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Yum China eyes US$2 billion Hong Kong listing

Yum China – the operator of KFC, Pizza Hut, Taco Bell and local restaurant chains – is reportedly preparing to list on the Hong Kong stock exchange as early as next month. 

The IPO, should it proceed, is likely to raise as much as US$2 billion, according to Bloomberg, which cited inside sources who asked not to be identified

Approval for the listing will be sought from the territory’s stock exchange as early as this month. 

Yum China, controlled by its US namesake Yum! Brands, has been working with Goldman Sachs, China International Capital, Citigroup, UBS and CMB International to prepare for the listing. 

Last month, Yum China marked its 10,000-store milestone, opening a KFC in Bo’ao, Hainan province, and CEO Joey Wat said then that the Covid-19 pandemic will not impact this year’s store rollout plan.

“With our innovation capabilities, strong digital strategy, and resilient business model, I believe we will emerge from this pandemic stronger than ever, and ready to capture the exciting long-term market opportunity in China,” she said.

Yum China’s total sales fell 11 per cent year on year to US$1.9 billion in the first quarter of this year, while net income fell 26 per cent to $132 million. 

Michael Pearson, head of corporate equities at Oak Stone Limited, said the specifics of the deal such as timing and size have not yet been finalised and are likely to change in the coming weeks.

“New York-listed Yum China is another company who join the growing wave of US-listed Chinese firms seeking a trading foothold in Hong Kong due to the deteriorating relations between the US and China,” added James Burnley, head of wealth management at Oak Stone.

“Regulators in the US are threatening to restrict the access of Chinese companies to the American capital markets if they refuse to let authorities review their audits,” he said.

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