China’s Bestore Gyrates as Hillhouse Plans Snack Stock Transfer
Xu Yu
DATE:  Nov 21 2022
/ SOURCE:  Yicai
China’s Bestore Gyrates as Hillhouse Plans Snack Stock Transfer China’s Bestore Gyrates as Hillhouse Plans Snack Stock Transfer

(Yicai Global) Nov. 21 -- Shares of Bestore fluctuated after the Chinese snack retailer revealed another stock reduction involving the famous private equity firm Hillhouse.

Bestore [SHA: 603719] jumped as much as 10 percent and dropped as much as 10 percent intraday while the shares were 4.4 percent up at CNY36.95 (USD5.20) at 2.12 p.m. The stock price has surged almost 40 percent over the past month.

Hillhouse Tianda Equity Investment Management Center, HH LPPZ HK Holdings, and Hillhouse Zhiyuan Enterprise Management Partnership will transfer all their combined nearly 5.6 percent stake in the fruit and nut snack seller from Dec. 13, 2022, to May 21, 2023, due to their capital needs, the Wuhan-based snack seller said in a statement yesterday.

The announcement came only two days after the company said three other shareholders have finished reducing their holdings.

Hillhouse has sold Bestore shares three times, securing CNY914 million (USD127.7 million) in total. The PE firm, which invested early in tech companies such as Tencent and JD.Com, spent around CNY821 million to purchase a stake in Bestore, according to the latter's prospectus.

The Covid-19 pandemic has affected snack sales in China and Bestore's profitability has declined despite its revenue growth. As the Covid-19 pandemic hindered offline consumption, Bestore hiked its investments in online marketing while costs of raw materials and transport charges rose, an industry insider said.

In the first three quarters of this year, Bestore earned CNY7 billion (USD977.7 million) in revenue, up 7 percent from a year ago, while its net profit slipped by 10 percent to CNY287 million, based on the firm's earnings report. In 2021, net profit had slumped by 18 percent with a similar revenue bump.

However, Bestore has lately welcomed new investors. In the third quarter, Bosera Growth Advantage Hybrid Securities Investment Fund, Bosera Yulong Flexible Allocation Hybrid Securities Investment Fund, as well as the foreign financial giants of Merrill and J.P. Morgan Chase entered the list of Bestore's top 10 shareholders.

Editor: Emmi Laine, Xiao Yi



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Keywords:   Bestore Co.,Reduece shares,Hillhouse