Yum China eyes Hong Kong listing as early as Sept

[HONG KONG] Yum China Holdings is targeting a second listing in Hong Kong as early as September, people familiar with the matter said, adding to the list of billion-dollar share sales in the Asian financial hub this year.

China's largest restaurant company, which runs outlets in the country of US brands including KFC, Pizza Hut and Taco Bell, plans to seek the city's stock exchange approval as soon this month, the people said, asking not to be identified because the information is private.

The New York-listed fast food giant has been working with Goldman Sachs Group and China International Capital on the listing, Bloomberg News has reported. Citigroup, CMB International Capital and UBS Group are also arranging the deal, the people said. The company has filed confidentially for the Hong Kong share sale, which could raise about US$2 billion, the people have said.

Details of the offering such as the timing and size are not final and could change, the people said. Representatives for CICC, Citi, Goldman Sachs, UBS and Yum China declined to comment, while a representative for CMB International didn't immediately respond to requests for comment.

Yum China is part of a growing wave of US-listed Chinese firms looking for a trading foothold in Hong Kong as relations between the US and China deteriorate markedly. US regulators are threatening to restrict Chinese firms' access to American capital markets if they do not allow authorities to review their audits.

China's No.2 online retailer JD.com raised US$4.5 billion in its Hong Kong listing in June, in the world's second-largest initial share sale this year, according to data compiled by Bloomberg. Gaming company NetEase raised US$3.1 billion from its offering in the financial hub in the same month. Alibaba Group Holding pioneered the so-called "homecoming" listing model for US-listed Chinese firms last year with a massive US$13 billion share sale.

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Nongfu Spring, Chinese bottled water giant, plans to seek Hong Kong stock exchange approval as soon as next week for its proposed IPO, which could raise about US$1 billion, Bloomberg News reported on Friday. The company aims for a listing as early as September 2020 should it get the nod from the exchange, the people have said.

Yum China reported a sputtering recovery from the effects of the coronavirus pandemic, with sales improving in April and May but weakening again in June. The company 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 operates 10,000 restaurants in over 1,400 cities across China, according to its website. Its New York shares have risen 13 per cent this year.

BLOOMBERG