the A-share market but failed, and its Hong Kong listing plan was also rejected by shareholders, resulting in the company’s value not being effectively realized, and some shareholders strongly wishing to exit. Now, Lenovo Holdings’ series of actions regarding Xinrongmao aim to clear obstacles for its Hong Kong listing.

According to the latest plan, Xinrongmao must complete a qualified listing application before September 30, 2027, and go public before December 31, 2027. If these targets are not met, Lenovo Holdings has the right to require Xinrongmao’s management to buy back all its shares, fully exiting the investment.

Regarding the listing issues, Times Finance has contacted Lenovo Holdings and Xinrongmao but has not received a response as of press time.

Clearing the way for Hong Kong IPO

The fruit business is one of Lenovo Holdings’ diversified segments. In 2010, Lenovo Holdings established an agricultural investment division, and in 2012, it formed KuaWo Group to enter the fruit industry, launching the “Liutao” kiwi brand named after founder Liu Chuanzhi in the following year.

At that time, Xinrongmao, founded in 1998 by Liao Maohua, was already a leading company in the industry. Liu Chuanzhi, eyeing the large fruit market, quickly extended an olive branch to Liao Maohua. In 2015, KuaWo Group merged its subsidiaries’ equity holdings to acquire new shares issued by Xinrongmao, achieving a business integration in the fruit segment.

Soon after, Lenovo Holdings began considering listing Xinrongmao. In 2019, Anxin Securities, as a guidance institution, announced the filing of Xinrongmao’s initial public offering and listing guidance with the China Securities Regulatory Commission’s Shenzhen bureau.

Times Finance learned that the guidance process had at least 16 sessions, ongoing until 2023. However, the long-standing dream ultimately did not materialize, and now both parties are deepening their cooperation to prepare for listing.

According to the agreement, Xinrongmao will buy back 57.5319 million shares from shareholders Junlian Shengyuan, Xiamen C&D, and Longmen Fund at a total price of 1.086 billion yuan, representing 14.13% of equity. Additionally, Xinrongmao plans to repurchase 10.1256 million shares held by Suying Shengfeng, accounting for 2.49%.

Subsidiary KuaWo Nongtou, at a total price of 420 million yuan, will acquire 19.7534 million shares from rural industry funds. After the transfer, KuaWo Nongtou and its wholly owned subsidiary KuaWo Agriculture will hold a total of 180 million shares, increasing their stake to 44.32%.

Furthermore, Lenovo Holdings’ indirect subsidiary KuaWo Chanfaxin will acquire a total of 10.64% of XinGuo Jiayuan shares from Longmen Fund, Xiamen C&D, Junlian Capital, and Junlian Shengyuan for 121 million yuan. After the acquisition, KuaWo Nongtou, KuaWo Agriculture, and KuaWo Chanfaxin will hold 76.01% of XinGuo Jiayuan.

To deepen ties with founders and senior management, Xinrongmao plans to use 26.8774 million shares from its initial buyback for equity incentives for management, including Zhang Jian, Liao Maohua, Qu Yitian, and Qu Xintong (“Xinrongmao management”). Times Finance understands that Zhang Jian is Xinrongmao’s Chairman and CEO; Liao Maohua is the founder and honorary chairman; Qu Yitian is Vice President; Qu Xintong is Qu Yitian’s daughter.

The announcement states that the equity incentive grant price is based on the latest 2022 team incentive price (7.5 yuan/share) and Xinrongmao’s net assets of 2.7 billion yuan at the end of 2022, with the company’s overall valuation estimated at 5 billion yuan.

Three-year net profit exceeds 800 million yuan, making Lenovo’s fruit segment “highly profitable”

The agreement also includes Xinrongmao’s listing target, buyback trigger, and exit execution mechanism.

Due to Lenovo Holdings’ clear expectations for investment returns, a listing performance commitment arrangement has been set with Xinrongmao’s management. If the listing fails, KuaWo has the right to choose to buy back all shares held by Xinrongmao’s management through Xinrongmao’s management buyback, achieving a full exit and realizing Lenovo’s investment gains in the fruit segment.

According to the announcement, the buyback price is approximately 12.32 yuan per share. If KuaWo chooses to “liquidate,” Xinrongmao’s management buyback will require 2.216 billion yuan to purchase all 180 million shares held by KuaWo, with an average cost of about 8 yuan per share.

This exit mechanism is a two-way arrangement. If KuaWo waives its right of first refusal, Xinrongmao’s management can also request KuaWo to buy back 160 million shares at the same price, totaling nearly 1.968 billion yuan.

The fruit industry still holds enormous growth potential. In May 2025, the Ministry of Agriculture and Rural Affairs’ Information Center and the Chinese Academy of Agricultural Sciences’ Agricultural Information Research Institute jointly stated that China is the world’s largest producer and consumer of fruit, with the fruit industry ranking third after grains and vegetables.

Since entering the fruit sector in 2012, Lenovo Holdings has been attracted by the industry’s huge growth potential. At that time, the domestic fruit industry was fragmented, with traditional production and circulation models, per capita fruit consumption lower than in developing countries and far below that of developed nations. The market size had room for upward growth. Against this backdrop, KuaWo merged with Xinrongmao, a leading industry player, in December 2015.

Over more than a decade in the fruit industry, the market has continued to expand, and Lenovo Holdings has gained substantial benefits. According to the announcement, Xinrongmao achieved unaudited after-tax profits of 266 million yuan and 309 million yuan in 2023-2024, and 245 million yuan from January to September 2025, accumulating nearly 820 million yuan in profits in less than three years.

Currently, the Hong Kong-listed fruit industry faces challenges: the once-prominent “Fruit First Stock” Hongji GuoPin has delisted, and high-end fruit retailer Baiguoyuan (02411.HK) is struggling with losses, store closures, and funding pressures. At this moment, Lenovo Holdings’ increased focus on the fruit sector and efforts to promote Xinrongmao’s listing may break the industry’s stagnation and achieve the expected results.