(Yicai Global) Feb. 26 -- Pagoda Industrial Group, which may become the first Chinese fruit chain to get listed, is looking to go public in Shenzhen instead of Hong Kong.

Pagoda is in the first phase of initial public offering counseling with Minsheng Securities to float its shares on Shenzhen's growth-enterprise board ChiNext, China Fund reported today, without disclosing why the retailer scrapped its Hong Kong listing plans.

The Shenzhen-based company had revealed its Hong Kong intentions last September in its filing with the China Securities Regulatory Commission.

Founded in 2001, Pagoda has CNY1.5 billion (USD232 million) in registered capital. It has gone through eight rounds of funding, and some of its 39 shareholders include Tiantu Capital, China Capital Investment Group and Shenzhen Capital Group. Chairman and founder Yu Huiyong holds a 25.6 percent stake in it.

Experts have doubted the retailer's upside. Pagoda’s core products are fruit and profits are small compared to fresh food e-commerce firms, Chinastarmarket reported, citing industry insiders. The company will become more attractive to investors if it manages to get listed first but an expansion would come with challenges in supply chain, product quality, and store management, said an expert.

By December, Pagoda operated more than 4,600 stores and had over 70 million VIP members, providing services to more than 200 million clients.

Editor: Emmi Laine, Xiao Yi