Yum China working with Goldman, CICC on HK listing: sources

Hong Kong

YUM China Holdings is working with China International Capital Corp and Goldman Sachs Group on preparations for a second listing in Hong Kong, fuelling the wave of US-listed Chinese companies returning to a market that is closer to home.

The operator of Pizza Hut and KFC restaurants in China is working with the banks on the share sale, according to people familiar with the matter. The listing could take place as soon as this year.

A successful share sale by New York-listed Yum China would bolster Hong Kong's push to lure marquee Chinese firms to raise funds in a city that has been shaken by months of pro-democracy protests. It could also be a vote of confidence in the financial hub's future. Hong Kong Exchanges & Clearing has said it is seeing a spike in inquiries about second listings from Chinese companies after Alibaba Group Holding's US$13 billion share sale in November.

Yum China was spun off from Louisville, Kentucky-based Yum! Brands in 2016. The unit, which also operates Mongolian hotpot chain Little Sheep as well as Taco Bell in China, had more than 8,900 restaurants across China as of the end of September. It hired about 450,000 people in the country.

The company agreed in August to buy a controlling stake in Huang Ji Huang Group, a Chinese-style simmer pot restaurant operator. Yum China rejected a buyout offer from an investor group led by Hillhouse Capital Corp in 2018.

Shares of Yum China have risen 88 per cent since its 2016 debut, outperforming the 60 per cent gain in the Dow Jones Industrial Average.

IFR reported last week that Yum China is considering a listing in Hong Kong which could raise as much as US$2 billion, citing unidentified people. Details of Yum China's proposed offering could still change as deliberations are at an early stage, the people said. BLOOMBERG