Yum China guides Hong Kong listing price at HK$412 each

[HONG KONG] Yum China Holdings has raised HK$17.3 billion (S$3.04 billion) in its Hong Kong listing, joining the growing ranks of US-listed Chinese firms selling shares in the financial hub.

The New York-listed company, which operates KFC and Pizza Hut in the world's most populous country, priced 41.91 million shares at the offering at HK$412 each, according to a statement on Friday. The offer price represents a 4.9 per cent discount to its closing price of US$55.92 on Thursday.

Yum China, the largest restaurant operator in the country, is joining a growing slate of US-listed Chinese companies aiming for a trading foothold in Hong Kong as relations between the US and China come under significant strain. US regulators are threatening to restrict Chinese firms' access to American capital markets if they do not allow authorities to review their audits.

The trend is a boon to Hong Kong, which is riding a wave of investor enthusiasm for initial public offerings (IPOs) in the city. In addition to second listings such as Yum China's, the city is set to get a big boost from the mega IPO of Jack Ma's Ant Group, which could raise about US$30 billion through a dual listing in Hong Kong and Shanghai, Bloomberg News has reported.

Other US-listed Chinese firms to have done second listings in Hong Kong include JD.com and NetEase which raised US$7.6 billion between them in June. A number of other firms are also planning share sales in the city, from data centre operator GDS Holdings to e-commerce service provider Baozun.

Yum China operates 10,000 restaurants in over 1,400 cities across China, according to its website. The company reported a sputtering recovery from the effects of the coronavirus pandemic, with sales improving in April and May but weakening again in June, according to its latest earnings. It said comparable sales in the second quarter fell 11 per cent from the previous year, and it expects them to remain under pressure in the third quarter.

Yum China will start trading in Hong Kong on Sept 10. Goldman Sachs Group is sole sponsor of the listing, while Citigroup, CMB International Capital and UBS Group are joint global coordinators.

BLOOMBERG