The industry Wang Sicong invested in made over 300 million in one day
Last Friday, Wang Sicong, son of the Wanda Group chairman, entered the Hong Kong stock market because of "food," and made headlines under the title "Made 300 million Hong Kong dollars in one day."
1 "Eating" into the Hong Kong stock market with substantial returns
That day, Catering Concepts Holding Limited, in which Wang Sicong held a 10.11% stake, was listed on the Growth Enterprise Market of the Hong Kong Stock Exchange, with an offer price of 0.45 yuan (Hong Kong dollars, same below) per share. The share price surged as high as 8.02 yuan that day, a gain of 1682.22%, and closed at 4.28 yuan per share, giving the Wanda scion a paper profit of more than 300 million yuan.
After just one weekend, on Monday of this week, Catering Concepts closed down 76.40%, with the share price settling at 1.01 yuan, and Wang Sicong lost 264 million yuan on paper.
Even so, Catering Concepts still achieved a gain of 1.24 times over its two days of listing, and the Wanda scion still made 45.29 million yuan.
It is reported that in December 2014, Catering Concepts issued a batch of convertible bonds to Prometheus Capital, a private equity firm 100% controlled by Wang Sicong, with a transaction amount of 4 million US dollars, holding a 10.11% stake in Catering Concepts, and after listing holding 80.88 million shares.
According to public documents released by Catering Concepts, the company was incorporated in the Cayman Islands and mainly operates high-end restaurant chains. As of the first quarter of this year, it had a total of 22 restaurants, all located in prime consumer districts in Hong Kong, such as Lan Kwai Fong, Causeway Bay, Times Square and Harbour City.
2 Loves street food, wants to build a food empire?
In addition to making headlines for making money by investing in food, because of the huge contrast between his "rich second generation" halo and street snacks, Wang Sicong eating street food with his girlfriend always attracts onlookers.
Eating "Mom's Pig Trotter Flower" with friends by a bridge in Chengdu, or grabbing skewers or malatang on the streets of Beijing, Wang Sicong seems to have a particular fondness for street stalls.
Do not think for a moment that the Wanda scion merely loves to eat. Judging from the investment projects of Prometheus Capital, which he wholly controls, Wang Sicong also has a particular fondness for investing in "food."
In 2012, Prometheus Capital took a stake in Hanlashan Catering Management Co., Ltd. (hereinafter referred to as "Hanlashan"), and Hanlashan immediately showed a rapid expansion trend.
Founded in 2001, Hanlashan took 11 years to open about 100 branches, but after Prometheus Capital's investment, it took only 4 years to increase the total number of branches to more than 300, an astonishing growth rate.
In addition, Wang Sicong is also an investor in the pan-catering platform Dianping. Although Meituan and Dianping have merged into "Xinmeida," public information does not yet reveal whether the funds Prometheus Capital invested in Dianping are still waiting for "Xinmeida" to list and cash out, or whether it has already exited during the merger with a profit.
Industry insiders analyzed that because of Wang Sicong's identity and background, the market gains confidence in companies he favors, and for catering companies he invests in, the market will speculate that there will be some form of cooperation with the Wanda Group in the future.
3 Making big money by investing in catering?
In November 2009, Xiang E Qing listed on the A-share market. At that time, there were four companies in the catering industry on the A-share market: Quanjude, Xi'an Catering, Xiang E Qing and Mianshi Shares.
To date, there are still only four companies in the A-share catering industry: Quanjude, *ST Yumewang, Quanxinhao and Xi'an Catering.
Nearly 7 years later, the number of catering industry enterprises in the A-share market has not changed.
Looking back to 2007, that was the starting point for venture capital's special favor toward the catering industry. The "frenzy" at the time should have been due to consideration of the strong momentum of sustained profitability in the catering industry brought about by structural changes in eating habits caused by rising national income.
But apart from Country Style Cooking's entry into the New York Stock Exchange and Little Sheep's entry into the Hong Kong Stock Exchange, the investors who rushed into the catering industry in droves back then all had to face the problem of exiting after 5 years, while the road to listing looked impossibly far away.
It must be admitted that the characteristics of the catering industry are indeed somewhat out of step with the capital market.
Yao Xuezheng, honorary vice president of the Guangdong Catering Service Industry Association, once pointed out that catering enterprises themselves have opaque finances, unstable profits and non-standard management, and he considered these three points to be the three most important reasons why catering enterprises cannot pass the CSRC's listing approval.
"This is a common problem among catering enterprises. Raw material procurement price management is unclear, personnel contracts are incomplete and staff turnover is high, invoicing omissions cannot be effectively supervised, and many stores even lack complete licenses. This makes the capital market feel that catering enterprises are difficult to value accurately, and the CSRC would also believe that letting such enterprises list would pose excessive risks to stock investors."
In order to increase the return rate of diners and hotel guests, Qingdao Hanbilou not only hired gold chefs of the eight great cuisines to be stationed in the restaurant, but also put great effort into ingredients, with a "cross-strait ingredient research team" specifically responsible for collecting the finest and freshest ingredients from all over the world. The picture shows Qingdao Hanbilou. Photo by China News Service, provided by Qingdao Hanbilou
At the same time, he also mentioned that since the central government cracked down on "three public consumption," the entire domestic high-end catering industry has entered a prolonged "winter," accompanied by the reality of rising labor costs, rents and raw materials across the board. The profits of catering enterprises have continued to decline, with growth slowing to rock bottom. In order to survive, competition in the entire catering industry has been brutal. All of this has become an objective reason for the predicament of catering enterprises seeking to list.
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