Jiumaojiu International Announces Major Equity Acquisition in North American Hot Pot Chain “Big Way Hot Pot”

Key Highlights

• Major Investment Announced: Jiumaojiu International Holdings Limited (“Jiumaojiu” or “the Company”, HKEX: 9922) has entered into agreements to acquire a significant equity interest in Big Way Group Inc., a North American restaurant chain operating under the “Big Way Hot Pot” brand.
• Transaction Structure: The acquisition comprises a subscription for 48,204,438 new Class A Preferred Shares for USD 28 million and the purchase of 25,823,805 preferred shares from existing shareholders for USD 15 million, totaling USD 43 million.
• Aggregate Equity Stake: Following completion, Jiumaojiu will hold approximately 49.0% of the Class A shares in the Target Company, translating to about 49.0% of the participating rights and 10.8% of the voting rights in Big Way Group Inc.
• Listing Rules Implications: The deal, when aggregated with a prior investment (USD 4 million for a 10% stake in July 2025), constitutes a discloseable transaction under HKEX Listing Rules, requiring notification and announcement but not shareholder approval.
• Non-Consolidation: Big Way Group Inc. will not become a subsidiary of Jiumaojiu; its financial results will not be consolidated into the Group’s financial statements.
• Strategic Board Representation and Rights: Jiumaojiu secures a board seat and significant rights in major decisions, pre-emptive rights, transfer restrictions, and tag-along/drag-along provisions.
• Target Company Profile: Big Way Hot Pot operates 21 restaurants across Greater Vancouver, Toronto, and California, offering a customizable hot pot dining experience.

Transaction Details

On February 26, 2026 (Vancouver time), Jiumaojiu entered into a Share Subscription Agreement and individual Purchase and Sale Agreements with several selling shareholders of Big Way Group Inc. The agreements detail the following:

• Share Subscription: 48,204,438 Class A Preferred Shares were subscribed for at a total price of USD 28 million.
• Share Purchase: 25,823,805 preferred shares were purchased from specific existing shareholders for USD 15 million. These will be exchanged one-for-one for Class A Preferred Shares.
• Total Consideration: The aggregate transaction value is USD 43 million, determined through arm’s length negotiations and considering an independent valuation.
• Financing: The transaction was financed via internal resources and bank loans.
• Shareholder Breakdown: Post-transaction, Jiumaojiu will hold 74,028,243 Class A Preferred Shares of the Target Company.
• Voting and Participating Rights: Class A shares carry one vote and participating rights; Class B shares have weighted voting rights but no participating rights. Xinzhong Yao, through personal and trust holdings, retains control of 86.7% of voting rights and 39.4% of participating rights. Jiumaojiu will control 10.8% of voting rights but 49.0% of participating rights.

Shareholders’ Agreement—Significant Terms

• Board Representation: Jiumaojiu secures one of the three board seats as long as it owns more than 10% of shares.
• Veto Rights: Prior approval is required from Jiumaojiu for certain major corporate actions, especially changes to the core business.
• Pre-Emptive Rights: All existing shareholders, including Jiumaojiu, have the right to participate in future financings proportionate to their shareholdings. Jiumaojiu has the right to subscribe for all new shares issued below a set price.
• Transfer Restrictions: Share transfers require board consent or must comply with the Shareholders’ Agreement.
• Right of First Offer/Refusal: Shareholders wishing to sell must first offer their shares to other shareholders, with Jiumaojiu having priority if a change of control is triggered.
• Tag-Along/Drag-Along Rights: Protects minority shareholders in case of a third-party offer for all shares.
• Agency Appointment: Xinzhong Yao or another board designee acts as agent for executing transfers and consents on behalf of the existing shareholders.

Information on Parties Involved

• Jiumaojiu International Holdings Limited: A leading Chinese cuisine restaurant operator and brand manager in China, with a focus on modern, high-quality restaurant experiences in shopping malls.
• Big Way Group Inc.: North American restaurant chain with 21 outlets under the “Big Way Hot Pot” brand, specializing in customizable hot pot dining.
• Selling Shareholders: Include 1488306 B.C. Ltd. (jointly held by Xinzhong Yao and his spouse), YC Trust (trustees: Patrick Yip and Li Cheng), LL Trust (trustee: Weibiao Lin), and several individuals. All are independent of Jiumaojiu.

Potential Price-Sensitive and Shareholder-Relevant Information

• Significant Overseas Expansion: This acquisition marks a notable step in Jiumaojiu’s international expansion, giving it a substantial economic interest in a North American restaurant chain.
• Strategic Rights and Minority Protections: Jiumaojiu secures not only economic interests but also strategic veto and board rights, potentially influencing the direction and risk profile of its overseas investments.
• Non-Consolidation Implications: Financial results of Big Way Group Inc. will not be consolidated, which may impact how investors assess the growth profile and risk exposure of Jiumaojiu.
• Potential Future Dilution and Right to Acquire at Discount: The Shareholders’ Agreement gives Jiumaojiu the right to subscribe for new shares at a potentially preferential price, which could be material in future capital raises.
• Disclosure Under Listing Rules: The transaction is a discloseable transaction under HKEX rules, which means investors should pay attention to subsequent announcements and disclosures for further developments.

Conclusion

The acquisition of a near-majority economic stake in Big Way Group Inc. represents a strategic move for Jiumaojiu International as it expands into the North American market. The combination of economic participation, board representation, and significant minority protections could provide both growth opportunities and risk mitigation for the company’s shareholders. However, as the investment will not be consolidated into the Group’s financials, investors should carefully consider the impact on the Group’s reported results and growth trajectory. The transaction’s structure and the strategic rights obtained are likely to be of interest to the market and could have a material impact on share price depending on further execution and future performance of the North American business.

Disclaimer: This article is based on company disclosures and is intended for informational purposes only. It does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisors before making any investment decisions. The author and publisher accept no liability for actions taken based on this information.

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