Local coffee machine manufacturer Gemi Lai applies for HKEX IPO: second in market share in China, with 83.3% of revenue coming from proprietary brands

Recently, domestic coffee machine manufacturer Gemilai Holdings Limited (referred to as “Gemilai”) officially submitted an application for listing on the Main Board of the Hong Kong Stock Exchange, with CITIC Securities serving as the exclusive sponsor.

According to information on the official website and the prospectus, this coffee machine company, founded in Shunde, Guangdong, dates back to 2011. The company has gone through three stages: OEM manufacturing, trading, and branding, and has now established a comprehensive business model covering product design, manufacturing, sales, and after-sales services.

The prospectus cites data from Frost & Sullivan, indicating that in terms of revenue, the company is the second-largest brand in China’s coffee machine industry and the leading domestic coffee machine brand, with an estimated market share of about 7.5% in 2024; it also ranks first in the semi-automatic espresso machine segment with a market share of 16.0%; and holds a 27.9% market share in the segmented field of standalone semi-automatic espresso machines.

In terms of performance, Gemilai has seen continuous significant revenue growth in recent years. The prospectus shows that from 2023 to 2024, revenue increased from 307.7 million yuan to 497.6 million yuan, a year-over-year growth of approximately 61.7%. Revenue for the first three quarters of 2025 reached 449.3 million yuan, up 44.1% year-over-year. Net profit rose from 22 million yuan in 2023 to 40 million yuan in 2024; additionally, net profit for the first three quarters of 2025 was 54 million yuan, a substantial increase of 365.2% year-over-year, surpassing the full-year level of 2024.

According to Gemilai’s prospectus, its business model includes sales of proprietary brands and ODM cooperation with third-party brands. The proprietary brand “Gemilai” is its core revenue source; third-party brand collaborations are conducted through ODM arrangements, providing product design and manufacturing services for domestic and international brand clients.

Data shows that revenue from its proprietary brand increased from 213 million yuan in 2023 to 410 million yuan in 2024, accounting for 69.2% and 82.4% of total revenue respectively, further rising to 83.3% in the first three quarters of 2025.

Regarding product categories, “Gemilai” covers household, commercial, and dual-use espresso machines and grinders. As of September 30, 2025, the average selling price for household espresso machines was 1,680 yuan, for dual-use espresso machines 3,588 yuan, for commercial espresso machines 7,426 yuan, and for grinders 773 yuan. By the end of September 2025, a total of 671,000 units had been sold.

Gemilai cites Frost & Sullivan data indicating that China’s coffee machine market is in a period of rapid growth. From 2019 to 2024, the market size increased from 2 billion yuan to 5.3 billion yuan, with a compound annual growth rate (CAGR) of 21.5%. It is expected to reach 12.5 billion yuan by 2029, with a CAGR of 18.7% from 2024 to 2029. Meanwhile, compared to overseas markets, China’s per capita annual coffee consumption is only 14.3 cups, far below other major markets such as Europe (567.9 cups), South Korea (415.6 cups), Japan (280.8 cups), North America (242.5 cups), and Southeast Asia (137.5 cups).

However, the prospectus also notes that Gemilai mainly manufactures and sells a series of coffee machines serving both household and commercial users, with its proprietary Gemilai semi-automatic espresso machine being its primary growth driver. As market competition intensifies, it cannot guarantee that its products will continue to maintain attractiveness or retain market share. Consumers may choose competitors’ coffee machines, shift preferences to different brewing technologies, or even opt for other hot beverages instead of coffee. Such changes in consumer preferences could exert downward pressure on pricing and sales, or lead to increased marketing and distribution expenses. Furthermore, if the company fails to attract a diversified customer base across all markets where its coffee machines are sold, its operational and financial performance could be adversely affected.

Additionally, the prospectus mentions that, according to Frost & Sullivan, the combined market share of the top five brands in China’s coffee machine industry in 2024 was 44.1%. Industry competition is characterized by fierce price competition, frequent new product launches, short product life cycles, rapid product upgrades, and diversified consumer preferences. The company competes with other industry players in innovation, product development, and pricing. Failure to establish competitive advantages in these areas could negatively impact its operational and financial performance.

Looking at the market share in 2024, Gemilai holds 7.5%, ranking second, but there is a significant gap compared to the leading international brands, which hold 20.4%. The third-largest brand already accounts for 7.2% of the market share.

According to the prospectus, the funds raised will mainly be used over the next five years for expanding production facilities, digital upgrades, brand marketing and service system development, R&D enhancement, comprehensive information infrastructure construction, and to supplement working capital and for general corporate purposes.