Chinese fast-food restaurant operator Yum China Holdings is reportedly in talks with a number of financial institutions to help it prepare for its secondary listing in Hong Kong. The move has been seen as clear evidence that local companies that have only been listing abroad are now finally returning to domestic financial markets.
The New York-listed Company, which operates major fast-food franchises such as KFC and Pizza Hut in China, is reportedly holding meetings with banks such as Goldman Sachs and China International Capital Corp for its planned listing.
According to sources with knowledge of the matter, Yum China could be listing its shares in Hong Kong sometime this year. The same sources claim that Yum China could rise as much as $2 billion in its secondary listing in Hong Kong. Details of its planned listing are, however, still subject to change as the plan is still in the early stages of deliberations.
Yum China, a spinoff company of Kentucky-based firm Yum! Brands, is currently one of the largest fast-food operators in the country. As of September last year, the company had over 8,900 restaurants across the country; including popular franchises such as Taco Bell and hotpot chain Little Sheep. The company also employs more than 450,000 people in the country.
Since it was established in 2016, the company has managed to grow exponentially, with its shares surging by more than 88 percent. Last year, the company acquired a controlling stake in Huang Ji Huang Group, the operator of a popular Chinese-style simmer pot restaurant. In 2018, the company rejected a buyout offer from a group led by Hillhouse Capital.
If the company does manage to list in Hong Kong this year, it would likely provide a much-needed boost to the city's reputation as the leading global financial hub. It would aid Hong Kong in retaining its crown as the world's top IPO destination, inching it further forward against its close rivals, the NASDAQ and the New York Stock Exchange.
Hong Kong Exchanges and Clearing Ltd, the operator of the city's stock exchange, stated that it had been receiving an increasing number of inquiries from Chinese companies already listed abroad. The spike in inquiries apparently happened right after Chinese tech giant Alibaba Group Holding was able to successfully launch its massive $13 billion secondary listing in November last year.
Sources with knowledge of the company's operations revealed that HKEX is apparently in active talks with companies such as NetEase and Trip.com for possible listings.
