300 million yuan from Beijing for South Beauty
In spite of the current economy recession, a home-grown restaurant chain South Beauty Group has got a 300 million yuan investment.
200 million yuan of the capital are from CDH Investments, a Beijing-based private capital firm and the rest belong to China International Capital Corporation (CICC), an investment bank in which Morgan Stanley holds a 34% stake. The two investors combined will hold less than 10% of the restaurant chain.
According to Rong Xuejing, the company’s spokeswoman, the valuation of the deal relates to an initial public offering, which prices the company more than 10 times its 2007 earnings.
Rong said the company’s plan is to add about 20 outlets in 2009, including one in London. And the funds will be used to support its expansion and attract more talents.
Targeting high-income business consumers, South Beauty, which was established in 2000, features Sichuan-styled dishes. Based on earlier reports, the company, with over 1 billion sales yuan last year, owns 40 outlets in Beijing, Shanghai and Tianjin.
South Beauty’s founder and board chairman Zhang Lan is ranked 311th in Forbes Magazine’s China Richest List 2007, with total assets of 1.79 billion yuan.
Investors have paid more and more attention to the nation’s catering sector over the past few years. Ajisen China, a fast-food noodle restaurant chain, held a $210 million share sale in Hong Kong last March. Little Sheep Group, a homegrown hotpot restaurant chain, also raised $105.7 million in a Hong Kong flotation this June, bringing substantial returns to its investors including Europe’s largest private equity firm 3i Group.
Based on the data of the Ministry of Commerce, sales revenue of the accommodation and catering sector was totally 1.11 trillion in the first three quarters, which is an increase of 24.8% year-on-year. The number is expected to exceed 1.54 trillion yuan in 2008.
However, due to the economic slowdown, the nation’s venture capital market has been cooled. The slumping global stock markets have made it difficult for investors to cash out from their portfolio companies.
During the third quarter, there were totally 109 enterprises receiving venture funding of $788 million in China, down 34.6% year-on-year.
The amount of money raised by Chinese companies in the first 11 month of the year through IPOs fell to $21.8 billion, down 70% comparing with the same time of last year.
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