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Xiangeqing founder to make hay from IPO

By Yu Tianyu (China Daily)
Updated: 2009-11-04 08:28

Entrepreneur Meng Kai is expected to join the Chinese rich club after the initial public offering of Beijing Xiangeqing Co Ltd yesterday. The catering chain company's shares have been priced at 18.9 yuan ($2.77) per share and would be listed on the Shenzhen Stock Exchange.

Xiangeqing got approval from the China Securities Regulatory Commission to issue 50 million A shares and raise about 460 million yuan from the public float.

The company said it would use the IPO proceeds to set up new restaurants, green food distribution bases and food processing plants.

Analysts at Ping An Securities have estimated that Meng, who owns about 67 percent of the company's shares, would see his net worth climb to nearly 900 million yuan after the IPO.

Pan Wei, president of Ajisen China Holdings, a Japanese noodle restaurant brand, with a net worth of around 3 billion yuan, currently tops the latest Hurun 2009 Restaurant Rich List. Zhang Lan, who owns South Beauty Group, is ranked second with a net worth of 2.5 billion yuan.

Xiangeqing, which focuses on serving high-end business meals and banquets, is China's fourth listed catering enterprise after Quanjude, Little Sheep and Fu Ji Catering, and also the first private catering enterprise to get listed.

Small beginning

Meng, founder and chairman of Xiangeqing, started his catering business in 1994 with a 40-sq-m Hunan cuisine restaurant in Shekou, Guangdong province, after he quit his previous job as a worker in a machine tool plant in Hubei province.

"My first restaurant only had four tables, and I was the owner, waiter and cashier," he said. "Three years later, I opened my first 1,000-sq-m Xiangeqing restaurant in the same place."

Related readings:  Retail sales of hotel, catering industry up 26% in Oct  China's accommodation, catering retail sales rise 24.8%  China's Nasdaq-style GEM to start trading Oct 30  Regulator plans steps to plug IPO loopholes

Xiangeqing is a combination of alternative names of Meng's birthplace Hubei province and his wife's Hunan province, while Qing means "love" in Chinese.

In 1999, Meng opened his first Xiangeqing restaurant in Beijing, one of the most competitive catering markets in China with numerous renowned restaurant brands.

So far, the company owns 14 regular chain restaurants and nine franchise outlets in Beijing, Shanghai, Changsha, Shenzhen, Chengdu and other big cities. Xiangeqing reported a sales revenue of 612 million yuan in 2008.

At present, the company has 10 regular chain restaurants in Beijing. Company officials said they intend to further expand their presence in the capital city soon.

According to figures released by the Beijing Municipal Bureau of Statistics, during the first half of 2009, sales of Beijing's catering enterprises totaled 22.7 billion yuan, an increase of 13.6 percent year on year.

Xiangeqing intends to open four chain restaurants in Xi'an, Wuhan, Zhengzhou and Hohhot. It also plans to have 36 chain restaurants across the country by 2011 with over 1.6 billion yuan in sales revenue, according to company executives.