By Claire Lim
Chinese fast food restaurant operator Country Style Cooking Restaurant Chain Holding Ltd. has updated its plans for a Hong Kong share offering and is attempting to return to public markets six years after its delisting from the New York Stock Exchange.
The Chongqing-based company filed a draft prospectus with the Hong Kong Stock Exchange on Friday after its original filing in January lapsed. Country Style said it plans to use the proceeds from the offering to expand its restaurant network and geographic area in China, expand its food delivery business, and make investments to digitize restaurant workflows, among other things.
Country Style, which counts venture capital firm Sequoia Capital China among its major shareholders, has not provided a timeline for the offering or the amount it intends to raise. It said parties holding a combined 53% stake will remain its controlling shareholders.
The company went public in New York in 2010, was then privatized in a management buyout and delisted in 2016 due to relatively low trading volume.
It found that it posted a loss in 2011 and a decline in profit from 2012 to 2015, due in part to a low total number of restaurants and the difficulty in building brand awareness. It also said it entered new markets without sufficient market research and failed to adapt to consumer tastes in different markets.
Country Style began operations in 1996 and specializes in fast, affordable traditional Chinese food. Citing research by consulting firm Frost & Sullivan, it ranks among the top five self-operated fast food restaurant groups in China in terms of revenue generated in 2021. As of May 2022, it operated more than 1,140 restaurants.
Country Style’s sales rose to 4.62 billion yuan (US$685 million) in 2021 from 3.16 billion CNY a year earlier.
Goldman Sachs and CMB International Capital Ltd. act as joint sponsors for the planned offer.
Write to Claire Lim at [email protected]
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