Yum China Targets September for Hong Kong Listing

(Bloomberg) — Yum China Holdings Inc. is targeting a secondary 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 U.S. 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 Inc. and China International Capital Corp. (CICC) on the listing, Bloomberg News reported. Citigroup Inc., CMB International Capital Corp. and UBS Group AG are also arranging the deal, the people said. The company has filed confidentially for the Hong Kong share sale, which could raise about $2 billion, the people said.

Details of the offering such as the timing and size are not final and could change, the people said. Representatives of 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 U.S.-listed Chinese companies looking for a trading foothold in Hong Kong as relations between the U.S. and China deteriorate. U.S. regulators are threatening to restrict Chinese businesses’ access to American capital markets if they do not allow authorities to review their audits.

China’s No. 2 online retailer JD.com Inc. raised $4.5 billion in Hong Kong in June in the world’s second-largest initial share sale this year, according to data compiled by Bloomberg. Gaming company NetEase Inc. raised $3.1 billion in the same month in Hong Kong. Alibaba Group Holding Ltd. pioneered the so-called “homecoming” listing model for U.S.-listed Chinese enterprises last year with a massive $13 billion share sale.

Chinese bottled water giant Nongfu Spring Co. plans to seek Hong Kong stock exchange approval as soon as next week for its proposed IPO, which could raise about $1 billion. The company aims for a listing as early as September should it get the nod from the exchange, people with knowledge of the deal 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% from the previous year, and it expects them to remain under pressure in the third quarter.

Yum China operates 10,000 restaurants in more than 1,400 cities across China, according to its website. Its New York shares have gained 13% this year.

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