Yum China in Talks for $2 Billion Hong Kong Offering

The fast food chain operator is working with CICC and Goldman Sachs on a secondary listing Hong Kong.
Capitalwatch StaffJan 14,2020,17:00

Yum China Holdings Inc. (NYSE: YUMC) may become the next Chinese company to enjoy the perks of Hong Kong’s relaxed listing rules. 

The fast food chain operator saw its shares rise 1% in early trading Tuesday, to $48.62 per American depositary share, on news that it is in talks with banks for a secondary listing. 

Bloomberg reported that Yum China has kicked off the run-up to an offering in Hong Kong and is working with China Int’l Capital Corp. and Goldman Sachs on the deal.

The Stock Exchange of Hong Kong has been taking steps to open up its market policies to attract Chinese tech giants. Thus, in November, Alibaba Group Holding Ltd. (NYSE: BABA; HKEX: 9988) celebrated its “homecoming” in a $12.9 billion float as a dually-listed company with dual-class shares.

Yum China operates Pizza Hut, Taco Bell, KFC and Mongolia’s Little Sheep restaurants in China and has also acquired a controlling stake in Huang Ji Huang, a casual simmer pot dining franchise, as announced in August. In its latest quarterly financials, the giant posted revenue of $2.3 billion and income of $223 million.

Yum China’s offering in Hong Kong could raise it up to $2 billion, Bloomberg reported, citing IFR.

The company became the fourth China titan to consider following in Alibaba’s footsteps. Earlier this month, reports surfaced that Chinese search engine Baidu Inc. (Nasdaq: BIDU), Asia's largest booking platform Trip.com Group Ltd. (Nasdaq: TCOM) and tech giant NetEase Inc. (Nasdaq: NTES) are considering a secondary listing in Hong Kong.

On Monday, Hong Kong’s benchmark stock index Hang Seng published an address to the public to consult on whether it should include companies with weighted voting rights (WVRs) and secondary listings. The consultation will conclude in March; results are expected in May.