China's leading catering chain Inner Mongolia Little Sheep Catering Co Ltd, famous for its hot pot dishes, plans to raise HK$1 billion (US$128 million) through an initial public offering (IPO) in Hong Kong in 2008, a company executive said.
Vicky Yeung, Little Sheep's Hong Kong regional manager, told China Daily in an exclusive interview that proceeds gained from the IPO will be used to fuel its expansion.
Running four restaurants in Hong Kong, the company aims at a 10 percent growth in turnover this year to HK$110 million (US$14 million).
Last year, the hot pot chain's sales in Hong Kong amounted to HK$100 million (US$12.8 million), while its mainland sales hit 3.5 billion yuan (US$440 million).
Founded in Baotou, a city of north China's Inner Mongolia Autonomous Region in 1999, the company now has 716 restaurants in the mainland.
To realize that growth rate, Little Sheep will open more stores in Hong Kong. First entering the city in June 2004, the company has initially established its brand name and local customer base in the city.
That experience eased Little Sheep's early worries on overseas expansion and prompted it to consider more set-ups in the city.
"We are now studying where to launch our fifth store in Hong Kong, with Central, Kwun Tong and Tuen Mun topping our preference," Yeung said. The three sites are Hong Kong's busiest commercial or residential areas. The company already has stores in Causeway Bay, Mongkok, Tsim Sha Tsui and Tusen Wan.
Each Hong Kong store receives an average of 1,000 customers every weekday, and the number typically doubles over weekends or public holidays. According to the company's statistics, the average customer spends about HK$150 (US$20).
Little Sheep will make first forays into Macao and Taiwan in May, Yueng said. In the next two years, Little Sheep will likely show up in Japan and Singapore, where local catering habits are similar with Chinese.
Hong Kong analysts said the company was one of the latest of mainland catering firms to spearhead into overseas marketplaces after they secured a stronghold in their home market.
"We saw more and more mainland restaurants set up in Hong Kong in the past three to five years," said a local analyst, who asked not to be identified but claimed he is a frequent visitor to Little Sheep.
He believed the experience the chain gained in Hong Kong will be of useful in its march into neighboring countries.
"Hong Kong's catering sector is open, diversified and competitive," he said. "If they can survive in the city, they can do well elsewhere," the analyst said.
(China Daily February 21, 2006)
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