After going public, restaurant company LH Group plans to add more than a dozen outlets serving Asian cuisine.
LH Group, which runs Japanese brand Gyu-Kaku and Chinese brand The Banqueting House, was oversubscribed 531 times when it closed its tranche. Trading in its shares will start on Wednesday, reports The Standard.
Four cornerstone investors subscribed to shares worth HK$38 million. In particular, MTRC chairman Frederick Ma Si-hang will subscribe to $8 million worth of shares, while a subsidiary of SAS Dragon Holdings will buy shares worth $12 million.
Chairman/chief executive Wong Kit-lung says he and Frederick Ma became friends in 2011 (Ma had been interested in LH Group and says he has dined at the group’s restaurants).
Wong, meanwhile, says the company will enter into the mainland market, but has not revealed a specific timeline.
About 56 per cent of the net proceeds from the IPO will be used to open 19 restaurants under franchised brands by the end of 2020. The company will use 34 per cent of the proceeds to introduce eight restaurants under the self-owned brands.
Specialising in Chinese and Asian cuisine, particularly Japanese food, the full-service multi-brand restaurant company owns and runs 34 restaurants in Hong Kong. These include six Chinese restaurants and 28 Asian ones. Set up in the 1980s, the first restaurant, Lucky House, served Cantonese delicacies, while the top Chinese brand, The Banqueting House, opened in 2007.
LH Group also owns China Hall and LH Grand, which focus on Cantonese food and Chinese banquets. Pot Master and Peace Cuisine specialise in pot dishes, as well as Beijing, Shanghai and Sichuan cuisine respectively.
Opening Kabushikigaisha HK in 2008, the company established self-owned brands such as Japanese shabu-shabu outlet Mou Mou Club and hand-rolled sushi label Sushi Dai. It now has three franchised brands: Gyu-Kaku, a yakuniku (grilled meats) chain; Yoogane, South Korea’s largest chicken galbi restaurant chain; and Japanese shabu-shabu brand On-Yasai.
Meanwhile, LH Group has obtained the franchise rights of Gyu-Kaku Jinan-Bou, which has restaurants in Japan and Taiwan including at the landmark Taipei 101. The first restaurant under the brand will open in Hong Kong this year, and the group plans to introduce a hotpot brand, Hotpot PNP, for the mass market.
However, its prospectus shows net profit has continued to shrink in the past three years, from $46.68 million in 2015 to $40.55 million in 2016, and even down to $23.1 billion last year. LH Group attributes this mainly to rising rents.
China Everbright Capital is the sole sponsor of the IPO.
