(Yicai Global) March 1 -- Shares of Bestore tumbled after the Chinese snack retailer said that renowned venture capital firm Hillhouse Capital Group intends to sell more than half of its stake over the next few months, which could make the latter as much as CNY1.1 billion (USD170.2 million) in gains.

Bestore's stock price [SHA:603719] slumped by 9.6 percent to CNY58.83 (USD9.10) this afternoon. It was listed on the Shanghai Stock Exchange at an initial public offering price of CNY11.9 per share on Feb. 24, 2020. The stock reached a historical high of CNY87.24 in July 2020.

Three institutions under Hillhouse Capital plan to reduce their holdings of Bestore by up to 24.1 million shares, or 6 percent of the latter’s total share capital, from March 4 to Aug. 26, the Wuhan-based firm said in a statement yesterday.

Hillhouse Capital became an important shareholder of Bestore in September 2017, investing more than CNY800 million (USD123.8 million). Based on the closing price on Feb. 26, the VC firm would make over CNY2.2 billion in return on investment by selling the whole stake.

Some 45.6 percent of Bestore's shares are held by five institutions, including the three under Hillhouse Capital, and the one-year lock-up period after the IPO is over on Feb. 24, the firm said on Feb. 19.

Established in 2006, Bestore ran 2,700 physical stores by December 2020 but the retailer has also partnered with microblogging platform Weibo and short-video application Kuaishou to carry out live-streaming promotion and online sales.

Bestore's business performance slowed significantly last year due to the Covid-19 pandemic. Its net profit slid by 16.2 percent to CNY264 million in the first three quarters of 2020 from a year earlier while its revenue rose by 1.3 percent to CNY5.5 billion, according to its earnings report.

Editor: Emmi Laine, Xiao Yi